Newbies in stock market, modern warfare, space hotel and other news
Business news and insights to jump start your day
“I have learned over the years that when one’s mind is made up, this diminishes fear. ”
- Rosa Parks
Good morning! 😀
In today’s edition, we take a look at:
First-time investors piling into the market
Modern warfare
How much wealth you need to be in the top 1%
Let’s get started…
📈 How did the markets fare
BSE Sensex - 51,025.48 | +1.16% ⬆
NSE Nifty - 15,098.40 | +0.95% ⬆
10-Yr Bond Yield - 6.206% | -0.017 ⬇
S&P 500 - 3,875.44 | +1.42% ⬆
USD/INR - ₹ 72.92 | -0.45% ⬇
Even as benchmark indices scale new records after the Union Budget, equity mutual funds witnessed the biggest outflow in three months as investors pulled out a net Rs 10,468 crore from equity and equity-linked mutual fund schemes in February.
📰 What's happening around us
Markets
When it comes to equity investing, India is one of the most under-penetrated large economies in the world with just 2-3% of the population investing in stocks. But over the past year, equity penetration has been increasing at a record rate.
Since the Covid-induced lockdowns, many first-time investors have been piling into the market. The young salaried class needed somewhere to put their money as their expenses had reduced significantly, and with returns on fixed deposits and other debt securities not looking enticing, they turned to equities. It was also helped by people working from home having more time to follow the markets and the rise of discount broking apps such as Zerodha and Paytm Money who make it possible to open trading accounts from the comfort of your home.
According to market regulator SEBI, a record 10.7 million dematerialised or demat accounts have been opened between April 2020 and January 2021, which is more than double the 4.7 million new accounts opened during the whole of FY20. A demat account is where stocks and bonds bought by an investor are held in digital format.
This increased investor participation is being reflected in the markets as well with the average daily equity cash market volume soaring to a record Rs 88,260 crore in February, more than double FY20 levels.
So far, it is likely to have been a very rewarding experience for the newcomers with the benchmark equity index Sensex surging 73% so far this financial year. We just have a few words for the equity market rally – 🖖🏽 “live long and prosper”.
International
As world economies evolve, the methods of modern warfare are evolving with it. Physical confrontations between countries have reduced over the past few decades, but more sophisticated forms of attack such as economic sanctions and hacking campaigns have been rising.
An attack on Microsoft’s popular Exchange email software last week affected tens of thousands, including businesses and government agencies and is morphing into a global cybersecurity crisis. Microsoft, which is scrambling to fix the issue, has blamed it on a Chinese government-backed hacking group.
It comes just months after suspected Russian hackers breached nine U.S. federal agencies and many private companies through tampered updates from IT management software maker SolarWinds.
There have been many such high-profile hacking campaigns targeted at U.S. over the past few years and according to a New York Times report, Washington is preparing a series of retaliatory clandestine actions against Russian networks along with economic sanctions, to send President Putin a message.
As economies become increasingly digital, the frequency and severity of these attacks can be expected to increase. You might want to look out for good cybersecurity stocks to take advantage 😜.
Wealth
How much money do you need to join the top 1%? Knight Frank, one of the world’s largest real estate consultancies, recently released the Wealth Report 2021 which throws light on the change in fortunes of the UHNWIs (Ultra High Net Worth Individuals - individuals with a net worth of $30 million or more), spending and investing patterns, and attitudinal shifts expected in the year 2021.
One thing the report highlights is the growing divide between the super-rich and the rest of the population. Wealth inequality has become starker as a result of the global pandemic and is now viewed by many as the greatest single risk to future wealth accumulation, with public support growing for wealth taxes.
So how much wealth do you need to be in the top 1%? It varies considerably between countries and people would need the deepest pockets in Monaco, as the entry point to the community of its top 1% is $7.9 million. In Switzerland, $5.5 million is required to gain access to its wealthiest circle. The United States, home to the world's largest UHNWI population, sits at number three with $4.4 million needed to join the exclusive club.
When compared to the rest of the world, the threshold is substantially lower in India with just $60,0000 or ~Rs 44 lakh needed to make it to the top 1% (that figure seems a bit too low to us). However, as per forecasts, India’s threshold is set to double in the next five years.
🎯 News Bites
India is strengthening its drone arsenal. To counter threats from neighbours, India is planning to spend $3 billion to buy 30 armed drones (MQ-9B Predator) from the US. India’s existing drones can only be used for surveillance and reconnaissance.
The massive disruption of SMS services that ensued after the implementation of the new system to check spam messages, has prompted TRAI (Telecom Regulatory Authority of India) to temporarily suspend its implementation.
With elections coming up in many states, it seems like the government has informally conveyed to the three major oil-marketing companies (OMCs) to not revise fuel prices for the time being. Government-controlled OMCs have held back petrol and diesel price revisions for a week and are expected to continue doing so as per a BS report.
Swedish carmaker Volvo is charging up to electrify the Indian auto market. The launch of all-electric Volvo XC40 Recharge later this year will kick start Volvo India’s ambitious plans to have 80% of its India sales come from all-electric vehicles by 2025.
How about a vacay in space? The first-ever ‘space hotel' called Voyager Station is set to open to the public in 2027. Reservations have started and a three-day stay will cost around $5 million.
That's it from us. Have a productive day!
P.S - We are off tomorrow on account of Maha Shivratri. We‘ll be back on Friday.