Alternative Investment
Sovereign Gold Bonds issue extended to November 30
The Reserve Bank of India (RBI) on Wednesday extended the issue date of the Sovereign Gold Bond scheme by four days to November 30 to enable their proper processing.
 
"Large number of applications has been received by banks and post offices. To enable smooth uploading of applications into RBI's E-kuber system, particularly by the post offices, it has since been decided to shift the issue date of the Sovereign Gold Bond from November 26, 2015 to November 30, 2015," the RBI notified on its website.
 
The first tranche of Sovereign Gold Bonds, which opened for subscription from November 5 to November 20, 2015, were to be issued on November 26.
 
The scheme, so far, has generated lukewarm response, with bankers pegging the overall
collections at Rs.150 crore. This, according to banks, is owing to a higher issue price, which the RBI had set at Rs.2,684 per gram, while the ruling market price was lower.
 
The finance ministry announced last month that the bonds would be sold through banks and notified post offices. These bonds would be issued by the Reserve Bank of India on behalf of the central government.
 
Finance Minister Arun Jaitley, in the 2015-16 budget, had announced the development of a financial asset - sovereign gold bond - as an alternative to the precious metal, and the borrowing through issuance of the bond will form part of market borrowing programme of the government.
 
The gold bonds are denominated in multiples of gram(s) of gold with a basic unit of one gram while the minimum investment limit is two grams.
 
The maximum subscription is 500 grams per person per fiscal (April-March) and for joint holders, the limit will be applied on the first holder.
 
As per the scheme, the gold bonds will be sold only to resident Indian entities including individuals, Hindu undivided families, trusts, universities, and charitable institutions.
 
The issue and redemption price are in Indian rupees fixed on the basis of the previous week's (Monday-Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd.
 
As per the scheme, the bond tenure will be eight years with exit option beginning the fifth year onwards. The bonds will also be tradable in the bourses.
 
The rate of interest will be 2.75 percent per annum payable semi-annually on the initial value of investment.
 
Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
 
As to the tax treatment, interest on gold bonds will be taxable as per the provision of Income Tax Act, 1961 and the capital gains tax shall also remain same as in the case of physical gold.
 
Commission for distribution shall be paid at the rate of one percent of the subscription amount.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

Shirish Sadanand Shanbhag

1 year ago

Government got only peanut of gold just less than 3 kgs, in whole country, when Government was expecting gold in few tons.
With only 2.75% interest per annum, who will buy these bond in India?

Failure on reforms like GST, land law could hit investment: Moody's
Moody's Investors Service on Wednesday said the failure to implement reforms by passing the GST and land bills in parliament could potentially hurt investments amid weak global growth and prove to be a "downside factor" for Indian companies.
 
"It seems highly unlikely that the major reforms will get enacted by the upper house of the Indian parliament where the ruling coalition is in minority. A failure to implement these reforms could hamper investment amid weak global growth," Moody's vice president Vikas Halan said in a report.
 
"The government is unlikely to win a majority in the upper house if it keeps losing state elections like it did recently in Delhi and Bihar. Opposition parties are unlikely to allow key reforms to go through," he added.
 
The constitution amendment bill for Goods and Services Tax (GST) has been passed by Lok Sabha, and is pending in the Rajya Sabha, where the ruling NDA does not have majority.
 
Minister of State for Finance Jayant Sinha told reporters here on Monday that the government is making efforts to convince the opposition about the GST bill.
 
"We are trying to talk with them (opposition) about all the aspects of GST. We all recognise how important this is for the economy so we are in continuous discussion to see what we can do to get it passed in the winter session," he said.
 
The American agency cautioned that continued weak global growth and the prospect of the US Federal Reserve raising interest rates may also have an impact on Indian companies.
 
"The corporates remain vulnerable to the volatile Indian rupee as against the US dollar and to low commodity prices, which has in turn led to a sharp decline in external trade," Halan said.
 
"The fall in commodity prices has benefited many Indian corporates given the country's status as a net importer of raw materials and its recent history of high inflation. But low commodity prices will result in deterioration of credit metrics of metals and mining companies," he added.
 
Other "downside factors" listed by Moody's are loss of reform momentum leading to annual GDP growth falling below 6 percent, resulting in deterioration of credit metrics, besides higher interest rates brought on by rising inflation and exchange rate volatility, resulting in a tight funding environment.
 
Among the upside factors include further government measures that could sustain the GDP growth at 8 percent plus, leading to a broad-based improvement in corporate credit metrics.
 
Also, improvement in the global macroeconomic environment leading to stabilising commodity prices and credit markets would be positive, it said.
 
Sector-wise, Moody's expects upstream oil and gas companies to benefit from lower fuel subsidy burdens, although low crude and domestic natural gas prices will continue to hurt profitability.
 
However, refining and marketing companies should benefit from healthy margins as demand growth outpaces expected capacity additions, Moody's said.
 
Moody's negative outlook for the steel industry reflects elevated leverage and an extended period of low prices owing to continuing steel imports, while the negative outlook for metals and mining companies reflects bleak global commodity prices.
 
In real estate, Moody's expects demand to improve in 2016 on the back of lower interest rates, although approval delays could postpone project launches for property developers.
 
In the auto sector, Moody's said that retail sales volume will grow 6 percent in 2016 on sustained growth in passenger vehicles sales and recovery in commercial vehicle sales.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

Ganesh Kamat

1 year ago

GST Simplified,
1) For Big Tax collections
take 1% Tax from 20 Taxpayers
than 20% Tax from one Taxpayer.

2) Simple Tax of 1% on Receipt /Transaction /Interest /Sale /Gift /Loan /Benefit /Salary /Dividends /Rent /Custom.....
any & all inward cash, Cheque etc.

3) Average say on Rs 30 L Receipt,
Pay Rs. 0.3 Lac Tax per year.
If Taxpayers = 60 Cr.
Tax collection will be 18 L- Cr.

4) Simple Tax means more Taxpayers, more collection & No refund Problem.

5) At present, we have say @ 3 Cr Taxpayers,
with Collection of say @ 3.5L-Cr,

6) So with 1℅ Tax, the Taxpayers will work to improve Business / Goods Services/ R. & D. / Social work.
So more Employment, make in India, less Farmer Suicide & Peace of mind to the people.

7) Bank Account number is your mobile number.

8) Tax payment by your mobile number @ RBI a/c,
In bank transaction, the Bank will deposit your 1℅ Tax by your mobile number @ RBI a/c directly.

9) For cash Transaction pay similar to Post paid Mobile charges,
to your mobile number @ RBI a/c.
Most will pay if the Tax is 1% & simple to pay.

10) Your Bank Account Number should be mobile number & connected to PAN/ AADHAAR /Passport/ Election Card etc. For Simplicity.

11) Tax collection will be distributed to State & Local bodies, say 10% each, from the place of collection.

12) Also add 1% more (L.P.F.)
Less Privilege Fund,
similar to PPF for,
social / self benefit,
to give Power to the people for Social Cause / in your bad days.

13) In short Pay Rs. 20- for every Rs. 1,000- Received.

i) Rs. 10- as tax to RBI
ii) Rs. 10- in your (L. P. F.) a/c. Could be use for social cause/ for your bad days.

14) L. P. F. (Less Privilege Fund)
of 18 L- Cr, with 60 Cr voters, will reduce dependency on the Government for the Social development. Fund will be used for the Social cause / in your bad days.

15) Keep faith in 60 Cr voters, as they will take care of their neighbours, in need.
Also most will pay, if Tax is 1℅ & Simple to pay.
Only Indian can make better India.

16) Can consider more tax for Higher Receipt, say above 0.5 Cr per year, payable at the year ending.

17) All Transactions are Traceable as mobile number is once Bank a/c number & connected to PAN/ AADHAAR / Election card.....
So, No Corruption & Black Money Problem.

18) Babus Harassing the youth,
Traders,Farmers, Voters.. who wants to work.
Babus are ruthless as they
pay "Protection Money" to......?
for Posting/ Promotion/ Permit...
Administrations Reform is a Must,
For getting Votes too!!

19) Farmers suicide can get reduced, by encouraging them to sell their farm products on Railways to commuter & roads to motorists, also we need more Passenger Train, to help farmers to sell farm products, to nearby Towns.

20) Expecting Feedback on How to make India Peaceful Place by Refined, Simple Laws.
No blame game please.
Media/ Babus /Netas /Judicial Role is Eminent along with People.

For "Sare Jaha Se Achha Hindustan Hamara." forward this message.

Market men question SEBI’s new IPO application format
The latest move by stock markets regulator SEBI to introduce an abridged prospectus with a new IPO application form does not solve either the purpose of transparency or the retail investor interest as it raises several questions than simplifying the procedures, say market analysts.
 
The SEBI has issued a notification introducing a ten-page format -- five sheets, printed on both sides -- replacing the 100-page version of the prospectus, to be issued with IPO application forms. The new format will be effective December 1, 2015. 
 
It provides for increasing the font size of the application form, but at the same time abridges the material information that ought to be given to the investor about the company and its business.
 
For instance, as a legal expert says, the all-important risk factors section which normally runs into 35 to 40 pages is supposed to be condensed to 500 words. Even the section on the company’s business is supposed to be not more than 500 words. 
 
Market analyst Arun Kejriwal, director of KRIS research, says “the increase in font size on page One which has to be filled by applicant is welcome because one can read the columns without using a magnifying glass.” 
 
But, he says, the guidelines on inside pages leave much to be desired. For instance, the selection of risk factors becomes subjective. “There is a lot of ambiguity as to which factor is important and which is not. This could result in playing with fire,” he says. 
 
Appreciating SEBI’s consistent efforts to make stricter compliance norms and increase the number of disclosures to the investor community, a top corporate lawyer said the latest move defeats the very purpose for which SEBI has been working. 
 
On the one hand, SEBI has been working on SME listing and norms and fund raising by startups, while on the other it is making regressive moves like the abridged prospectus, he said. 
 
Market experts opine that the retail investor will be unable to take decision on investing in IPOs on the basis of limited information given in the ten-page booklet. This could lead to increased retail apathy to IPOs, they aver. 
 
A close watch of the retail participation in primary markets recently shows that the segment’s participation has been quite discouraging and, as per media reports, SEBI itself has taken a serious view of this. 
 
Retail quotas in two major IPOs recently - InterGlobe Aviation (Indigo) and Coffee Day Enterprises - were not fully subscribed. 
 
“As it is, the retail participation in IPOs is turning out to be very poor. Our apprehension is that the common investor will develop further disinterest as the information available to him readily is very limited to allow him to take a considered decision to put his hard-earned money into IPOs,” said a merchant banker, speaking on condition of anonymity. 
 
Another merchant banker expressed the apprehension that company promoters would print fewer copies of the full-fledged offer document running into hundreds of pages and it will not be accessible to either broking or the investing community at large.
 
“Though we will have the option of tapping the online version of offer document, I seriously doubt how many investors in small centres in particular will be able to access it,” he said. 
 
Data in public domain shows that India has over 350 million Internet users but the personal computer installed base is merely 55-60 million. Out of the total number of PCs installed, 55 percent are used by individual consumers and the remaining 45 percent by businesses and institutions. This poor penetration certainly limits the scope of retail investors tapping the computers for downloading IPO prospectus. 
 
The other major consumer of the Internet data is the large mobile user base -- 65 percent of India’s Internet traffic as of May 2015 was driven by mobile devices.
 
As of February 2015, only 13 percent of subscribers in India were using 3G and 4G networks. Based on Cisco’s 2014 VNI Mobile forecast, India is at the lower-end of global use of data. 
 
A major broking house partner said: “However smart, you cannot use smart phones to download a 500-page offer document and then read it before filling up an IPO application form.” 
 
“At this rate, I wonder how the government will be able to fulfill its budget announcement to help companies reach out to retail investors,” he said.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

rahul agrawal.

1 year ago

According to my view SEBI does not want retail investors to participate in IPO'S, that why without collecting any proper data they are in a hurry to implement such system.

Narendra Agre

1 year ago

on the news of Sebi proposes to reduce nos of pages , its really concern, since the news flow available on the company would be very limited. prospectus is already shortage in the market and fail to understand Sebi's reason for same to do.
if someone knows the reason please advise why sebi is doing the same.

Narendra Agre

1 year ago

on the news of Sebi proposes to reduce nos of pages , its really concern, since the news flow available on the company would be very limited. prospectus is already shortage in the market and fail to understand Sebi's reason for same to do.
if someone knows the reason please advise why sebi is doing the same.

KAVIRAJ B PATIL

1 year ago

Every person of average intelligence should read good books on investing and invest in equities directly. Information about companies is easily available on the net including annual reports. Devoting one hour in a week to study equities is a good practice which will help one to invest sensibly. This will help us avoid drowning in paperwork like KYC which is what the SEBI chairman wants us to do. KYC is only KICK YOUR CUSTOMER. Staying away from MFs is the investors weapon against meaningless form filling.

Pravesh P

1 year ago

Current SEBI chairman's tenure is even worse than the previous ones. If the previous one drove distributors away from MF (mutual fund), this one has driven investors away.

Few years back I was investing via MFs only. But thanks to AMFI lobbying and expense ratio rulings, FACTA & KYC compliance, I have moved out of MF and moved to direct equity.

R Balakrishnan

1 year ago

The capital market regulations will always be in favour of the capitalists. The investment bankers, the lawyers and others have a stake in ensuring that the investor does not get timely and relevant information. SEBI can shout all it wants, but is a tool to retain status quo

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)