Last Updated : Jul 09, 2020 11:22 AM IST | Source: Moneycontrol.com
“Buy when there’s virus in the streets”
Inspiring conversations with market participants to drive away the pandemic blues
Is the COVID-19 pandemic making you downcast, dejected, despondent? Is the lockdown making you feel dispirited? Are you sick and tired of being cooped up at home? Do you miss meeting your friends? Are you worried about your job? Do not worry, help is at hand. No, there’s no need to drown your sorrows in booze----all you have to do to lift your spirits is look at the stock market.
Trust me, I’ve been doing it regularly these days. Whenever I wake up feeling blue, I call my pals in the stock market. To pep you up, here are some of the uplifting conversations I’ve had with them.
The first one was when the epidemic had just started and the markets were crashing. Here’s a rough transcript:
Me: Boss, the world is crashing, markets are plummeting, folks are dying on the streets in Italy.
Market Maven: It’s a great opportunity. Buy when there’s virus in the streets. Have you heard of the Black Death?
Me: The bubonic plague that swept over Europe in the Middle Ages?
MM: Precisely. It killed millions, wages shot up as a result, the feudal economy collapsed, but capitalism rose like a phoenix from its ashes in the centuries that followed, heralding Europe’s golden age. Look on the bright side. Buy pharma stocks.
I felt much better after seeing that Big Picture and realising that I was living in historic times.
But a few weeks later, when the migrant workers were trudging back home, I felt depressed again and called an investment guru.
Me: Boss, have you seen the plight of those poor migrant workers?
Investment Guru: Good they’re going back to their villages, no?
Me: Won’t the infection spread?
IG: On the contrary, they will go and start sowing crops. Agricultural production will rise, their incomes will go up, they will start buying soaps and shampoo, milk and meat and fish and biryani, biscuits and cake and Coke and Pepsi and chocolates and antacids.
Me: Antacids?
IG: To digest all that. Rural demand will rise, we will sell them tractors and motorbikes, factories will start humming and soon we’ll be on our way to a $5 trillion economy. Buy agri shares.
I undid the top two buttons on my shirt, as my chest had started expanding with pride.
But some days later, when the death rate started spiking up in India and economists warned that the economy was shrinking, I became morose again and called a fund manager.
Me: Boss, these economists are saying the Indian economy will shrink 5 percent this year.
Fund manager: Never listen to economists. If we had listened to economists when our ancestors were apes, we would still be swinging from tree to tree in some forest. If one ape wanted to walk on two feet, the ape economist would say productivity would halve because we would use two instead of four limbs for locomotion, depressing the GDP. On the other hand, the ape chartered accountant would not only have encouraged walking on two legs, he would have managed to get a tax break for the guy who was doing it. The moral of the story: forget economists, listen to chartered accountants instead.
Me: But the pandemic is getting worse. The death rate is going up.
FM: Look on the bright side. If enough people die, even if GDP comes down, per capita income would go up. And since more elderly people would die, the demographic dividend would go up, productivity would increase and India can take its rightful place as a developed economy. Buy stocks.
I went away from that conversation feeling reassured.
Not long after that fruitful exchange, I became depressed again after the Chinese intrusion in Ladakh. This time, I called a technical analyst.
Me: Boss, the Chinese are coming.
Tehnical analyst: Rubbish. All the charts are bullish. Take a look at these candlesticks here, can’t you see that bullish Doji star. And there’s a harami here.
Me: China?
TA: I mean a harami pattern. See that bullish engulfing sign, it means stocks rock.
Not knowing what to make of all that, I called a fundamental analyst.
Me: Boss, all this talk of trade disruption is not good, no?
Fundamental analyst: It’s fantastic, a heaven-sent opportunity. With everyone gunning for China, we’ll see industry shifting to India, Make in India, India becoming a $10 trillion economy, a world power and so on. Atmanirbhar Bharat will soon be a reality---isn’t some company with Bharat in its name trying to make a vaccine for the virus?
Me: Bharat Biotech?
FA: Not sure. Best buy all stocks that have Bharat in their names.
I felt good for several days after that upbeat chat. But I was increasingly irritable after being locked up at home for so long and called a foreign institutional investor to vent my feelings.
Me: Boss, if these lockdowns continue, there will soon be a wave of bankruptcies, no?
Foreign institutional investor: Good. All the small firms will go belly up, the big ones which are listed will gain market share. It’s great for the market.
Me: Hmmm…
FII: Why are you so negative? Are you feeling lonely and unhappy? Relax, there’s absolutely no reason to feel lonely, you have Powell uncle at the Fed to back you up, Lagarde aunty at the European Central Bank by your side and Kuroda-san at the Bank of Japan, all printing money hand over fist to help you. At home we have Shaktikanta chacha and Nirmala chachi all working away non-stop to support you. Why, even Yi Gang ji, the governor of the People’s Bank of China, sends you his best wishes. Think of them as your extended family. Buy, buy, buy.
That little talk made me feel all warm and comfortable, so much so that I called a day trader.
Me: Boss, I realise now that all is well, everything is hunky-dory and I’d like to start trading in the markets.
Day Trader: Excellent news. Trading is no big deal, all you need to do is look at the Put-call ratio, the 200-day EMA, the RSI, the OI, the MACD and Fibonacci retracements once in a while, apart from keeping an eye on vol and out of the money options.
Me: Oh. Are there any short cuts?
DT: Hmmm….oh, what the hell, JBTDD.
Me: What?
DT: Just buy the damn dips.
First Published on Jul 9, 2020 11:21 am
Last Updated : Jul 09, 2020 02:59 PM IST | Source: Moneycontrol.com
Capgemini lays off bench employees, gets notice from Pune Labour Commission
After Cognizant, French IT service provider Capgemini is now laying off bench employees in India as COVID-19 hurts business.
The company is laying off employees who have been on the bench for more than two months, three employees told Moneycontrol.
In a letter to the Pune Labour Commission, National Information Technology Employees Senate (NITES), a Maharashtra-based IT union, said the union has received complaints from employees about Capgemini putting people on the bench and forcing them to resign or terminating them.
“Because of this, the pay and jobs of close to 300 employees are at risk,” the statement added. Pune labour commission has asked Capgemini to meet them on July 13 to address the situation. Moneycontrol has seen the copy of both the letters.
According to employees and IT union, trouble started for IT employees back in April. Harpreet Saluja, general secretary NITES, said, “We started getting complaints from Capgemini starting April.” Employees had approached the union stating that they were being put on the bench,” he added.
Vinod AJ, general secretary, All India Forum for IT Employees (AIFITE), a Chennai-based IT Union, said their union received information about termination of bench employees.
However, in a statement to Moneycontrol, the company said that the layoffs are performance related. “At Capgemini, we have a robust performance management process. Performance-related reviews are likely to result in some employee exits which is a standard process across the industry. The bottom performers are given a couple of months to better their performance.”
The company said even during COVID-19 they have gone ahead with the increments for employees, at the junior and senior level, starting April. Quantum of these increments, the company had said, was in high single digits.
“This has been done as per plan and in line with our commitment to ensure market competitiveness across all grades. We continue to hire and onboard new employees and have on-boarded more than 9500 hires from January to date,” the statement added.
However, the irony has not lost on the employees. “So, on the one hand, the company is offering hikes and on the other, layoffs are happening, with the focus on the middle management level,” pointed another senior employee.
In April, Capgemini had tweaked its leave policy to cap the total leaves at 15. Employees told Moneycontrol that those who were not on projects were asked to take leaves till the balance reached -5. This would impact them when the employees have to take time off at a later date, some added.
In the email sent to employees, the company said, "Please enter start date as April 7th and end date as per your leave balance (up to -5)."Moneycontrol had seen the copy of the mail that was sent to employees.
Pune labour commission had then asked Capgemini to clarify the issues related to the leave policy, which the company did, said a source aware of the issue. The source added that -5 leave mentioned in the email was not mandatory and was a choice.
In an earlier statement to Moneycontrol, Capgemini said at the time of COVID-19, the company had capped the leaves to 15 only till end of June as an interim measure. In addition, the cap was not applicable for those on maternity leave, those retiring this year and employees requiring medical attention, the statement added.
As the pandemic situation continues and clients cut down tech spending, the IT industry will witness more performance and bench layoffs pointed out experts.
Case in point is the recent instance where Cognizant laid off bench employees. Though the numbers are not clear, according to AIFITE statement, there are close to 18,000 employees on the bench.
With limited projects coming their way, employees who are not assigned to projects had to be moved to the bench. Given the circumstances, many of them have not been able to procure projects resulting in terminations.
First Published on Jul 9, 2020 02:59 pm
TAGS #Capgemini #Covid-19 #Layoffs
Last Updated : Jul 09, 2020 02:53 PM IST | Source: Moneycontrol.com
COVID-19 crisis | Hospitality players bank on property sales as grim outlook continues
A survey by JLL showed that only 20 percent operators believed that revenues could reach 2019 levels within the next six to twelve months
Moneycontrol News @moneycontrolcom
With the hospitality industry in doldrums due to the COVID-19 pandemic, hotel and resort owners have reportedly turned to real estate consultants to sell properties over the past two months as future outlook for the sector continues to look grim.
Insiders told Mint that the situation was set to worsen as the Reserve Bank of India’s (RBI) six-month loan moratorium ends on August 31. Consultants say defaults could rocket as much as 50 percent of the sector’s total outstanding loans, after the moratorium period.
The sector has close to Rs 50,000 crore worth of outstanding loans attached, and revenues from occupancies at post of these have plunged more than 40 percent, according to consulting firm Hotelivate.
The properties for sale include assets valued between Rs 50 crore to Rs 500 crore each belonging to top domestic and international brands, industry officials told the paper.
“High overheads like accruing loan interest and fixed costs have made it untenable to continue running these properties,” they noted.
Moneycontrol could not independently verify the report.
While investors are keeping a “cautious approach and seeking steep discounts on asking price”, Nandi Vardhan Jain, founder and CEO, Noesis Capital, said that transactions are cropping up across the country and have seen “good interest from high net worth individuals (HNIs) and institutions.”
Jain added that current transactions were far apart from traditional sales as some owners had greenlit deals on the basis of replacement costs alone.
“A marked departure from where hotels are valued on the basis of discounted cash flow method and direct-comparison approach with competitors," he added.
With the RBI deadline for loan moratorium nearing its end, the situation seems even grimmer. As per CARE Ratings, occupancy rates may pick up by 35 percent in Q3FY21 and bring the annual average to 25 percent – provided that travel bans are lifted and travel picks up once COVID-19 cases are under control.
However, not all are optimistic. A survey by JLL showed that only 20 percent of operators believed that revenues could reach 2019 levels within the next six to twelve months.
Follow our full COVID-19 coverage here
First Published on Jul 9, 2020 02:53 pm
Last Updated : Jul 09, 2020 02:48 PM IST | Source: Moneycontrol.com
Silver September futures hit record high of Rs 52,086 per kg
In the futures market, silver for September delivery touched an intraday high of Rs 52,086 and a low of Rs 51,410 per kg on the MCX
Moneycontrol News @moneycontrolcom
Silver prices climbed a record high for the September series at Rs 52,086 per kg on July 9 as participants increased their long position. The precious metal benefitted from the weakness in the dollar.
Silver holdings in iShares ETF remained unchanged at 15,637.39 tonne.
In the futures market, silver for September delivery touched an intraday high of Rs 52,086 and a low of Rs 51,410 per kg on the Multi-Commodity Exchange (MCX). So far in the current series, the precious metal has touched a low of Rs 41,558 and a high of Rs 52,086.
Silver futures for September delivery contract jumped Rs 653, or 1.27 percent, to Rs 52,035 per kg at 14:18 hours on a business turnover of 15,805 lots. The same for December delivery gained Rs 666, or 1.27 percent, to Rs 53,083 per kg on a turnover of 302 lots.
The value of September and December contracts traded so far is Rs 1,929.89 crore and Rs 10.93 crore, respectively.
The spot gold-to-silver ratio currently stands at 95.56 to 1, which means the amount of silver required to buy one ounce of gold.
"Silver has rescaled $19/0z amid firmness in both gold and industrial metals. However, this may not continue for long as risk sentiment may affect gold and industrial metals differently. We recommend one to wait for corrective dips before creating fresh long positions," said Kotak Securities.
At 08:54 (GMT), the precious metal was up 1.21 percent quoting at $19.39 an ounce in New York.
For all commodities related news, click here
First Published on Jul 9, 2020 02:48 pm
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