PACL Investors Should Not Respond to Emails from Sebirefunds.org, Its Fraud
Market regulator Securities and Exchange Board of India (SEBI) has warned investors of PACL Ltd not to respond from any mails sent by Sebirefunds.org. 
 
In a release SEBI says, "The Justice RM Lodha (retd) Committee has received complaints from investors that they are receiving emails from [email protected] requesting them to file claim application forms for claiming refund. Further, the said emails include authority letter, purportedly issued by SEBI, in favour of one Shri Ravi Shankar, IAS designating him for the refund related matters."
 
The market regulator says both Justice Lodha Committee and SEBI has not authorised or designated anyone in the PACL refund matters and had not issued any authority letter. 
 
"It is further stated that said email and domain name does not pertain to Committee or SEBI. The investors are advised to be cautious and not to act on such communications, if any, received by them. Investors are also requested not to be misguided or fall in trap of any such inducements and false promises," SEBI says.
 
Earlier, the market regulator has allowed PACL investor with claims of to Rs5000 to correct their forms through its official portal, https://www.sebipaclrefund.co.in. This website would be operational from 24 January 2020 and PACL investors whose forms contain some deficiency, can rectify it from the portal. 
 
"The last date for checking the status of claim applications and/or rectification of deficiencies will be 31 July 2020," SEBI says.
 
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    Market Musing: Investors Must Temper Expectations
    Stock market returns are typically dependent on three factors, namely, corporate earnings, liquidity and sentiments. Sentiments are ephemeral, highly unpredictable and subject to quick reversals. While day traders and momentum players may depend largely on market sentiments, for longer term investors they are not a key factor in determining returns.
     
    Liquidity has a relatively longer impact. Change in liquidity conditions is usually a consequence of some fundamental factors that determine the flow of funds.
     
    Currently, global liquidity is abundant and is likely to continue to be so in the foreseeable future. I had dwelt extensively on this aspect in my earlier article.
     
    The current pricing level of bonds in global markets suggests that interest rates are likely to remain subdued over a long period. Liquidity and cost of funds are unlikely to constrain markets over an extended period.
     
    It would, therefore, be fair to aver that over the longer term, returns on stocks are likely to be determined largely by corporate earnings. It is here that we need to temper our expectations of future returns that may be seen coming from equity investments in India. 
     
    Let us start by looking at the past three decades. Since 1991, the national income of India has grown at 6.7% per annum. Inflation during this period has been 6.55%, providing a nominal growth in gross domestic product (GDP) of 13.69%. 
     
    Growth in corporate earnings can, in general, be expected to correspond to the nominal growth in the national income; hence, it is not surprising that the equity market has given a compounded annual return of a little under 14%, inclusive of dividends over this period. As per our hypothesis, nominal growth in national income, growth in corporate earnings and stock returns have all moved in sync over this period of three decades.
     
    Assuming that the relationship is maintained in future too, estimation of nominal growth in national income becomes critical. This comprises growth in real national income and inflation.
     
    Nothing, however, has generated greater controversy in recent times than the growth rate in real national income. Issues concerning measurement, the base year to use, comparison with the past rates and whether the slowdown is a cyclical or a structural one, the debate has been quite intense. 
     
    A large number of people believe that the current blip is likely to be reversed soon and a return to the heydays of 8% to 10% growth is quite imminent. An equally significant number hold the view that we are done with run-away growth rates of the recent past and must now reckon with long term rates of 5% or even less. 
     
    Depending on which camp one belongs to, the future growth rate in national income can accordingly be estimated. 
     
    The second component is the expected consumer inflation. Here we have relative unanimity, with low rates being universally accepted as the defining characteristic of the economy. From the days of double digit inflation, down to around 4% currently, it has been a significant journey over the last few years. 
     
    The Reserve Bank of India (RBI) has been able to rein in inflation, and it is expected that it will continue to display similar resolve whenever inflation threatens to rear its ugly head again. RBI has now been given the mandate to aim for an inflation of 4%, with a spread of 2% on either side and we could take that as the benchmark for future inflation.
     
    In fact, the global economy is today fighting the threat of deflation, bonds are priced for low, even negative interest rates and I believe inflation in our country may go down even further. 
     
    In India, costs play a much more significant role in elevating prices than they do in developed countries. We are highly dependent on oil and commodities, besides food items, the prices of which are volatile and often lead to high inflation. Besides, the manufacturing process in India faces tremendous bottlenecks and transactions are not smooth and free. As we overcome such bottlenecks, better systems and processes should have a permanent salutary impact on prices and what is termed as ‘the cost push inflation’ is likely to be a less significant factor.
     
    Low inflation combined with an uncertain growth in the gross domestic product (GDP) will have a dampening effect on nominal growth in national income and consequently on corporate profits. The high double digit returns that we have been used to are probably now only a historical curiosity and anyone who invests expecting such high returns will be a disappointed investor. Temper your expectations as you go forward.
     
    Of course, there are several caveats to the above conclusion. It is possible that the relationship between corporate earnings and stock returns may not be as strong as we believe. The last decade has witnessed relatively low growth in corporate earnings in India but the stock returns have been much higher. In reality, investors have expected the corporate earnings growth to bounce back, taking the actual low earnings in their stride. Of course, this cannot continue forever; corporate earnings must come up to expectations or stocks will take a dip.
     
    Corporate profits as a proportion of national income are currently at historical lows in India. A return to normal levels may boost corporate earnings beyond those of the national income and may thereby lead to much higher stock returns. The recent cut in corporate tax has made this a distinct possibility.
     
    Currently, interest rates the world over are extremely low, even negative. Low interest rates boost risk appetite, leading to large funds flowing into stocks. An unusually large amount coming to stocks may be self-fulfilling in itself, ensuring elevated levels of stock prices. We have already seen this happen over the last decade when loose monetary policies of central banks in the western world quantitative easing (QE) have raised asset prices higher than any impact these may have had on consumer demand. Low interest rates and easy liquidity may increase stock prices beyond what is warranted by fundamentals. 
     
    It is useful to remember that while nominal stock returns may be lower than in the past, real returns, the inflation-adjusted returns, may not reduce significantly. Ideally, it is the real returns that matter in terms of purchasing power and the impact on wealth. Try telling that, however, to a typical Indian investor who has been used to much higher nominal returns! Expectations of investors are sticky in nominal rather than in real terms. 
     
    In any case, we are discussing long term returns. In relatively shorter periods, there is every chance that stock returns may not track the growth in nominal income.
     
    Also, while markets may grow at less than double digits, individual stocks may chart their own path. Happy hunting therefore, for stock pickers; passive investing may not appear to be as attractive an option as it does now. 
     
    (Sunil Mahajan, a financial consultant and teacher, has over three decades experience in the corporate sector, consultancy and academics.).
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    COMMENTS

    Ramesh Poapt

    9 months ago

    single digit gain assured?

    PPF Scheme 2019: Account will not be liable to attachment
    The Union government has notified new Public Provident Fund (PPF) rules under which the amount in the PPF account will not be liable for attachment.
     
    The new rules called, Public Provident Fund Scheme 2019, have replaced all the previous PPF rules with immediate effect.
     
    Under the new rules, the amount in PPF account will not be liable to attachment under any order or decree of any court in respect of any debt or liability incurred by the account holder.
     
    It has a provision for extension of PPF account with deposits after maturity: The account holder on the expiry of fifteen years from the end of the year in which the account was opened, may extend his account and continue to make deposits for a further block period of five years.
     
    PPF withdrawal from account will be allowed any time after the expiry of five years from the end of the year in which the account was opened. The account holder may, avail withdrawal of an amount not exceeding 50 per cent of the amount that stood to his credit at the end of the fourth year immediately preceding the year of withdrawal or at the end of the preceding year, whichever is lower.
     
    An individual can open an account by making an application in Form-1. An individual can also open one account on behalf of each minor or a person of unsound mind of whom he is the guardian. Only one account shall be opened in the name of a minor or a person of unsound mind by any of the guardian. No joint PPF account is allowed.
     
    The PPF deposit limit is not less than Rs 500 and not more than Rs 1.5 lakh in a financial year. 
     
    The maximum deposit limit is inclusive of the deposits made in the subscriber's own account and in the account opened on behalf of the minor.
     
    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.
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    COMMENTS

    suneel kumar gupta

    9 months ago

    I am unable to understand the change in rule. To my understanding, every thing is same except for the name.

    REPLY

    bhaskar

    In Reply to suneel kumar gupta 9 months ago

    Yes I too had the same doubt. No change compared to earlier rules

    B Ravi

    9 months ago

    Thats very correct. PPF amount can not beattached to any libility as debt.

    REPLY

    Mohan Krishnan

    In Reply to B Ravi 9 months ago

    In a criminal case one of my relative's bank account and PPF account were frozen after FIR was filed by Police.

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