SEBI has shared new framework for short selling in Indian financial markets and allowed both institutional and retail investors to short sell.

“Short selling” is selling a stock which the seller does not own at the time of trade.

🧵 on the details. Naked short selling shall not be permitted.

All investors would be required to mandatorily honor their obligation of delivering the securities at the time of settlement.

Otherwise Securities will go in auction and sellers need to find buyers there.

It means Intraday selling and then squaring off positions is OK for retail investors, carry forward is NOT.

Markets had an extremely smooth run-time in last 5 months, much ahead of everyone's expectations.

Older and wiser investors are unduly cautious while newer and bold investors with YOLO approach wants more.

Time for some investment lessons learned from past cycles 🧵 (1) Define your investment objectives and goals clearly.

Success in investment depends largely on clarity in investment O&G. Factors like growth, yield, income, risk, are dynamic & will keep on changing every year.

Investors must periodically re-evaluate objectives.

A thread of the 10 best podcast episodes (& series) I listened to this year #2022inreview

PS : I use @Spotify as my platform, so hyperlinks are from there. In the case of the series, I have shared a link to the first episode.

This is across genres. RT for wider benefit. (1) For over ~4hrs, @amitvarma and @BShrayana discuss the complexities of being a woman in India. Context is the latter's wonderfully written - "Desperately Seeking Shah Rukh" which is a cleverly disguised economics book talking about movies.

open.spotify.com/episode/5JVmQU…

Certain business channels allowing ONLY SEBI registered analysts & advisors to come on their shows from NOW ON after all this brouhaha is just hogwash.

This should have been done always in the past but that's not how money is made on channels. Eventually all business channels need to survive which means more hits and clicks across various social media platforms. So called finfluencers provided that on a platter, regulation be damned.

So now following the RA (2016) or RIA (2013) regulations smells of hypocricy.

Quite a lot of investors are worried about the FPIs dumping Indian equities and concluding that this is the prime reason for the ongoing correction in stock prices.

A 🧵 to understand details about FPIs buying and selling in financial markets before jumping to conclusions (1) FPIs are NOT a uniform class of investors.

Some examples:

Pension funds - very long term horizon (multi-decades)
Hedge funds & AIF - very short term horizon (3-6m)
EM funds - buy/sell as basket including India
ETFs - MSCI, iShare EM, iShare Asia, FTSE

A good article on the challenges of working as SEBI registered Investment advisor (RIA). The new norms have come from Oct-20 and it has caused more harm than good.

A short thread 🧵

https://twitter.com/apri_sharma/status/1499625963088642051

(1) The 2yr PG in "relevant stream" clause is filled with roadblocks (Earlier it was only PG). Forcing RIAs to do a PG degree that too of 2 yrs is bizzare. Many professional certifications like CS were removed from the equivalent PG category overnight.

A thread of best twitter threads I read this year #2021inreview #twitter #threads (1) Why does Red Bull own an F1 team?

https://twitter.com/TrungTPhan/status/1474064372079075330?s=20

A thread on cumulative FII inflows into India in the CY2020

Background  : This was a widely shared link on social media and also tweeted by FM @nsitharaman amid a lot of discussion around the strong foreign inflows in Indian equities.

moneycontrol.com/news/business/… India received ~1.6 lakh crore in FII flows last calendar year when most Asian and emerging markets witnessed outflows. This is encouraging stuff one would say. However, this is not the complete story.

A thread on the new Registered investment advisors (RIA) regulations which are coming to effect from 30th Sept, 2020

SEBI came up with the final regulations/explanations yesterday. Here is the link to the circular

sebi.gov.in/legal/circular… (Q1) Are there any new changes apart from the one notified in 1 July, 2020 and effective now?

Not much, but SEBI has given few clarifications where RIA has raised doubts. Good news is there are no further burden. The new guidelines are almost similar to the consultation paper.

(1/n) A thread on the SEBI new circular with respect to increase in equity exposure across multi-cap funds

For brevity, Large caps (LCs), Mid caps (MCs) and Small caps (SCs) (2/n) Which funds are impacted by this?

ALL multi-cap funds. [It does NOT mean focused funds with multi-cap strategy or Combination funds (large & mid or mid & small cap types)]

A clean reading means Multi-cap funds with international exposure to equities will also be impacted

"Right now, we're in an absolute raging mania. We've got commentators encouraging companies to do stock splits. Companies then go up 50%, 30%, 40% on stock splits. That brings no value, but the stocks go up"

Very interesting comments from Druckenmiller

https://twitter.com/SquawkCNBC/status/1303665278262353920

"I have no clue where the market is gonna go in the near term. I don't know whether it's going to go up 10%; I don't know whether it's going to go down 10%," Druckenmiller said. "But I would say the next three-to-five years are going to be very, very challenging"

There are some genuine queries regarding this. It was clarified by the exchanges couple of weeks ago.

Please see the new thread below for further clarification

https://twitter.com/amitgupta0310/status/1287389997759205376

(1) The minimum margin requirement for BUYING stocks from the client can be 20% of the trade value instead of (earlier decided) full 100% VAR+ELM

In such case, broker will make up for the difference between this 20% and VAR+ELM from its own capital. Most will be happy to do so

The global economy is recovering at a modest pace after bottoming out in April, with data showing much improvement from May to July. But how long can this pace be sustained? Will social distancing measures and restricted global travel cap the recovery? Those remain key questions as we gauge the "new normal" across major economies.

Sure, things are getting better with time but how much "better" can things be when there are fears of a second wave brewing in many countries/regions once again?

Thread on 3 stocks - Balaji Amines, Thyrocare and Sterlite Technologies (Disc : no position in any of them) being added into watchlist.

Exchanges regularly update the stocks watchlist who come frequently on SMS. It did so last night and included these 3.

bseindia.com/downloads1/Cur… The stocks are added into the watchlist only as a Cautionary measure to investors.

Most such stocks are "shady" and SMSes on WA & TG/messages on social media are floated to the advantage of operators and at the expense of gullible investors.

Every decision of the #MSDhoni retirement shows evolved thinking - The Date (15th Aug signifying his army association in last few years), the time (1929 hours when sun set at the southernmost point of India at Cape #Comorin)... His last Instagram message (#Sahir Ludhianvi lyrics to show how any success or failure is just a fleeting moment) and taking decision at a time when there will be no media interaction (#CSK players are in bio bubble before departure for IPL).

Weekend Readings - 7 Aug'20 : Edition 1
amitgupta.substack.com/p/weekend-read… amitgupta.substack.com/p/weekend-read…

Repo Rate kept unchanged at 4%
MSF and Reverse repo rate unchanged
Accommodating stance emphasized Supply chain disruption led to higher inflation outlook in near term
Higher taxes leading to higher energy inflation
2HFY21 inflation may ease

It's that time of the season again when Divestment talks during a bull run gathers momentum (with little results)

LIC IPO is back on the table with advisors being chosen. Fair enough!

A thread below on why LIC IPO is not going to be a cakewalk (a) LIC is the largest #DII in India handling $500bn #investment portfolio. LIC act stipulates that all #receipts and payments need to be made out of that fund only. In case govt divest 10% stake (min stake required as per #SEBI regulations), who will do the corpus handling?

Unusual and unnecessary confusion regarding the new margin rules in certain segments.

A thread explaining the details as per SEBI notice(s) so far... In 2019 June, SEBI outlined new margin rules for F&O segment citing that intraday losses and margins need to be paid in advance to the broker. Suitable penalties were imposed.

After postponing once in Aug-19, finally the new F&O rules were implemented from 1st Oct, 2019.

There are solid reasons for Gold and Silver to keep moving higher.

There is more stimulus to come. EU just approved a 750bn euros fund for Corona recovery. That's a huge slosh of liquidity right there. Remember, they are at negative rates.

https://twitter.com/amitgupta0310/status/1276914785091612673

The increase in COVID-19 cases globally, especially in the US, mean that the Fed is likely to ease more which will suit gold upside even further

Fed officials have warned that the US outlook is getting worse and easing is the answer.

US is at zero rates.

This 7-film announcement virtually sounds a death knell for film exhibitors for next 6 months. Netflix, Amazon and other OTT platforms are likely to follow with similar announcements.

https://twitter.com/DisneyplusHSVIP/status/1277576274685255681

The content supply is a major issue now. With new movies going directly to OTT and actual shootings happening in a calibrated (and slower than usual) manner, means there will be dearth of content in next few months.