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To invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future.In finance, the expected future benefit from investment is a return. The return may consist of capital gain and/or investment income, including dividends, interest, rental income etc.Investment generally results in acquiring an asset, also called an investment. If the asset is available at a price worth investing, it is normally expected either to generate income, or to appreciate in value, so that it can be sold at a higher price (or both).Investors generally expect higher returns from riskier investments. Financial assets range from low-risk, low-return investments, such as high-grade government bonds, to those with higher risk and higher expected commensurate reward, such as emerging markets stock investments.Investors, particularly novices, are often advised to adopt an investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk. Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk.An investor may bear a risk of loss of some or all of their capital invested, whereas in saving (such as in a bank deposit) the risk of loss in nominal value is normally remote. (Note that if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavorably, so that the value in the account holder's home currency of the savings account decreases.)Speculation involves a level of risk which is greater than most investors would generally consider justified by the expected return. An alternative characterization of speculation is its short-term, opportunistic nature. Investments are often made indirectly through intermediary financial institutions. These intermediaries include pension funds, banks, brokers, and insurance companies. They may pool money received from a number of individual end investors into funds such as investment trusts, unit trusts, SICAVs etc. to make large scale investments. Each individual investor holds an indirect or direct claim on the assets purchased, subject to charges levied by the intermediary, which may be large and varied. Approaches to investment sometimes referred to in marketing of collective investments include dollar cost averaging and market timing. A value investor buys undervalued securities (and sells overvalued ones). To identify undervalued securities, a value investor uses analysis of the financial reports of the issuer to evaluate the security. Value investors employ accounting ratios, such as earnings per share and sales growth, to identify securities trading at prices below their worth.Warren Buffett and Benjamin Graham are notable examples of value investors. Graham and Dodd's seminal work Security Analysis was written in the wake of the Wall Street Crash of 1929.The price to earnings ratio (P/E), or earnings multiple, is a particularly significant and recognized fundamental ratio, with a function of dividing the share price of stock, by its earnings per share. This will provide the value representing the sum investors are prepared to expend for each dollar of company earnings. This ratio is an important aspect, due to its capacity as measurement for the comparison of valuations of various companies. A stock with a lower P/E ratio will cost less per share, than one with a higher P/E, taking into account the same level of financial performance; therefore, it essentially means a low P/E is the preferred option. An instance, in which the price to earnings ratio has a lesser significance, is when companies in different industries are compared. An example; although, it is reasonable for a telecommunications stock to show a P/E in the low teens; in the case of hi-tech stock, a P/E in the 40s range, is not unusual. When making comparisons the P/E ratio can give you a refined view of a particular stock valuation.For investors paying for each dollar of a company's earnings, the P/E ratio is a significant indicator, but the price-to-book ratio (P/B) is also a reliable indication of how much investors are willing to spend on each dollar of company assets. In the process of the P/B ratio, the share price of a stock is divided by its net assets; any intangibles, such as goodwill, are not taken into account. It is a crucial factor of the price-to-book ratio, due to it indicating the actual payment for tangible assets and not the more difficult valuation, of intangibles. Accordingly, the P/B could be considered a comparatively, conservative metric. Free cash flow measures the cash a company generates which is available to its debt and equity investors, after allowing for reinvestment in working capital and capital expenditure. High and rising free cash flow therefore tend to make a company more attractive to investors.The debt-to-equity ratio is an indicator of capital structure. A high proportion of debt, reflected in a high debt-to-equity ratio, tends to make a company's earnings, free cash flow, and ultimately the returns to its investors, more risky or volatile. Investors compare a company's debt-to-equity ratio with those of other companies in the same industry, and examine trends in debt-to-equity ratios and free cash flow.

 

A popular valuation metric is Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA), with application for example to valuing unlisted companies and mergers and acquisitions.For an attractive investment, for example a company competing in a high growth industry, an investor might expect a significant acquisition premium above book value or current market value, which values the company at several times the most recent EBITDA. A private equity fund for example may buy a target company for a multiple of its historical or forecasted EBITDA, perhaps as much as 6 or 8 times.In certain cases, an EBITDA may be sacrificed by a company, in order for the pursuance of future growth; a strategy frequently used by corporate giants, such as, Amazon, Google and Microsoft, among others. This is a business decision that can impact negatively on buyout offers, founded on EBITDA and can be the cause of many negotiations, failing. It may be recognized as a valuation breach, with many investors maintaining that sellers are too demanding, while buyers are regarded as failing to realize the long-term potential of, expenditure or acquisitions.The amount to pay in taxes for long term investments, investments that span over a year long term, and short term investments such as those that are below a year are different. The long term investments range from Zero to twenty percent for capital gains and they are regulated by what tax bracket you are in for income taxes. For the zero to fifteen percent income tax bracket you could qualify for the zero percent long-term capital gains rate. The next bracket is the fifteen to twenty percent income tax bracket where you are set at fifteen percent capital gains tax for long term investments. The next bracket is between twenty and 39.6 percent and that leads to a twenty percent capital gains tax however with these numbers you should add 3.8 percent for the health care surtax. The short term capital gains tax is also related to your total taxable income and is taxed at the same rate as your income and ranges from ten to 39.6 percent

News

Standard Chartered gets down to 'war-gaming' Trump trade battles

CEO Winters says bank planning in case 'things get very messy' Posted: Sat 25th of February, 2017

US regulators investigating our foreign hiring practices: Citi

Banks including JPMorgan Chase & Co and Goldman Sachs Group have disclosed similar investigations Posted: Sat 25th of February, 2017

A bad bank could work but only if govt infuses more capital: Fitch

Fitch said that similar mechanisms have been used to help clean up banking systems in the US Posted: Fri 24th of February, 2017

Credit Suisse rejigs Pvt Banking biz brass in India

Kunnambath would report to Alex Wade, Head of Developed and Emerging Asia Posted: Fri 24th of February, 2017

Icra cuts rating on IDBI Bank's bonds

Weak Q3 performance triggers rating review Posted: Fri 24th of February, 2017

Standard Chartered India reduces loss sharply

It had impairment losses on loans and other credit-risk provisions of Rs 6,251.52 cr in 2015 Posted: Fri 24th of February, 2017

Face 'de-authorisation', govt to banks on non-acceptance of PMGKY tax

Post note ban, unaccounted cash can be deposited under PMGKY in banks till March 31 Posted: Fri 24th of February, 2017

LinTeractive bags digital mandate for HDFC ERGO's campaign on motor insurance

LinTeractive has been entrusted the task to create a digital engagement for HDFC Ergo Posted: Fri 24th of February, 2017

AIG sees uncertainty in 'too-big-to-fail' label for insurers-filing

In 2008, AIG nearly got collapsed and get $182 billion bailout by the US government Posted: Fri 24th of February, 2017

Canara Bank to raise Rs 716 cr from stake sale in Can Fin

Board has given approval for the sale of 13.45 per cent stake in the mortgage firm Posted: Thu 23rd of February, 2017

Five associate banks to merge with SBI from April 1

SBI is expected to become a lender of global proportions with an asset base of over $555 billion Posted: Thu 23rd of February, 2017

Airtel Payments Bank to sell insurance, MF products

APB had already opened 2.5 lakh banking points across the country Posted: Thu 23rd of February, 2017

ICICI Bank acquires 81.44 cr shares in JPVL

Before the acquisition, the bank held 79,61,535 shares or 0.13% of equity in the company Posted: Thu 23rd of February, 2017

Bankers don't want a new NPA resolution plan

Implement the existing one properly to clean up the mess Posted: Wed 22nd of February, 2017

PAC summons four banks to find out big loan defaulters

Parliamentary panel to visit Chennai Feb 27 and Kolkata March 1 to discuss bank NPAs Posted: Wed 22nd of February, 2017

SBI Research pegs Q3 GDP growth at low 5.8%; FY17 at 6.6%

From next year growth could move up faster if demand comes back faster post-remonetisation Posted: Wed 22nd of February, 2017

NPCI starts pilot project to digitise MFI transactions

Process has been initiated to bring payments by digitising transactions of Svatantra Microfinance Posted: Wed 22nd of February, 2017

At 12%, banks in Odisha have higher NPA than national average

The non-performing assets (NPAs) of banks in Odisha is recorded at 11.95 per cent as on December 31, 2016 with maximum slippages noted in the loans advanced to the agriculture and education sectors.Though bad loans crisis is a nationwide phenomenon, the gross NPAs of banks operating in Odisha at 11.95 per cent is higher than the pan-India average of 9.3 per cent (as on December 2016) of both the public and private sector banks.In Odisha, out of the total outstanding advances of Rs 105109.84 crores to priority and non-priority sectors, the NPA stood at Rs 12557.10 crore for the quarter ended December 31, 2016.A loan or advance for which the principal or interest payment remained overdue for a period of 90 days is classified an NPA.The NPA rate in the state is the highest in case of agriculture term loans and it is pegged at 17.83 per cent. For the overall agriculture sector, the rate stood at a whopping 13.48 per cent.The rate for MSMEs is 12.87 per cent while it is 14.45 per cent and . Posted: Wed 22nd of February, 2017

India's bankers sceptical over RBI proposal on bad loans

RBI Deputy Governor Viral Acharya proposed creation of a private-based agency Posted: Wed 22nd of February, 2017

HDFC Bank FPI trade: RBI, Sebi to tighten norms on trigger point

Sebi and the RBI are looking at tightening trigger points for foreign portfolio investment Posted: Wed 22nd of February, 2017

News

Standard Chartered gets down to 'war-gaming' Trump trade battles

CEO Winters says bank planning in case 'things get very messy' Posted: Sat 25th of February, 2017

US regulators investigating our foreign hiring practices: Citi

Banks including JPMorgan Chase & Co and Goldman Sachs Group have disclosed similar investigations Posted: Sat 25th of February, 2017

A bad bank could work but only if govt infuses more capital: Fitch

Fitch said that similar mechanisms have been used to help clean up banking systems in the US Posted: Fri 24th of February, 2017

Credit Suisse rejigs Pvt Banking biz brass in India

Kunnambath would report to Alex Wade, Head of Developed and Emerging Asia Posted: Fri 24th of February, 2017

Icra cuts rating on IDBI Bank's bonds

Weak Q3 performance triggers rating review Posted: Fri 24th of February, 2017

Standard Chartered India reduces loss sharply

It had impairment losses on loans and other credit-risk provisions of Rs 6,251.52 cr in 2015 Posted: Fri 24th of February, 2017

Face 'de-authorisation', govt to banks on non-acceptance of PMGKY tax

Post note ban, unaccounted cash can be deposited under PMGKY in banks till March 31 Posted: Fri 24th of February, 2017

LinTeractive bags digital mandate for HDFC ERGO's campaign on motor insurance

LinTeractive has been entrusted the task to create a digital engagement for HDFC Ergo Posted: Fri 24th of February, 2017

AIG sees uncertainty in 'too-big-to-fail' label for insurers-filing

In 2008, AIG nearly got collapsed and get $182 billion bailout by the US government Posted: Fri 24th of February, 2017

Canara Bank to raise Rs 716 cr from stake sale in Can Fin

Board has given approval for the sale of 13.45 per cent stake in the mortgage firm Posted: Thu 23rd of February, 2017

Five associate banks to merge with SBI from April 1

SBI is expected to become a lender of global proportions with an asset base of over $555 billion Posted: Thu 23rd of February, 2017

Airtel Payments Bank to sell insurance, MF products

APB had already opened 2.5 lakh banking points across the country Posted: Thu 23rd of February, 2017

ICICI Bank acquires 81.44 cr shares in JPVL

Before the acquisition, the bank held 79,61,535 shares or 0.13% of equity in the company Posted: Thu 23rd of February, 2017

Bankers don't want a new NPA resolution plan

Implement the existing one properly to clean up the mess Posted: Wed 22nd of February, 2017

PAC summons four banks to find out big loan defaulters

Parliamentary panel to visit Chennai Feb 27 and Kolkata March 1 to discuss bank NPAs Posted: Wed 22nd of February, 2017

SBI Research pegs Q3 GDP growth at low 5.8%; FY17 at 6.6%

From next year growth could move up faster if demand comes back faster post-remonetisation Posted: Wed 22nd of February, 2017

NPCI starts pilot project to digitise MFI transactions

Process has been initiated to bring payments by digitising transactions of Svatantra Microfinance Posted: Wed 22nd of February, 2017

At 12%, banks in Odisha have higher NPA than national average

The non-performing assets (NPAs) of banks in Odisha is recorded at 11.95 per cent as on December 31, 2016 with maximum slippages noted in the loans advanced to the agriculture and education sectors.Though bad loans crisis is a nationwide phenomenon, the gross NPAs of banks operating in Odisha at 11.95 per cent is higher than the pan-India average of 9.3 per cent (as on December 2016) of both the public and private sector banks.In Odisha, out of the total outstanding advances of Rs 105109.84 crores to priority and non-priority sectors, the NPA stood at Rs 12557.10 crore for the quarter ended December 31, 2016.A loan or advance for which the principal or interest payment remained overdue for a period of 90 days is classified an NPA.The NPA rate in the state is the highest in case of agriculture term loans and it is pegged at 17.83 per cent. For the overall agriculture sector, the rate stood at a whopping 13.48 per cent.The rate for MSMEs is 12.87 per cent while it is 14.45 per cent and . Posted: Wed 22nd of February, 2017

India's bankers sceptical over RBI proposal on bad loans

RBI Deputy Governor Viral Acharya proposed creation of a private-based agency Posted: Wed 22nd of February, 2017

HDFC Bank FPI trade: RBI, Sebi to tighten norms on trigger point

Sebi and the RBI are looking at tightening trigger points for foreign portfolio investment Posted: Wed 22nd of February, 2017

Markets

Non-fumigated wheat threat looms large

Consignments with false certificates could make their way to Indian shores, posing health risks Posted: Sat 25th of February, 2017

Corrugated box makers hit by input price and supply issues

Corrugated box makers face stiff competition from plastics packaging Posted: Sat 25th of February, 2017

India gold hits 4-month high on firm global cues

Traders say, in India the cash crunch forcing retail consumers to trim purchases Posted: Sat 25th of February, 2017

Gold buyers eye Trump's economic policy before taking positions

Globally, the metal has been a safe haven so far, due to Brexit, weaker Euro & rising crude prices Posted: Sat 25th of February, 2017

Stage set for gold spot exchange

Sebi may regulate it under powers for investors' protection Posted: Fri 24th of February, 2017

Radio City FM operator's Rs 400-cr IPO to open on March 6

Radio City, has a pan-India presence with radio stations in 37 cities Posted: Fri 24th of February, 2017

2 SME IPOs to hit capital markets next week

This is in addition to five SMEs that have already hit the capital markets this month Posted: Fri 24th of February, 2017

Avenue Supermarts to launch Rs 1,870 cr IPO on March 8

The IPO would be the country's biggest since PNB Housing Finance raised Rs 3,000 crore Posted: Fri 24th of February, 2017

Tariff barriers keep India out of Chinese sesame, groundnut markets

Despite effort, India hasn't succeeded in making an inroad into Chinese sesame seed and groundnut markets, due to a tariff barrier.Exporters have asked the ministry of commerce and industry for reviewing the Asia Pacific Trade Agreement, formerly the Bangkok Agreement, of which India and China are members. Signed originally in 1975, it is a preferential tariff arrangement that aims at promoting intra-regional trade. Bangladesh, Korea and Sri Lanka are also signatories.China has levied a nine per cent duty on import of sesame seed from India, the world's largest exporter of the product; China is the biggest importer. This has made the Indian export uncompetitive. In contrast, import from a number of African countries have no duty levied. "The issue was raised several times in the past with the Chinese government but there has been no progress," says Sanjiv Sawla, chairman of the Indian Oilseeds and Produce Export Promotion Council. China imports 800,000 tonnes annually; only two per ... Posted: Fri 24th of February, 2017

Nearly 40% of equity AUM concentrated in 20 schemes

The domestic mutual fund sector boasts of more than 500 schemes Posted: Fri 24th of February, 2017

Deutsche Bank bullish on MFs' investments

Says these could, by current trends, pip FIIs' flow in domestic markets Posted: Fri 24th of February, 2017

Strong earnings growth to fuel Cholamandalam

Cholamandalam Investment and Finance Company (Cholamandalam)'s focus on the niche segment of light commercial vehicles or LCV lending has made it stand out among peers, and led to a 58 per cent rise in the share price in the past one year. Focus on big-ticket fleet operators as well as first mover advantage in this segment have aided its growth, profitability as well as asset quality. In fact, at 3.8 per cent, the company's gross non-performing assets (NPA) ratio is amongst the lowest in the NBFC space. Though not strictly comparable, other NBFCs operating in the vehicle finance space have higher gross NPA ratio of 6-11 per cent. Given its higher exposure to the riskier segment of loan against property (LAP) or home equity as the company calls it, low asset quality ratios are a key positive. Cholamandalam's home equity segment (29 per cent of assets under management) has grown at a healthy clip in recent times and enabled it to diversify its lending portfolio. However, disbursements .. Posted: Fri 24th of February, 2017

Tata Communications: An outlier in telecom space

In a sector wracked with volatility and stock price spikes, Tata Communications has been one of the few telecom stocks which has seen a secular uptrend in prices over the last one year. While business to consumer sector (B2C) peers have posted December quarter results which reflect multi-year operational lows, Tata Communications (B2B model) has stood out. Robust growth in data services segment (revenues up 11 per cent, operating profit up 20 per cent year-on-year) helped the company post adjusted consolidated revenues and operating profit ahead of estimates.Going ahead, strong traction in data, cost cutting efforts and expansion in growth drivers (digital-internet of things) should help boost revenues. Free cash flows for the nine months ended FY17 stood at Rs 460 crore as against Rs 290 crore in the year ago period. This should improve, according to analysts at Emkay Global Financial Services. "Data segment is expected to deliver healthy performance going forward with margin ... Posted: Fri 24th of February, 2017

Clarity still eludes PoEM coverage

Despite the final guidelines from the Central Board of Direct Taxes (CBDT) last month to determine the Place of Effective Management (PoEM) of a company, a few issues remain. The concept of PoEM is an internationally recognised test used to determine a foreign company's residential status. Until April 1, 2016, a subsidiary of an Indian company or the parent of an Indian company was not subject to income tax in India unless its affairs were 'wholly controlled and managed' in India. So, a tax incidence would not arise in India, unless the entire decision-making team was in India. Now if a company's PoEM is India, its global income will be taxable in the country. The recent CBDT guidelines emphasize PoEM is to be determined on a factual and yearly basis. For those having an "Active Business Outside India" (ABOI) or operations outside India, it will be assumed that the foreign company does not have a PoEM in India, if the majority of the board meetings are held outside India, with an ... Posted: Fri 24th of February, 2017

Gold hits 14-week high as 'Trumpflation trade' fades

US gold futures rose 0.24 per cent to $1,254.40 Posted: Fri 24th of February, 2017

MFs likely to be the most dominant investor by 2020: Deutsche Bank

Mutual funds (MFs) could emerge as the biggest investors in domestic markets, says Deutsche Bank.It says domestic investors' flow into equities-mostly through MFs-could average Rs 140,000 crore ($20 billion) a year from 2018 to 2020. At their peak (between 2012 and 2014), foreign institutional investors (FIIs) invested an average of $20 bn a year in domestic equities. If the improvement seen in financial savings and equity preference continue, MFs' investments into equities could be higher than peak FII investments in the next few calendar years, say their analysts.At present, financial assets are around 40 per cent of household savings; equities account for less than eight per cent of financial assets. This is a considerable change from 2012, when financial assets were 32 per cent of household savings, while around one per cent of financial savings went into equities."The architecture of financial savings of Indian households is undergoing a structural shift," say Deutsche Bank ... Posted: Fri 24th of February, 2017

India's steel exports register three-fold increase in January

Exports in January, 2017 (0.889 mt) was up 224 per cent over January 2016 Posted: Fri 24th of February, 2017

Weekly roundup: Stock specific moves push Sensex up for 5th straight week

The market ended postive thanks to a smart rally in TCS, HDFC Bank, Axis Bank and RIL Posted: Fri 24th of February, 2017

Fund raising via QIPs down 76% to Rs 4,627 cr in 2016

In comparison, companies had mopped up Rs 19,006 cr in 2015 Posted: Fri 24th of February, 2017

Airtel- Telenor to RCom-Aircel: Mergers may wipe off 10-15% jobs in telecom

The spate of consolidation in telecom sector could lead to job redundancies over the next two years Posted: Fri 24th of February, 2017

Stocks

Tata Motors down 10% on downgrades, investors worry over JLR profit margins

Muted JLR outlook on currency-hedging losses, operational weakness activates thumbs-down Posted: Thu 16th of February, 2017

Concor: Demand is a constraining factor

Better operating performance helped the company post net profit of Rs 186 cr, which beat estimates Posted: Tue 14th of February, 2017

NMDC misses profit expectations

Profit growth may seem muted, but it was ahead of estimates if one-off transactions are excluded Posted: Tue 14th of February, 2017

Rising regulations to keep a lid on liquor stocks

Sale ban on highways to have short-term impact; likely sin tax in GST and note ban key overhangs Posted: Thu 15th of December, 2016

Dabba trading in stocks and commodities seizes up

In a late night conference call involving Mumbai, Ahmedabad, Jaipur and Delhi based large dabba traders Posted: Wed 9th of November, 2016