Orowealth Weekend Reads: February 23, 2020

LAST WEEK MARKET MOVES

JUST LAUNCHED: PORTFOLIO MANAGEMENT SERVICES (PMS)
Introducing Portfolio Mangement Services
It gives us immense pleasure to inform you that your trusted financial advisor, Orowealth, has launched their own Portfolio Management Services (PMS) in January 2020. We commenced operations after receiving the license from SEBI in September 2019 by launching an “Oro All Weather Strategy” portfolio on January 1, 2020. Within the first month of launch, we have outperformed the benchmark and would like to report the fund’s performance based on actual managed portfolio.

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NEWS WE HAVE BEEN FOLLOWING

#Vodafone Idea in trouble
The Supreme Court has dismissed Vodafone Idea’s appeal to be relieved from invoking its bank guarantees to recover its adjusted gross revenue (AGR) dues. Telecom companies owe the Department of Telecommunications (DoT) Rs 1.47 trillion out of which the companies have paid Rs 14,697 crore, or about 10%. On February 17, Bharti Airtel and Vodafone Idea paid Rs 10,000 crore and Rs 2,500 crore respectively as a part of their AGR dues. While Airtel owes the government Rs 35,500 crore, Vodafone Idea owes around Rs 54,000 crore. Airtel expects to make the remaining payment before March 17, but Vodafone Idea is not is a position to make such a claim. On February 14, the apex court had rejected pleas of telecom companies seeking relaxed payment for their AGR dues, asking them to make payments immediately.

Takeaway-
The DoT has sought legal opinion on whether it should invoke bank guarantees if telecom companies fail to pay their full dues before the next hearing on March 17.
If this happens, the operations of Vodafone Idea will be at risk. However, encashing bank guarantees may not serve in the recovery of dues as they amount to just Rs 37,641 crore.

# PNGRB may end gas distribution
The Petroleum and Natural Gas Regulatory Board (PNGRB) has drawn up plans to end the monopoly of city gas distributors in at least 30 license areas. It will do so by classifying their network as a ‘common carrier’ which will make gas distributors reserve a portion of their capacity for third parties. Companies that are expected to see an end to their marketing monopoly are Indraprastha Gas, Mahanagar Gas, Gail Gas, and Gujarat Gas. People in the knowledge of the development have said that the downstream regulator will create a regulatory framework for ending the monopoly in the next few months.

The regulator will not end all monopolies in one go. PNGRB also expects challenges to its decision and believes such challenges will make the process of regulation more robust. It had floated a draft regulation for declaring city or local natural gas distribution networks as a common carrier or contract carrier in August 2019. According to it, once a network is declared as a common carrier, a distributor will have to reserve 20% of its capacity for third parties.

Takeaway-
An unfettered monopoly in urban gas distribution is the primary reason for the regulator to think about ending it. Introducing competition in the market is expected to bring in efficiency and benefit consumers.

FROM OUR BLOG SECTION

ETF vs Mutual Funds
Exchange-Traded Funds, or ETFs, are one of the several options available to investors in our investment universe. They are structured like a fund and help invest across several asset classes. Equity ETFs are in prime focus, followed by Gold ETFs, Bond ETFs, Theme-based ETFs etc.

4 Tips to Become Debt Free
We are constantly exposed to things we don’t need and often relent owing to peer pressure. We live in a world of competition where we associate a person’s success to luxuries that he owns. Here are a few tips that can help you become debt-free.

QUOTE OF THE WEEK
“The optimist sees the rose and not its thorns – the pessimist stares at the thorns, oblivious of the rose.”
– Kahlil Gibran (a Lebanese-American writer, poet and visual artist)
Chosen by Ranjeet – Orowealth.