There has been a lot of talk about the need to revisit LTCG and DDT in Budget, but not many are talking about the buyback tax, which dried up share buybacks by India Inc this past year. This levy came in the July 2019 Budget as an amendment to a 2013 law, which was in vogue to tax share buybacks by unlisted companies. The idea behind the levy was to discourage use of the buyback route for distributing profits among shareholders in order to avoid tax. Dividend distribution, the other route for profit sharing, is meanwhile taxed at multiple levels. These are factors that have dented investor confidence in the market.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded 36 points higher at 7 am (IST), signalling signs of rebound on Dalal Street. Asian shares rose on Wednesday as better-than-expected Apple Inc earnings drove some regional tech gains although broader confidence was capped by worries about the economic impact of China's virus outbreak.
HERE'S WHAT TO WATCH  | MSCI index of Asia-Pacific shares outside Japan rose 0.2%, ending four days of losses. Australian shares rose 0.41%, while Japan's Nikkei stock index rose 0.27%. |
| US stock indices staged a solid comeback on Tuesday. Dow gained 186 points to 28,722, halting a 5-session slide. The S&P500 advanced 1% to 3,276, while the Nasdaq 1.4% to 9,269 |
| Oil prices rose for a second day on Wednesday, standing on firmer ground after a five-day fall on talk OPEC could extend oil cuts if a new coronavirus hurts demand, while data showing a decline in US stockpiles helped steady prices. Bent crude rose 33 cents, or 0.6%, to $59.84 a barrel while US crude gained 31 cents to $53.79. |
| The rupee clocked its first gain after three days of losses on Tuesday, recovering by 12 paise to close at 71.31 against the US dollar even as concerns remained over fast-spreading coronavirus from China to other regions. |
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NRIs as FPIs… Non-resident Indians (NRIs) will soon be able to invest in Indian markets as foreign portfolio investors (FPIs). Sebi is planning to create a third category of investors under the current FPI regime for NRIs to invest in the local markets, said two people aware of the development. The move will enable greater participation of NRIs in the Indian markets as investment limits in listed companies will rise sharply. NRIs will also be able to trade in Indian markets with greater ease since they will be now able to invest through custodian banks.
Read More And, That's a Six… Chennai Super Kings (CSK), the team that is second only to Mumbai Indians in winning the Indian Premier League, has seen its valuation more than double in the past one year on expectations that the country's first listed cricketing entity will fetch an even greater premium when shares are eventually sold to the public. CSK is now trading at Rs 30 per share at a market value of Rs 1,000 crore in the unlisted market. Retail high-net worth individuals are buying the currently unlisted stock.
Read More Now, a US-India Trade Deal… India and the US are likely to finalise a mega trade deal pegged above $10 billion (more than Rs 71,000 crore) next month when United States Trade Representative (USTR) Robert Lighthizer visits New Delhi. The deal, whose legal vetting is underway, will be signed during US President Donald Trump's visit to India, and is a precursor to a free trade agreement between the two nations, officials in the know of the plans said.
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Retro Tax Returns to Haunt… Foreign investors have sought grandfathering benefit from the government as a new global tax framework which kicks in from April this year may see them getting slapped with capital gains tax notices unless tax treaties are reworked, consultants and experts said. Taxmen may question or deny tax exemption given under current existing treaties with foreign countries after April 1 as the new multilateral instrument (MLI) regime has no provision for grandfathering or exemption from tax for investments made before a certain period.
Read More No Sidepocketing Voda… UTI Mutual Fund, Nippon India Mutual Fund and Aditya Birla Sun Life Mutual Fund have decided not to segregate the debt securities of Vodafone Idea in schemes that hold the bonds after ratings company Crisil downgraded the outstanding debt of the telco to below-investment grade. As per regulatory guidelines, fund houses can segregate portfolios, or create a side pocket, if the rating of a company falls below investment grade. The three fund houses value the security at Rs 35, in line with valuations provided by agencies. Only Franklin Templeton Mutual Fund, the biggest holder of the security, segregated it after the rating downgrade, having marked it down to zero earlier.
Read More Meanwhile... Risk cover for roads!… The NHAI has proposed insurance cover for road projects, in a step that could help bring in credible project developers and mitigate construction period risks. "We are trying that insurance companies should also give a surety," said an official close to the development. "We have proposed to the Insurance Regulatory and Development Authority of India to come up with an instrument." This mechanism has been proposed since banks are facing difficulties in furnishing bank guarantees, the official said.
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