@Leisure - Vol-32 | srei
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@Leisure - Vol-32

Newsletter
 

What the fish market can teach you about the economy

We tend to think about markets in a very abstract way but if you observe any market that is operational for real, you will notice that markets are very flexible and dynamic in nature. So what can, for example, a fish market reveal about the nature of the economy and the markets themselves?

No perfect competition

People who are studying markets often ignore price sensitivity; they seem to think that competition should drive down prices universally. However, if you go to a fish market and notice carefully, you will see that certain groups like housewives tend to win better prices than others.

Adaptability

Markets tend to factor in changing circumstances very well. A fish market will factor in the perishable nature of the commodity they sell. There is opportunity in every season and even different types of stocks and their varying levels.

Scalability

Markets can contract and expand depending on the supply and demand. As demand grows, markets try to grow bigger to match the increasing demand. Even a fish market cannot afford to turn away prospective buyers.

Oversight

Quality is central to the fish market, and this means regulation is necessary. Food inspectors may be involved in making sure that the place is run hygienically. Every market needs regulators to keep it functioning effectively and efficiently.

A fish market is a microcosm of the broader economy but it is certainly a livelier spectacle to witness. If we look at what constitutes a fish market, we can gain a better appreciation for how the economy and the markets function.

 

Srei Infra Q3 PAT rises 245%

Srei Infrastructure Finance's consolidated net profit has risen by 245 per cent or nearly 3 folds to Rs. 180.65 crore during the 9-month period ended December 2016. For the quarter ended December 31, 2016 (Q3), the company's Profit after Tax (PAT) rose to Rs. 67.21 crore from Rs. 17.16 crore in the corresponding period in 2015. This is a growth of over 290 per cent!

Rise in AUMs

Srei's consolidated assets under management (AUM) have been recorded at Rs. 37,505 crore at the end of December 2016 compared with Rs. 36,949 crore in December 2015. Disbursements have been on the rise as well during Q3 2016-17 and stood at Rs. 4,812 crore compared with Q3 2015-16 when they were at Rs. 3,414 crore.

Srei's growth - a reflection of strategy

Srei has been working consistently towards increasing quarterly profitability. Reductions in Non-Performing Assets (NPAs), focus on margins, increase in disbursements and divestments in certain strategic investments have all been reasons for the growth in PAT.

Markets react positively

Shares of Srei have risen 5.47 per cent in the first week of Feb 2017. In other developments, the board has also approved a public issue of Non-Convertible Debentures (NCDs). Srei's rise in PAT is a reflection of the positive practices put in by the company and the calibre and hard work of its people. It is heartening to know that despite demonetization having been carried out by the government, there has not been a major impact on our operations and we have actually managed to increase disbursements and stay focused on profitability.

 
 

How to go paperless with NCD investments?

Non-Convertible Debentures (NCDs) are getting popular as they offer better returns than traditional investments like fixed deposits. As an example, a recent NCD proposal by Srei offers a coupon rate of 9.50 per cent p.a.1 for a tenure of five years. Comparatively a fixed deposit of the same tenure may only fetch approximately 6.5 per cent p.a. There is one more convenience that NCDs offer, that is, completely paperless transactions. Let's understand about paperless transactions with NCDs:

Convenience

Paperless transactions are a godsend because there is no risk of losing your investment instruments like in the paper format. NCDs issued electronically are also easier to track and there is complete transparency as there is no risk of forged certificates etc.

Requirements

In order to invest electronically in NCDs, you will need to open a demat account with your share broker, bank or online brokerage. These accounts only need to be opened once and the paperwork is relatively easy. In a demat account, you will be able to store your NCDs in an electronic format just like you store money in a savings account.

Transacting in NCDs

You will need a trading account which can be facilitated by your bank, online brokerage or share broker. You will be able to buy and sell the NCDs from your demat account using your trading account on exchanges. There is no need to take the hassle of dealing with paper certificates.

What you need to know

Interest is paid electronically on NCDs; it will be deposited through direct credit in your bank account through Electronic Clearing Service (ECS)/Real Time Gross Settlement (RTGS) or National Electronic Funds Transfer (NEFT).

NCDs offer good returns; they are also convenient and safer to deal with than their physical counterparts. If you have not tried investing in NCDs till now, you should definitely study the benefits and consider them as a part of your portfolio especially since all trading and holding of NCDs is now completely electronic.

1 - http://www.indiainfoline.com/article/news-top-story/srei-ncds-to-offer-coupon-up-to-9-50-p-a-117012600224_1.html

 
 

Buddy Jokes

Jokes / Quotes

Girlfriend: What are the most powerful words other than 'I Love You'?
Boyfriend: Your Salary is credited.
5-year-old boy found 100 rupee note on the road.
His elder sister: What will you do with his money?
Little boy: I will give it to whoever tells the biggest lie.
Elder sister: You should be ashamed of yourself. When I was your age I didn't even know what a lie was.
Little boy: You win. Here's the money.

"It's not your salary that makes you rich; it's your spending habits." - Charles Jaffe

I have enough money to live comfortably for the rest of my life, if I die by next Monday.

My financial adviser says I don't have enough faith and my spiritual adviser says I'm too diversified.

 

Buddy Quiz

1. A fish market shows us that markets are:
a) Adaptive
b) Perfectly competitive
c) Inflexible
d) Corrupt

2. What do you need to invest electronically in NCDs?
a) Bank account, Demat and an ATM card
b) Bank account, Demat account and trading account
c) Bank balance and trading account
d) None of the above

3. Srei Profit After Taxes has been rising because of:
a) Reduction in Non-Performing Assets
b) Increase in disbursements
c) Focus on margins
d) All of the above

4. Markets contract and expand depending on ............
a) Supply
b) Demand
c) Supply and Demand
d) Profits

5. In Q3 Srei registered a .......... percent rise in PAT
a) 299
b) 762
c) 245
d) 176

Answer: 1 - (a); 2 - (b); 3 - (d); 4 - (c); 5 - (c).