LIVE INTERACTION WITH DR DUVVURI SUBBARAO, FOLLOWING HIS TALK ON: WHO MOVED MY INTEREST RATE?, 26th Aug 7PM

Livestream registration here.

LIVE INTERACTION WITH DR DUVVURI SUBBARAO, FOLLOWING HIS TALK ON: WHO MOVED MY INTEREST RATE?

CFA Society India invites you to a talk by Dr. Duvvuri Subbarao, former governor of the Reserve Bank of India, based on his just published book Who Moved My Interest Rate? The talk will be followed by an interactive Q&A session.

The opportunity to listen to insightful macroeconomic view points and to directly interact with one of India’s most prominent banking regulators is unprecedented. This talk also comes at a critical juncture as global financial markets increasingly find themselves in an uncharted territory of weak global economic growth, negative yields and difficult to reverse, accommodative monetary policies.

How do the world’s leading central banks, including the RBI and the people who lead these institutions, navigate through such uncertain times? Dr. Subbarao offers an insider’s viewpoint to the workings of India’s central bank as well as the dynamics of collaboration among the world’s central bankers.

Please join us for a thought provoking session from one of India’s topmost economic thinkers and leaders.

Livestream registration here.

EVENT DETAILS

Date: Friday, 26 August 2016

Time: 7.00 p.m. – 8.00 p.m. (India Time). Dr Subbarao’s talk followed by Q&A (livestream)

FIX India Conference 2016 – Complimentary Pass, 1st Sept, ITC Parel, Mumbai

Register now for a complimentary pass

If you are unable to see this email, please go to http://www.fix-events.com/India/email_AI.html

Entering its 8th year, the FIX Trading Community™ India FIX Conference is the leading electronic trading event in India where industry peers come together to discuss the most pressing issues in the trading world. The conference also act as a catalyst for industry action and dialogue to help solving industry challenges as well as highlights the latest trends such as Blockchain, Microsecond trading etc. This electronic trading conference is designed for both traders and technologists trading equities and derivatives in India and offshore markets. This industry conference will continue to be free of charge to FIX Trading Community members (with limitations on the number of registrations per member firm) and buy-side participants.
Topics to be discussed:

  • In-Production: Blockchain Use Cases
  • Controls and Technology: The New Trading Realities in the HFT
  • The Devil in the Detail: Analyzing India’s Market Microstructure Evolution
  • Technology Discussion – From Millisecond to Microsecond
  • Buy-side Trading and Liquidity Landscapes
Date: Thursday, 01 September 2016
Venue: Ballroom, ITC Grand Central
Format: 1 Day Event with Networking Luncheon and Exhibition
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LIVE INTERACTION WITH DR DUVVURI SUBBARAO, FOLLOWING HIS TALK ON: WHO MOVED MY INTEREST RATE?

LIVE INTERACTION WITH DR DUVVURI SUBBARAO, FOLLOWING HIS TALK ON: WHO MOVED MY INTEREST RATE?

CFA Society India invites you to a talk by Dr. Duvvuri Subbarao, former governor of the Reserve Bank of India, based on his just published book Who Moved My Interest Rate? The talk will be followed by an interactive Q&A session.

The opportunity to listen to insightful macroeconomic view points and to directly interact with one of India’s most prominent banking regulators is unprecedented. This talk also comes at a critical juncture as global financial markets increasingly find themselves in an uncharted territory of weak global economic growth, negative yields and difficult to reverse, accommodative monetary policies.

How do the world’s leading central banks, including the RBI and the people who lead these institutions, navigate through such uncertain times? Dr. Subbarao offers an insider’s viewpoint to the workings of India’s central bank as well as the dynamics of collaboration among the world’s central bankers.

Please join us for a thought provoking session from one of India’s topmost economic thinkers and leaders.

Livestream registration here.

EVENT DETAILS

Date: Friday, 26 August 2016

Time: 7.00 p.m. – 8.00 p.m. (India Time). Dr Subbarao’s talk followed by Q&A (livestream)

Regards

Biharilal Deora, CFA, FCAwww.linkedin.com/in/deora

CS – Reflections on the Ten Attributes of Great Investors

The world of investing and business has seen a great deal of change in the past 30 years. This report shares thoughts on the ten attributes of great fundamental investors. Accounting is the language of business and you need to understand it to appreciate economic value and to assess competitive positioning. Investors face a slew of psychological challenges. Perhaps the most difficult is updating beliefs when new information arrives. Position sizing and portfolio construction still do not get the attention they warrant. The substantial shift from active to passive management has profound implications for the investment industry.

Read the full report

Market outlook by Navneet Munot, CIO, SBI AMC

Attached herewith is monthly “market outlook” by Navneet Munot, CIO, SBI AMC

August 2016.pdf

On What to Buy in a Negative Real Rate World; Summary Benefits of a Plant Based Diet!

From: aditya rana
Date: Sat, Jul 16, 2016 at 1:25 PM

Hi!,

Negative real interest rates across the developed world pose a dilemma for investors as expected returns on most traditional asset classes are correspondingly low. So what should investors do regarding asset portfolio allocation under this type of an environment. The ever thoughtful and insightful Chris Brightman, the CIO of the financial advisor Research Affiliates , provides a helpful framework with which to approach this key question (http://www.researchaffiliates.com/Our%20Ideas/Insights/Fundamentals/Pages/562_Death_of_the_Risk-Free_Rate.aspx?_cldee=YWRpdHlhQHJhbmE2MC5jb20%3d) . To summarise:

-The risk-free rate is central to modern finance and investment methodology, and given that the world today is so far removed from positive real rates it is critical to adapt to the new environment to make informed decisions on optimum portfolio allocations. The key here is to appreciate that managing volatility is a detriment to achieving portfolio return objectives.

-Given that there is an increasing likelihood of direct money creation (“i.e. helicopter money”) by central banks , long term inflation expectations should be adjusted higher.

-Fears of deflation have resulted in the cheapening of inflation hedges such as commodities, bank loans, high-yield bonds, REITs and emerging market equities, thereby providing a unique opportunity to improve expected returns by investing in these assets.

-Money’s traditional role of a unit of account, medium of exchange and a store of value is increasingly being challenged by technology and persistent negative real interest rates (i.e. a storage cost) – calling into question whether other instruments and technologies can serve the same purpose.

-For example, virtual currencies using blockchain technology could eventually provide an alternative unit of account , and the ability to link credit card or a mobile payment app with a securities brokerage account together with a transaction sweep account, potentially obviates the need for cash or bank deposits as a medium of exchange.

-Holding liquid real-assets in place of bank deposits, provides us with positive long-term real expected returns and a superior store of value when compared to cash and government bonds which pay negative real rates.

-When investors start substituting real capital assets for cash and government bonds, the traditional method employed by central banks to manage the economic cycle by changing interest rates become difficult. This is because changing rates (i.e. the value of a currency) causes a change in the prices of real assets denominated in that currency without changing the value of the real asset.

-However, central banks still perform the crucial function of a lender of last resort to provide liquidity to the market during crises. But continued attempts to boost employment and real economic output increases the risk of long term inflation. So far, unorthodox policies have not created inflation as the central bank has been purchasing securities from banks rather than directly creating money – but if they start doing so then inflation could soon follow, as history has shown us.

-Negative real rates on cash and government bonds cannot even preserve purchasing power over the long run, let alone provide a real positive return over time to meet our investment objectives. This raises the question whether default-free negative real rates are really risk free?

-While the higher short-term volatility of a diversified portfolio of real capital assets is higher than that of T-bills, are they really riskier from the perspective of long-term wealth accumulation? Over a 10 year time horizon, the most of the return dispersion of a well diversified portfolio of real assets is higher than that of T-bills, begetting the question whether a guaranteed failure to meet return objectives can be viewed as low risk?

-While cash and government bonds should continue to play the important role of pre-funding near term commitments, cash also plays the important tactical function of providing an option to invest later at a lower (or higher) price.

-Commodities, bank loans, high-yield bonds, REITs and emerging market equities have traditionally provided a hedge against inflation by providing a positive correlation of returns to inflation (see chart below).

-With current fears on deflation, these inflation hedge assets have cheapened substantially and an equally weighted portfolio comprising these five assets provide a large pick-up in current real yield over the traditional 60/40 portfolio (see chart below).

-Higher starting yields have historically proved to provide higher future returns, and analysis currently shows that T-bills provide an expected 10-year real return of -0.6%, a 60/40 portfolio of 1.2% versus 4.0% for the equally-weighted inflation hedge portfolio. Higher expected returns imply higher volatility, with T-bills at 1.5%, 8.6% for the 60/40 portfolio and 12.2% for the inflation hedge portfolio.

-However, the higher volatility does not necessarily imply higher risk over the longer term. Looking at the dispersion of real returns for the different asset classes, a 95% confidence band for annualized 10-year real returns is -1.1% to -0.1% for T-bills, -1.6% to 3.9% for the 60/40 portfolio and 0.1% to 7.9% for the inflation hedge portfolio (see chart below). A near certainty of exceeding the long-term real returns of T-bills should not be viewed as higher risk.

-Central banks have engineered negative real rates by directly purchasing securities from the market and the corresponding creation of bank reserves. Given the increasing possibility of them moving to the next step of direct money creation, it would be prudent to shift a portion of an investment portfolio towards higher yield inflation sensitive assets like commodities, bank loans, high-yield bonds, REITs and EM equities to improve future returns.

-Brilliant piece of thinking and analysis which makes the salient point that longer term investors should embrace higher volatility by investing in a diversified portfolio of higher yielding assets to improve returns over the long term. This is a recurrent theme of this newsletter, and a portfolio weighted towards EM equities (over 8% expected real return over the next 10-years), EM US$ bonds (3.1% return) and local currency bonds (4.4% return), commodities (1.3%), European and Japanese equities (6.3% return) and developed country high-yield bonds (3.1% return) is likely to provide higher returns over the ensuing decade. Adding on sharp market downturns, and taking some cash off the table on upturns to provide the option to buy cheaper later, would be a sensible strategy to follow over the coming years.

-As pointed out previously, US investors selling into the stock market rally this year (with the S&P up 17% from its Feb lows) has reached near record levels as the chart below illustrates. So the question to ask is what is driving this rally?

-As the chart (from Matt King of Citibank) below illustrates, it is the surge in global central bank purchases (the highest since 2013) which is driving the global rally in risk assets driven by an acceleration of purchases by the ECB and the BOJ, and a reversal of the previous decline in EM FX reserves (see second chart below on the correlation between CB purchases and global risk assets). King expects this rally should continue going forward given the “potential for a further squeeze in risk assets driven by a broadening out of mutual fund inflows from IG to HY, EM and equities; the second lowest level of positions in our credit survey (after February) since 2008; and prospects of further stimulus from the BOE and perhaps the BOJ”.

Health Benefits of a Plant-based diet:

-To follow-up on last week’s summary of a guide to a plant-based diet published by the Permanente Journal a (a US based a peer-reviewed journal of medical science, social science in medicine, and medical humanities), I thought (on the suggestion of a reader!) it will be useful to present the relevant details of the guidelines which contains some very helpful information relating to the benefits of a plant based diet with links to the underlying research (for those interested). The article will be serialised in the following few newsletters.

SUMMARY OF HEALTH BENEFITS:

-Plant-based nutrition has exploded in popularity, and many advantages have been well documented over the past several decades.1 Not only is there a broad expansion of the research database supporting the myriad benefits of plant-based diets, but also health care practitioners are seeing awe-inspiring results with their patients across multiple unique subspecialties.

-Plant-based diets have been associated with lowering overall and ischemic heart disease mortality; supporting sustainable weight management; reducing medication needs; lowering the risk for most chronic diseases; decreasing the incidence and severity of high-risk conditions, including obesity, hypertension,​ ​
hyperlipidemia, and hyperglycemia; and even possibly reversing advanced coronary artery disease​,​
and type 2 diabetes.

-The reason for these outcomes is two-fold. First, there are inherent benefits to eating a wide variety of health-promoting plants. Second, there is additional benefit from crowding out—and thereby avoiding—the injurious constituents found in animal products, including the following:

– Saturated fats: Saturated fats are a group of fatty acids found primarily in animal products (but also in the plant kingdom—mostly in tropical oils, such as coconut and palm) that are well established in the literature as promoting cardiovascular disease (CVD)​.​
The American Heart Association lowered its recommendations​ ​
for a heart-healthy diet to include no more than 5% to 6% of total calories from saturated fat, which is just the amount found naturally in a vegan diet (one consisting of no animal products).

-Dietary cholesterol: Human bodies produce enough cholesterol for adequate functioning. Although evidence suggests that dietary cholesterol may only be a minor player in elevated serum cholesterol levels, high intakes are linked to increased susceptibility to low-density lipoprotein oxidation, both of which are associated with the promotion of CVD.​ ​
Dietary cholesterol is found almost exclusively in animal products.

-Antibiotics: The vast majority (70% to 80%) of antibiotics used in the US are given to healthy livestock animals to avoid infections inherent in the types of environments in which they are kept. This is, therefore, the number one contributor to the increasingly virulent antibiotic-resistant infections of the type that sickened 2 million and killed 23,000 Americans in 2013.

-Insulin-like growth factor-1: Insulin-like growth factor-1 is a hormone naturally found in animals, including humans. This hormone promotes growth. When insulin-like growth factor-1 is consumed, not only is the added exogenous dose itself taken in, but because the amino acid profile typical of animal protein stimulates the body’s production of insulin-like growth factor-1, more is generated endogenously. Fostering growth as a full-grown adult can promote cancer proliferation.

-Heme iron: Although heme iron, found in animal products, is absorbed at a higher rate than nonheme iron, found in plant-based and fortified foods, absorption of nonheme iron can be increased by pairing plant-based protein sources with foods high in vitamin C. Additionally, research suggests that excess iron is pro-oxidative and may increase colorectal cancer risk and promote atherosclerosis and reduced insulin sensitivity.

-Chemical contaminants formed from high temperature cooking of cooked animal products: When flesh is cooked, ​toxic compounds are produced which are ​
compounds carcinogenic, pro-inflammatory, pro-oxidative, and contributive to chronic disease.

-Carnitine: Carnitine, found primarily in meat, may be converted in the body by the gut bacteria to produce ​a toxic compound (​
TMAO). High levels of ​TMAO​
are associated with inflammation, atherosclerosis, heart attack, stroke, and death.

-N-Glycolylneuraminic acid: This compound is found in meat and promotes chronic inflammation.

Here’s to crowding out animal products from your diet and replacing them with healthy plant-based foods! I will be travelling for the next three weeks and the newsletters will recommence on August 20. Wishing my readers an enjoyable and restful summer!

Regards,

Aditya

Credit Summit 2016

Credit Summit India 2016
Tuesday, July 26th, 2.30PM Hotel Sofitel, Mumbai

Register Now – Avail a Complimentary Pass

Emerging markets are changing amid rapid urbanization and expanding domestic credit markets. This is creating a need to broaden and deepen bond markets to help finance corporate expansion and new infrastructure necessary to sustain the region’s growth.

Globally, uncertainty regarding Brexit, Monetary policies for central banks and fear of Chinese currency devaluation is keeping market on toes. Locally, with RBI stepping up efforts on cleaning the banking system, Govt backing PSB consolidation, SEBI changing REIT’s and InVit regulations, increasing volatility in rupee are making headlines.

With improving financial inclusion and new banking players on board, there is lot of anxiety in the outlook for banking and credit markets for near term. The Credit Summit India 2016 will capture views on issues impacting banking and credit markets this year and importantly thoughts on the year ahead; and what that might mean for you and your business, as you navigate the debt markets and capital providers relevant to your business, sector and geographic footprint.

This conference brings professionals responsible for Fixed income issuances, institutional fixed income investors, fund managers, fin-tech lenders together with senior management of banking and financial services companies, banks and rating agencies.

AIWMI’s Credit Summit India 2016 aspires to be an annual focal point for global investors to learn about the wider industry and the strategic debate within which Credits operate, and secondly as an objective platform for the most interesting investment themes and best performing funds/banks/credit instruments in India.

AIWMI’s Credit Summit India 2016 is one of the largest Credit and Debt Market in the sub-continent with a focus on how to:

  • Understand Public sector banking consolidation?
  • The latest in Credit Ratings and nuances
  • Understand Inherent risks associated with Debt from investor perspective
  • Analyze impact of Global Macro on your portfolio and credit investments
  • The rise of Alternative investment funds, REIT’s and InVits as new age players in debt
  • How to deal with a higher banking regulatory risk
  • Latest about Structured Credit funds and strategies
  • How to implement new strategies for Credit Risk and Stress testing
  • How to implement asset allocations in Credit in your Pension/Insurance portfolio
  • How to pinpoint trends and overall outlook for Credit Markets in India as well as global credit market outlook
  • Impact of Brexit, monetary policies on your portfolio

Attendees will benefit from:

  • Network with leading rating agencies, Credit strategy firms, Hedge funds, dealers, Banking professionals, capital providers, AMC professionals & private equity and other buy side investors
  • Equip yourself with forward focused strategies to adapt, grow & compete with India’s Banking and Credit market landscape
  • Hear from over a dozen leading Lenders, investors and Banking/Credit Markets speakers who will share their knowledge and strategies
  • Navigate the newest trends and opportunities in Loan markets, credit markets, credit strategy and ratings
  • Grasp the global Credit outlook and Indian debt outlook
  • Gain insights into developments in India’s emerging and frontier markets

Tuesday, 26th July 2016

14.30: Registration

15.00: Welcome Address

Mr. Aditya Gadge, CEO, Association of International Wealth Management of India

15:05 Welcome Address (NISM): Credit Markets – Banking Consolidation and Rise of Fintech Lenders

Confirmed: Mr. Sandip Ghose, Director, National Institute of Securities Markets

15.10: Keynote address from the honorary Chief Guest – Regulator

15.40: Keynote address from the honorary Chief Guest – IBA

16.10: Panel Discussion: Corporate Credit Quality – Lack of skills or need for better analysis?

Confirmed

Mr. R C Lodha, Executive Director, Central Bank of India

Mr. Bhaskar Niyogi, Head – Enterprise Risk and Policy, RBL Bank

Mr. Mohan Jayaraman, MD – Experian India

Mr. D R Dogra, CEO, CARE Ratings

Inviting

Mr. Ananth Narayan, Co-Head, Wholesale Banking, Standard Chartered Bank

17.05: Surviving New age Lending and Credit Markets Outlook

Confirmed

Mr. Sashank Rishyasringa, MD, Zen Lefin

Mr. Gurpreet Chhatwal, Business Head – Large Corporates, CRISIL Ratings

Mr. M P Baliga, Senior Program Director, CAFRAL

Inviting:

Ms. Zarin Daruwala, CEO – Standard Chartered

Mr. V Srinivasan, Deputy Managing Director, Axis Bank

18.00 Vote of Thanks from the chairperson and close of the conference followed by Networking over High tea

Register Now

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