Business News

A broad advance in industrial metals took domestic copper prices to record levels last week. A firm overseas market due to fresh Chinese stimulus measures, concerns over tightness in global mine supply, and hopes of strong green demand boosted prices. In the key domestic MCX futures, prices of copper are hovering near Rs 900 a kg, gaining more than 23 percent so far this year. A similar rally was witnessed in the international markets with LME futures breaking above $10,000 per tonne for the first time in two years. To stimulate its sluggish economy, the Chinese government announced plans to raise 1 trillion yuan through a long-awaited bond issue. This stimulus package is primarily focused on the key sectors of the Chinese economy. The bonds will be utilized to support infrastructure developments which contribute to the country’s economic growth. This has raised expectations of increased demand for industrial metals. Copper is a critical energy transition metal to the global rollout of clean energy, and there are expectations that the copper demand will be doubled over the next decade. However, speculations are high that the world’s mines will struggle to meet the upcoming demand. Traders are optimistic that millions of tonnes of new supply would be needed in coming years in areas like electric vehicles, renewable energy, and vastly expanded power grids. Meanwhile, some reports suggest copper supplies are expected to start declining soon. As against their earlier forecast of a narrow deficit of refined copper for 2024, Goldman Sachs now sees the shortfall ballooning to more than half a million tonnes. Few other agencies also predict a major deficit in the copper market next year.A resurging manufacturing activity in the key consumers like the US and China also aided the prices. The US manufacturing activity expanded in March for the first time after contracting for 16 months. China’s manufacturing data also showed a positive trend with the key PMI numbers rising to 51.1 in March, posting a fifth straight month of growth. A turnaround in manufacturing activity indicates a revival in demand for industrial commodities like copper. Banning of Russian base metals in the US and UK futures platform added concerns over supply threat. Recently, the London-based LME and the US Chicago Mercantile Exchange announced that they would no longer trade in new copper, aluminium, and nickel produced by Russia. Despite a bullish long-term outlook, the prolonged crisis in the Chinese property market and a moderate global growth outlook are likely to affect the short-term prospects of the metal. In addition, seasonally elevated levels of inventories during the peak demand season and near-record output levels in China will perhaps disappoint the metal soon. The new tariffs imposed by the US on goods imported from China and uncertainty over US rate cuts may also create near-term volatility in prices. At the same time, LME copper has a stiff resistance at $10600 a tonne, which if cleared would continue the bullish waves. Downside reversal is seen only a close below $8000. In the domestic market, Rs 900 per kg may act as a psychological resistance and may see a mild correction. Anyhow, major corrections are unlikely unless any key changes in its fundamentals. (The author, Hareesh V, is Head of Commodities, Geojit Financial Services)

State-owned Bank of Maharashtra recorded the highest growth rate last fiscal in terms of total business and deposit mobilisation among public sector lenders at a time when most banks are facing difficulty in achieving double-digit growth. The Pune-headquartered lender has registered a 15.94 per cent rise in the total business (domestic) in FY24, followed by the country's largest lender State Bank of India (SBI) with 13.12 per cent growth, according to published financial numbers of the public sector banks (PSBs). However, SBI's total business (deposit and advances) was about 16.7 times higher at Rs 79,52,784 crore compared to Rs 4,74,411 crore of Bank of Maharashtra (BoM) in absolute terms. Similarly, BoM continued to maintain its top spot in terms of growth in deposit mobilisation, with a 15.66 per cent rise in FY24. It was followed by SBI (11.07 per cent), Bank of India (11.05 per cent) and Canara Bank (10.98 per cent). Out of 12 public sector banks, only these four lenders could log a double-digit growth in deposits in the financial year 2023-24. In terms of low-cost CASA deposits, the Bank of Maharashtra continued to top the chart with 52.73 per cent growth, followed by the Central Bank of India with a 50.02 per cent rise at the end of March 2024. A higher level of current account and savings accounts helps banks to keep their cost of funds low. With regard to loan growth, the Kolkata-based UCO Bank was a tad higher at 16.38 per cent, followed by BoM at 16.30 per cent. SBI also reported 16.26 per cent growth in advances in FY24. Loan growth of remaining public sector banks was lower than 16 per cent during the fiscal. On the asset quality side, the Bank of Maharashtra and SBI reported the lowest gross non-performing assets with 1.88 per cent and 2.24 per cent, respectively, as of March 31, 2024. In terms of net NPAs, BoM and Indian Bank reported the lowest numbers, with 0.2 per cent and 0.43 per cent, respectively. In terms of capital adequacy ratio, the Bank of Maharashtra was leading PSBs at 17.38 per cent, followed by Indian Overseas Bank at 17.28 per cent and Punjab & Sind Bank at 17.16 at the end of FY24.

Margin Trading Facility is an exchange approved product. It's a safe and secure product that lets investors purchase more stocks with the limited capital. It involves borrowing money from a brokerage to purchase stocks and repaying the capital with interest later. This method is often referred to as leverage trading, amplifies returns but carries risks associated with market fluctuations.Increased Purchasing Power: Margin Trading Facility enables traders to increase their purchasing power. It addresses the challenge of insufficient capital by allowing investors to take larger positions with only a fraction of the trade value paid upfront. By allowing investors to borrow funds to purchase securities, opens up opportunities to engage in bigger trades than otherwise possible with their available cash alone. Margin Trading Facility improves the possibility of profits as well as empowers traders to capitalize on promising market opportunities without having to liquidate their current holdings. For example, assume you want to place a trade for Rs 30 lakh (buy 2,000 quantities of XYZ Ltd. for a share price of Rs 1,500). You will need to maintain a margin of Rs 6 lakh against broker’s 80% funding of Rs 24 lakh. Now assuming the stock moves up by 20%, your profit is a whopping Rs 6 lakh. But if you had not taken the funding, then you would have bought only 400 shares and your profit would be limited to Rs 1.20 lakh.Enhanced Flexibility: Conventional trading often requires investors to have substantial liquid funds to execute transactions. However, Margin Trading Facility provides traders the flexibility to leverage opportunities even with limited cash reserves. This adaptability empowers investors to promptly react to market movements and take advantage of short-term trends.Efficient Allocation of Capital: To hold Margin Trading Facility positions you only require up to 20% of your income, leaving a surplus of 80% of your income. With this surplus amount one can allocate this capital across various investment opportunities simultaneously, it can also provide a buffer for emergencies.Higher ROI. Lower Taxes: Margin Trading Facility helps you invest a higher amount, which increases your return on investment (ROI). Say you want to buy stocks worth Rs 1 lakh. With MTF, you will need only Rs 20,000 to take this position (the balance Rs 80,000 will be funded by the broker). Assume the stock appreciates and your position is now worth ?1.50 lakh, giving you a profit of Rs 50,000.Without MTF, you would have to shell out the entire ?1 lakh, which means your ROI would be 50%. However, with MTF, you only had to bring in Rs 20,000, so in this case, your ROI is 250%. Assuming this position was held for 60 days, then @12% interest p.a., total interest payable would be Rs 1,578. Deducting this from the ?50,000 profit, would still give you an ROI of 242%.Additionally, you can save tax too. Without MTF, you would have to pay STCG @ 30% i.e., Rs 15,000. However, with MTF, you can offset interest payable of Rs 1,578 and your STCG will be calculated on Rs 48,422 (Rs 50,000 - Rs 1,578) which comes to R 14,526.So, with MTF, you not only increase your ROI but also reduce your tax outflow.Benefit from Corporate Actions: If you own stocks under Margin Trading Facility positions and the company declares a dividend, you're eligible to receive dividend payouts, giving you an extra source of income.Cost-Efficiency: Leveraging Margin Trading Facility may present a more financially advantageous choice in comparison to other financial options like personal loans or credit lines. Margin trading commonly provides impressive interest rates, rendering it appealing for traders seeking to optimize their gains while minimizing borrowing expensesIn conclusion, Margin Trading Facility presents countless benefits to traders, including increased purchasing power, greater flexibility, diversification opportunities, and potential for higher returns. That being said, it is crucial for traders to exercise caution when engaging in margin trading and adhere diligently to risk management principles to minimize possible limitations.(The author Sunny Ahuja is Sr.Vice President- Head Products & Platform, m.Stock by Mirae Asset. Views are own)

Various widely tracked companies like ITC, ONGC, IRFC, Ircon International, BHEL, BEL, Sun Pharma, Nykaa, Tata Investment Corporation, Hindalco, Ashok Leyland, and Divi's lab will be releasing their March quarter report cards this week. Here’s a list:May 20ONGC, Indian Railway Finance Corporation (IRFC), Bharat Electronics (BEL), Oil India, SAIL, Deepak Nitrite, Whirlpool of India, City Union Bank, Redtape, Power Mech Projects, Triveni Engineering & Industries, Chemplast Sanmar, India Cements, KRBL, Nesco, Rolex Rings, VRL Logistics.May 21BHEL, NMDC, PI Industries, Hitachi Energy India, GE T&D India, Ircon International, NMDC Steel, Action Construction Equipment, Godawari Power & Ispat, Eris Lifesciences, Maharashtra Seamless, Aether Industries, JK Tyre & Industries, Sheela Foam, Gujarat State Fertilizer & Chemicals, Metropolis Healthcare, Galaxy Surfactants, Azad Engineering, RateGain Travel Technologies, Religare Enterprises, Laxmi Organic Industries, Arvind Fashions, Va Tech Wabag, Hindustan Foods, Welspun Enterprises, Tilaknagar Industries, Gulf Oil Lubricants India, Dollar Industries.May 22Sun Pharma, Grasim Industries, FSN E-Commerce Ventures (Nykaa), Petronet LNG, The New India Assurance Company, Jubilant FoodWorks, Metro Brands, Gland Pharma, Sundram Fasteners, The Ramco Cements, Garden Reach Shipbuilders & Engineers, Minda Corporation, Gujarat Pipavav Port, HEG, Star Cement, Strides Pharma Science, Avanti Feeds, Indigo Paints, NIIT Learning Systems, GMM Pfaudler, TeamLease Services, Ashoka Buildcon, DB Corp, Kaveri Seed Company, Unichem Laboratories, GE Power India, Gandhar Oil Refinery (India), Talbros Automotive Components, Everest Industries, Goldiam International, Dhanlaxmi Bank, Urja Global.May 23ITC, Page Industries, Tata Investment Corporation, Cello World, CESC, Finolex Cables, Concord Biotech, Bikaji Foods International, Honasa Consumer (Mamaearth), KPI Green Energy, Tega Industries, PCBL, JK Lakshmi Cement, Esab India, Zaggle Prepaid Ocean Services, SML Isuzu, Amrutanjan Health Care, Barbeque-Nation Hospitality, Radiant Cash Management Services, Singer India, Muthoot Capital Services.May 24Hindalco, Torrent Pharmaceuticals, Bosch, United Spirits, Ashok Leyland, Bharat Dynamics, Hindustan Copper, Glenmark Pharmaceuticals, Manappuram Finance, PNC Infratech, EID Parry, DOMS Industries, Happy Forgings, Karnataka Bank, JM Financial, Jamna Auto Industries, IKIO Lighting, TTK Healthcare, Orient Green Power Company, Coffee Day Enterprises, Max India, Excel Industries.May 25Divi's Laboratories, Inox Wind, Sarda Energy & Minerals, WPIL, Vishnu Chemicals, Indo Borax & Chemicals, Sahyadri Industries, Rudra Global Infra Products, Mawana Sugars.

This week Finance Minister Nirmala Sitharaman was addressing brokers in BSE. She appealed to the exchanges to maintain stability and mitigate systemic risk to protect the retail investor. The regulators have done a fantastic job of protecting the investors. But the onus shouldn’t be theirs alone. As a responsible individual, you too must do a few things to protect yourselves. I have already shared a few articles on how you can succeed as a trader here, here, and here. Today, I am going to talk about one of the most underrated risk mitigation technique - trading journal. The trading journal is an indispensable way to enhance one’s trading skills. It helps you systematically record all trades, which helps you identify your strengths and weaknesses, analyze trades, and create a strategy that will make you profitable. For every professional trader, a trading notebook is an essential tool that provides an organized method for evaluating and enhancing trading performance.Here are some key advantages of maintaining a trading journal.It gives a complete pictureMaintaining a trading journal gives you a complete view of your performance by recording entries, exits, and positional sizing. With the comprehensive view, you can thoroughly examine your trading practices and tactics, making sure no aspect is missed.It helps plan and execute your trades easilyTrading journal help you to plan your trades by writing down predetermined entry and exit points. This planning lowers the possibility of mistakes by ensuring that every trade is carried out by a well-considered strategy.It helps identify what works and what doesn’tExamining past trades helps to understand what works and what doesn’t in the market. Identify your winning strategy pattern and try to improve it by using various possible ways. This continuous feedback loop is essential to improving overall performance and your trading strategies.It helps keep your emotions in checkA crucial component of successful trading is emotional restraint. A trading journal will help you to identify your emotional triggers that cause an impulse action. It gives an opportunity to overcome your triggers and making logical trading decisions facilitated by emotional control. It helps you develop a systemDeveloping a robust trading system is necessary to survive and become profitable in trading. You can create a customized trading system as per your strengths and preferences with the aid of a data-driven approach. Now you must have understood why maintaining a trading journal is necessary, I will give you a step-by-step guide to making a trading journal. Determine your trade in advanceFailing to plan is planning to fail. So, before entering into any trade it is essential to have a predetermined plan. Your trading strategy should have fixed entry and exit criteria, along with risk management guidelines, and profit targets. A well-thought-out plan acts as a road map, guiding you through the market's ups and downs. Record trade detailsAfter executing the trade, one must record the date and time, entry and exit, positional size and stop loss (to keep a track of the risk you are willing to take), trade rationale, and outcome of the trade in a trading journal. This detailed record serves as the raw data for analyzing your trading performance in future. It lets you spot trends, track progress, and gradually improve your tactics.Note down your emotional and psychological factors while tradingIt is essential to record your emotional and psychological behavior during every trade. Note your feelings (e.g. greed, fear, anxiety, confidence) and the factors that influenced your mindset (e.g., market volatility, personal stress). Understanding your emotions while trading helps in identifying triggers that lead to impulsive or irrational decisions. Upon identification of the patterns, one can find his/her way to overcome them. Consistent Analysis for Continuous Improvement Frequent evaluations offer a methodical means of evaluating your performance. Continuous improvement requires reviewing your trading journal regularly. Every week, every two weeks, or every month, set aside time just to review your trades. Identify the pattern in your successful and unsuccessful trades. Evaluate the trades on the basis of risk reward, and win ratio, and compare yourself if you are beating the index or not. Identify effective techniques and improve them. Improve Performance Based on Past DataThe objective of keeping a trading journal is to leverage the information gathered to enhance performance going forward. Use the past data to identify different strategies that work in different market conditions. You can improve the consistency and profitability of your trading methods by methodically implementing these ideas.If you start preparing a trading journal then I can assure you that your trading performance will improve. You will reduce your risk and improve your probability of success in markets and launch you on a journey to ace the index.