WEEKLY FINANCIAL SNIPPETS- 07/05/2016
1. Government drops capital gains tax on start-up shares held for 2 years: Currently there is no capital gains tax on listed company shares if those stocks are held for 12 months, however the shares of unlisted companies face capital gains tax of 20% even after 3 years. Government inserted an amendment to the finance bill to provide for capital gains exemption if shares of unlisted company were held for a period 2 years. This will be a very good boost to the new start-ups.
2. RBI to open permanent window for new bank licences : RBI will open a permanent window for accepting applications to start up a full-fledged bank. There are two major changes here. Corporates have been kept out and individual promoters have been allowed. It is also not necessary for individuals to float a non-operating holding company, which was mandatory earlier. While corporates cannot promote banks, they are allowed to invest up to 10% in a new bank. This will make way for many new players trying to enter in to banking business and create lot of difficulty in sustaining business for existing Banks.
3. The valuation for E-Commerce business started bleeding: With two more prominent investors pruning down their share in Flipkart, it is apparent that E-Commerce business particularly E-Retail business has started to show a downward trend.
4. Government may offer bluechip PSU shares to FIIs and domestic buyers: The Finance Ministry is considering the option of Institutional Placement Programme ( IPP) route to dilute the stake in bluechip PSUs. This is in response to the lukewarm response it got from retail investors.
5. World’s first Diamond trading Exchange is incorporated in India: The Singapore Diamond Investment Exchange ( SDiX) World’s first and only commodity exchange trading in physically settled diamonds, has started its operation in India from 05 th May 2016. At present trading is done after viewing diamonds and usually one on one basis. Once the exchange picks up, it will be portal based and with transparent pricing. This would also bring in investors in diamond trading.
6. RBI starts meeting major players in P2P lending: After releasing a consultation paper on peer-to- peer ( P2P) lending, RBI has now started meeting leading P2P players for preparing final guidelines for P2P lending platforms .
7. As per World Bank release the remittances to India by overseas Indians has decreased for the first time since 2009. This has resulted in a low growth of NRE Funds in Banks across India.
8. Bank credit registers growth of 9.7% in December quarter: RBI says that this growth is largely due to higher credit growth by private sector Banks.