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India’s fiscal deficit widens, slowing government expenditure remains a concern

The Centre’s fiscal deficit for April-November 2020 soared to Rs 10.76 lakh crore, or 135 percent of the full year budgeted target of Rs 7.96 lakh crore, as the government’s finances continued to be stretched due to lower revenues arising from the COVID-19 pandemic and the economic slowdown.

What is noticeable, however, is that while expenditure in November shot up to be the highest in five months, overall consolidated spending levels are much below what analysts expect in a year when there has been clamour for increased public spending.

Total expenditure for the first eight months of the current fiscal year was Rs 19.06 lakh crore or 62 percent of the budget size of Rs 30 lakh crore. This compares to 65.3 percent for the same period last year, when total expenditure for April-November 2019 was Rs 18.20 lakh crore versus a budget size of Rs 27.9 lakh crore.

While the Centre has increased its capital and revenue spending commitments as part of the Aatmanirbhar Bharat and Gareeb Kalyan announcements, it is clear that some expenditure rationalization is taking place as well.

“This year, they have more justification than ever to ramp up public expenditure. They can take the fiscal deficit to 10 per cent of GDP, owing to higher deficit and lower GDP, and it would be perfectly understandable. However, the Centre is not spending as much as it should,” said an independent economist. The person did not wish to be named as he currently advises the government on a number of matters.

“While capex growth has improved to an encouraging 13 percent, revenue expenditure growth has been curtailed to 4 per cent in April-November 2020. The continuing considerable 17 percent decline in revenue receipts coupled with the subdued disinvestment receipts has engendered the massive fiscal deficit in FY20 so far,” said Aditi Nayar, Principal Economist with ICRA Ltd.

“The month of November saw a sharp and encouraging ramping up of the Government of India’s spending, with the monthly outgo recording a year-on-year expansion of 32 per cent for revenue expenditure and nearly 250 per cent on a small base for capital expenditure. A sustenance of this trend will bolster economic activity, and help the Indian economy exit the recession in the coming quarter,” she said.

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A secret RBI team is fighting a parallel war against Covid-19

According to a Business Standard report, the team, of about 150 people and from critical RBI wings like debt, reserve management, is part of the central bank’s business continuity plan to ensure Covid causes minimum disruption to the financial system.

The team, the report added, has been on it since March 19. This, according to another Mint report, is first such measure undertaken by the Central bank that will ensure that key information technology (IT) services for the delivery of digital banking.

The team, the report added, has been on it since March 19. This, according to another Mint report, is first such measure undertaken by the Central bank that will ensure that key information technology (IT) services for the delivery of digital banking, treasury services and cheque clearance are not disrupted by the outbreak, and also ensure the smooth running of RBI functions from secured data centres as nearly 14,000 staffers, except senior-most management, reportedly work from home

The BS report claims the team has been split into two. While one runs the checks, the other is on standby.

The central bank has hired a hotel in the vicinity of the primary data centre to accommodate the team, the Business Standard reported. Support staff of the hotel, comprising maintenance, security, kitchen, front desk, and administration, have also been isolated.

India’s central bank on Friday walked the talk on doing whatever it takes to contain the economic impact of Covid-19 by injecting more liquidity just days after Governor Shaktikanta Das cemented Mint Road’s credentials as a responsive regulator, assuring the man on the street about the safety of his savings at Yes Bank.

“On a review of the current liquidity and financial conditions, the RBI has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 30,000 crore in two tranches,” the central bank said.

Later, RBI conducted a dollar-swap auction for $2 billion where it injected dollar liquidity. Similar operations will be conducted next Monday.

The RBI has taken a different approach from other central banks, including the Federal Reserve and the Bank of England, which slashed interest rates. The RBI on the other hand has been pushing liquidity to ensure that the interbank market doesn’t freeze and that banks are in a comfortable position.

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Zerodha Review

Zerodha – Brokerage Charges, Trading Platforms, Pros and Cons

Zerodha has recently become the largest stock broker of India overtaking ICICI Direct. They are the first broker to introduce discount broking concept in India.

They have charge Zero brokerage for equity delivery and direct mutual fund investment. For all other segments like equity intraday, Futures and Options, Currency and Commodities, the brokerage is flat Rs20/trade in NSE, BSE and MCX stock exchanges.

In this Zerodha review, let us have more information about offerings from Zerodha, their account opening charges, trading platforms. We will also see what are the advantages and disadvantages of Zerodha broker.

Background of Zerodha

Zerodha was started as start up in year 2010 by Mr. Nithin Kamath in Bengaluru.

There are mainly two types of stock brokers operating in India, Full service and discount brokers.

Full service brokers charge higher brokerage charges but also provide wide range of service along with advisory (market tips).

Discount brokers does not provide or publish any research report. They dont have any advisory team itself. They have less branches. Because of this they are able to reduce the brokerage charges.

Without doubt, Zerodha has become best discount stock broker in India with more than 1.5million+ customer base. Their share in total traded volume across stock exchanges is more than 10%.

They also awarded with some of the prestigious awards like

  • National Stock Exchange (NSE) “Retail brokerage of the year 2019” (& 2018)
  • Outlook Money “Retail broker of the year 2017”
  • Ernst & Young “Entrepreneur of the year (Startup) 2017”

Zerodha Account Opening and AMC Charges:

Zerodha, like all other brokers has separate account opening charges for Equity and Commodity segments. Here are the account opening charges of Zerodha,

  • Equity Trading and Demat account : Rs 200
  • Commodity Account : Rs 100
  • Demat Account Maintenance Charges (AMC) : Rs 300 per year

Zerodha Review : Brokerage Charges

As mentioned previously, all the investment based transactions are absolutely free.

Here are the Zerodha brokerage charges,

As you you can see, the maximum fee pay is capped at Rs20.

It is not the case with full service brokers who charge brokerage based on certain percentage (usually 0.03% to 0.1% for delivery) of total traded value.

So for example, if you trade Rs10 lakh worth of shares intraday, with 0.05% brokerage, brokerage for buy is Rs500 and again Rs500 for sell side.

But with Zerodha, total brokerage for buy and sell is Rs40. In this way, traders can save lot on brokerage by switching to discount brokers like Zerodha.

Zerodha Trading Platforms

When they started Zerodha, they offered third party trading platforms like NEST and NSE Mobile to their customers.

Later on they invested developing their own trading platform which are built completely in house. These platforms enhanced reputation of Zerodha as technological power house.

Because the tools are developed inhouse, they could add many useful features which were not present in third party tools. Hence, the competitors of Zerodha who still use these tools lagged behind.


KITE is a modern technology-based trading platform with streaming market data, advanced charts, an elegant UI, and more. It is a minimalistic, intuitive, responsive, light, yet powerful web and mobile trading application.

The bandwidth consumption of KITE is less than 0.5 Kbps for a full market watch. It also offers extensive charting with over 100 indicators and 6 chart types, advanced order types like Brackets and cover, millisecond order placements, and more

KITE Mobile

One can trade on the go with Kite mobile.The flagship trading platform Kite Web as an Android app is clean & intuitive UI, super fast and super light back-end for all investment and trading needs.

Pros and Cons of Zerodha

As with any other brokers Zerodha also has some advantages and disadvantages.

Cons of Zerodha demat account

  • No research reports and recomendations
  • Call and Trade is chargable at Rs20
  • 3-in-1 demat account is feasible but one need to have/open savings account with IDFC First Bank

Pros of Zerodha demat account

  • Zero brokerage charge on all investments including mutual funds
  • No advance brokerage requirement or turnover commitment
  • Both new comers and High Net Worth Individuals (HNIs) are treated identically with same brokerage plan for everyone
  • Easy to understand brokerage plan with Rs 20 across all segment except delivery
  • Z-Connect blog to reach out to management
  • Huge brand value as technology innovator.

Other Zerodha Products

  1. Zerodha Varsity : As Zerodha does not conduct any workshop like other full service brokers, they made up this gap by designing a online education platform. It contains many modules on technical analysis, fundamental analysis, risk management and trading psychology in simple to understand language. It is free for everyone including non customers.
  2. Trading Q&A : It is a online forum for people to ask questions and get answers from others and also from Zerodha team.

Other Third Party Products

They also offer some third party products which are called partner products and integrated with Zerodha account.

  1. Sensibull : Basically a Options trading platform which provides powerful trading tools. Sensibull aims to make options trading safe, accessible, and most importantly, profitable for all
  2. Smallcase : smallcases are modern investment products that help you build a low-cost, long-term & diversified portfolio easily. Created by professionals, each smallcase is a ready-made basket of stocks/ETFs that reflects a theme, strategy or objective

Final thoughts on Zerodha Review

Zerodha has grown leaps and bounds in very short amount of time. Indian customer accepted their services even there were minor hiccups.

From start up to to a reputed and well established company was not possible without good service and products.

And more over traders can save ton on brokerage because of the reduced brokerage. So you can consider Zerodha if you are looking for broker with good ratings.

We hope this Zerodha review helped in understand more about Zerodha and make up you mind to open or not open account with them. Please let us know your queries through comments if you need further information.

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