SUNDAY WEEKLY ISSUE #8 Good morning EveryFinions!
The stock markets continued their winning spell. The arrival of Pfizer's vaccine has given new hope to the oil markets too and the liquid gold saw swift price movements this week. While optimisim is all around, Royal Carribean cruises which set out to sail for the first time since the pandemic swiftly returned to shore after someone aboard tested positive for the virus - Reminding us once more, that we are still not fully out of this. The markets however are not listening.
IN TODAY'S NEWSLETTER
QUIZ How many ATMs are installed in all of India? MARKET UPDATE SENSEX 43,443 3.7% NIFTY 500 10,387 8.4% Brent Crude $43.1 9.1% Gold (per gram) Rs.5,070 -3.4% NEWS IN BRIEF
IN LESS THAN 200 WORDS (1/2) When India left the party early
We are massive supporters of open borders and free-trade. The European Union single market is one of the most progressive ideas of our times. A continent that was only 70 years ago ravaged by wars and conflicts has come together to open up borders for the free movement of people, goods and capital. But beyond the socio-political aspects of a single market or even a customs union, there must exist strong economic motivations for the union to exist and thrive.
This weekend, 15 Asia pacific nations including China, Australia, New Zealand, Indonesia, Malaysia and Singapore are in the verge of signing a trade deal called the RCEP, Regional Comprehensive Economic Partnership. Covering over 2.2 Billion people living in these countries with a combined GDP ratio of $26.2 Trillion, this is touted to be the world’s biggest free-trade deal. And India is missing this party. Not because we weren’t invited, but because we left too early. The Indian government pulled out of the negotiations almost exactly a year ago. But why?
Take a look below for the list of countries involved in RCEP and the amount of trade we did with each of them. ![]() We had trade surplus with just 4 of them and even that was tiny. Worst of all, the trade deficit with these 15 countries put together constituted to nearly 60% of India’s overall trade deficit in the last two financial years. And there is an argument to be made that should India throw its borders open for goods to flow in freely, this figure will only get worse. While the decision to pull out of the trade deal was possibly made for political and populist reasons, the economic rationale just happens to work out in our favour. What an idea, sir ji! GAME : THE PRICE IS RIGHT! This is the Saffola gold pro healthy lifestyle blended oil 5 litre can. Its retail MRP is Rs.850. ![]() Who amongst the following e-commerce sellers, is selling it at the cheapest price and for how much?
IN LESS THAN 200 WORDS (2/2) Another business idea - Potato farming? CPI inflation figures were released this week. Rather worryingly, inflation was up 7.61% in October 2020 compared to the same time a year ago. Food price index was up even higher by 11%. CPI is baselined in the year 2012 (CPI - 100 in 2012). And here is a look at the price trend captured across several commodities since then. Price inflation in vegetables (10%) has been significantly above the average CPI (6%) increase per year. ![]() And the RBI is probably losing sleep over this. A 2018-19 survey puts total expenditure on food and non-alcoholic beverages at about 25% of total household spend. Here is a look. ![]() A significant price increase in a component which forms a significant part of household spend does not augur well for the country. Vegetable prices were the worst affected going up by over 22% in the last one year followed by egg (+21%), fish & meat (+19%) and pulses (18%). And if this trend continues, there is precious little that the central bank can do to stimulate the economy. It will be stuck between controlling inflation and maintaining its accommodative monetary policy stance. As for us, another great business idea to consider now is to start growing some potatoes in pots in the balcony 🙂 COVER STORY Step by step guide to picking equity mutual funds ![]() This is part-3 of our 3 part series on Mutual Funds. Here are the links to Part 1 and Part 2. This third part is a step by step guide to evaluating and picking equity mutual funds. You'll need some of the concepts we introduced in Part 2 to be able to follow this along. But it is a quick and easy read on how to evaluate equity mutual funds before investing in one. There are 8 steps to it. IN CASE YOU MISSED IT... Heard about negative interest rates? ![]() Bank of England last week announced a bigger than expected monetary stimulus to support the British economy struggling from BREXIT and the second lockdown driven by another wave of COVID-19. Curiously, they also announced that the bank is working on negative interest rates. But what exactly are negative interest rates and how does it even work? IN OTHER NEWS
ANSWER TO QUIZ 5.62 Lakhs That is the number of ATMs and micro-ATMs installed in the country. On the other hand, the number of credit/debit/atm cards in circulation in India is about 92 crores! THOUGHT FOR THE DAY Stray from the herd, be different! ![]() READ/WATCH/LISTEN
ANSWER TO THE PRICE IS RIGHT! Flipkart, ₹679 The place you need to go to in order to get the best price for Saffola gold pro 5L. If you are after Ariel top load detergent 2Kg, go to Bigbasket/Amazon and if you are after Aashirvaad superior 10Kg, go to Jiomart to get the best price. In summary, compare prices before you buy! From the writer in me, to the reader in you ♥
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