Ø While the actual form is unclear, it may either amount to increasing LTCG to 3 years or higher tax rate on STCG

Ø This move is likely to constrict demand for equities as equities attracted favour due to its favourable LTCG status

Ø The impact of demonetization will actually be visible in the Q3 and Q4 numbers in terms of business slowdown

Ø Higher oil prices (up by 20% in December) will also reduce the profitability of industries using oil as a key input

Ø Banking Cash Transactions Tax (BCTT) is imposed on cash transactions at a bank

Ø This is the logical next step by the government to track black money after the demonetization and IDS drive

Ø In a virtual repeat of November, FIIs pulled out over $5.5 billion from equity and debt in December 2016

Ø The pullout by FIIs became acute after Trump’s victory and Fed hawkishness. Domestics have been aggressive buyers

Ø Saudi Aramco is the world’s largest oil company and could be worth nearly 1 trillion dollars

Ø Current valuations are weak due to cheap oil and hence the Saudi government will be phasing out the sale

Ø In a legal notice, Tata Sons has given Cyrus Mistry 2 days time to return all sensitive material pertaining to the Tata group

Ø The Tata group has accused Mistry of making classified data public endangering the company’s competitiveness

Ø This is sharply lower than the $3.16 billion raised in November 2015 through the foreign borrowing route

Ø The good news is that Rupee Denominated Bonds (RDBs) with no currency risk accounted for 40% of these borrowings

Ø Benami properties are purchased in third party names and are a popular means of laundering black money in India

Ø After putting constraints on cash, the next step is to track down benami properties, though it is practically difficult

Ø Lower tax rates will, according to FM, help India to expand its tax base substantially and improve compliance

Ø The reduction of tax rates is also seen as a compensation for the pain people went through in demonetization

Ø The Financial Stability Report (FSR) projects the Gross NPAs of PSU banks to touch 12% by March 2018

Ø According to the RBI, this could constrain lending, liquidity management and profitability of these banks further

Ø JSPL’s loan of Rs.7125 crore will be recast up to a maximum of 25 years, with a rest and review every 5 years

Ø SBI is the biggest lender in the consortium and steel continues to be the biggest strain on banking NPAs

Ø With the Fed rate hike importers and banks wanted to hedge themselves against further appreciation of the US$

Ø Global brokerage houses expect the INR touch 72.5/$ by end of the year as the Fed turns increasingly hawkish

Ø This will extinguish the liability of the RBI to the extent of the notes not yet surrendered by people

Ø The RBI will be able to pay out this entire amount (estimated at Rs.200,000 crore) to government as dividend

Ø Dr. Viral Acharya has worked closely with Dr. Rajan and has co-authored the paper on sovereign bonds

Ø Dr. Acharya is an avid votary of the “Bad Bank” strategy, something Dr. Rajan was opposed to.

Ø The IPO will be an offer for sale (OFS), where existing owners will be giving an exit route

Ø NSE recently saw Chitra resigning from the CEO’s post and Deloitte has raised red flags about their broker preferences

Ø Post Dec 30^th, old notes cannot be deposited at banks but only at the stipulated RBI counter

Ø Banks are already demanding extension of cash restrictions as the liquidity situation is yet to improve in the banks

Ø This is substantially better than the consensus market expectation of (-1.7%) for Japan

Ø The big industrial push has come from an export thrust to the US and China on the back of a weak Yen versus the US$

Ø This could bring about interesting changes to the political equations in UP ahead of the 2017 state elections

Ø UP remains critical for the ruling BJP as they will be looking to a good performance after losing Bihar and Delhi

Ø This Direct Tax Settlement Scheme (DTSS) was offered to companies like Cairn and Vodafone regards their tax disputes

Ø The idea was not just to resolve pending cases but also unlock the billions that are locked up in disputes.

Ø According to the FSR, these will be the two big risks for the Indian banks, especially PSU banks

Ø Although demonetization ends on Dec 30^th, the impact is likely to survive for a few more months

Ø The curbs on cash have literally made cash transactions in real estate impossible, impact demand steeply

Ø With the proposed controls on benami transactions, the real estate market could be in for tough times.