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Think Ahead with EZWealth – 09 Nov 2021

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New plan to tax blockchain ecosystem in the works amid wide adoption of NFT

With the wide adoption of non-fungible tokens (NFT) in the country, the government is again examining the proposal to tax the blockchain ecosystem, which includes cryptocurrencies and such digital tokens. The use of NFTs has picked up at a large scale, with celebrities endorsing them and they have been been commercialised, an official said.

Investment in cryptocurrencies has also increased lately and there is a need to tax them, he added. The tax department wants the framework to tax the use of blockchain for commercial purposes to be implemented even before the government brings in legislation for cryptocurrencies and regulating the official digital currency. A bill on this is expected to be introduced in the winter session of Parliament. The push comes in the backdrop of surging investment by Indians in cryptocurrencies. The investment is about Rs 6 trillion and endorsements of NFTs by Bollywood actors.

Seperately the government is working on legislation that will create a “facilitative framework” for introducing an official digital currency, which the Reserve Bank of India will introduce.

Gujarat ranks 1st for third consecutive year in logistics performance index

A commerce ministry report on Monday pointed out that Gujarat topped the logistics index chart, a marker of the efficiency of logistical services necessary for promoting exports and economic growth. This is the third year in a row that the state remained on top of the rankings. Gujarat was followed by Haryana, Punjab, Tamil Nadu, and Maharashtra. The report said that it ranked the states on the basis of their logistics ecosystem, while highlighting the key logistics-related challenges faced by the stakeholders and also includes suggestive recommendations. Union minister of commerce Piyush Goyal unveiled the third LEADS (Logistics Ease Across Different States) 2021 report. The LEADS report also aims to enhance focus on improving logistics performance across states which is key to improving the country’s trade and reducing transaction cost.

Jammu and Kashmir topped the chart among the northeastern states and Himalayan Union territories while Delhi topped among the rest of the Union territories category. The report also showed that Uttar Pradesh, Odisha, Karnataka, Andhra Pradesh and Telangana were ranked below fifth-placed Maharashtra in that order. West Bengal, Rajasthan, Madhya Pradesh, Goa, Bihar, Himachal Pradesh and Assam were ranked at 15th, 16th, 17th, 18th, 19th, 20th and 21st respectively. The entire index is based on 21 indicators. The survey was conducted during May-August this year and the exercise garnered 3,771 responses from 1,405 respondents across the country.

Around 7 bcm of LNG reserves likely to rein in fuel price volatility

The volatility in the fuel market induced by the Covid-19 pandemic has prompted India to look at strategic reserves for its liquefied natural gas (LNG) market. While the country would need around 7 to 8 billion cubic metres (bcm) of reserves to successfully mitigate price volatility, the lower share of natural gas in the country’s energy mix could put a question mark on the viability of such reserves. The estimate of 7-8 bcm of LNG reserves is based on similar reserves in developed economies.

According to the Gas Exporting Countries Forum, the global gas storage capacity is around 417 bcm, with the United States and the European Union accounting for close to 55% of it. The covers 80 days’ gas requirement in the EU and 58 days in the US. And the storage-to-consumption ratio in the EU and the US is around 22% and 16% respectively.

Union Power secretary Alok Kumar last month emphasized the need for reserves of natural gas and coal as the country was witnessing a shortage of coal at its power plants. China, which was facing a similar fuel shortage, and accounts for over half the world’s natural has storage capacity under construction, is looking to significantly increase its storage reserve capacity. This is also the reason why global gas prices are at a record high.

Diwali was the worst in almost a decade for India’s auto firms

The festive period of Navratri-Dussehra and Dhanteras-Diwali this year has delivered the worst performance for India’s automakers in almost a decade. The main festive season from Navratri to Diwali is the peak period of activity in the personal mobility segment. But demand remained insipid this time, particularly in north India where Diwali has historically been a sentiment booster.

Vehicle registrations during the 30-day period declined by steep double digits compared with the same festive period last year. While the passenger vehicle (PV) market was hurt by lack of supplies, as a shortage of semiconductors forced automakers to cut down on production, there was an unusually sluggish demand for two-wheelers. According to industry insiders, retail sales of passenger vehicles dropped by about a third in the 30-day period. An estimated 305,000 PVs were delivered this time versus 455,000 units last year, they said.

Based on data from the government’s VAHAN portal, which captures the registration numbers from 85% of the country’s regional transport offices, automakers retailed 238,776 units, compared with 305,916 units in 2020, posting a decline of 22%. Registrations of two-wheelers at 1.07 million units were 11% lower. Even tractor registrations declined 13%, underlining the stress in the rural areas. This data comes with a lag of 7-15 days, so it may take a few more days to capture the registration numbers close to Diwali.

‘Fast money’ drives Bitcoin, ether to new record highs

Bitcoin and ether made record peaks in Asia trade on Tuesday as enthusiasm for cryptocurrency adoption and fears about inflation lent support to the asset class. Bitcoin rose as high as $67,803 and ether, the second-biggest cryptocurrency by market value, hit $4,825 in early Asian hours. Both have more than doubled since June and added nearly 70% against the dollar since the start of October.

Momentum has been gathering since last month’s launch of a futures-based bitcoin exchange-traded fund in the United States raised expectations of flow-driven gains. Bitcoin inflows totalled $95 million last week, representing the largest inflows of all digital assets, while inflows during an eight-week bull run for the cryptocurrency were $2.8 billion, the CoinShares data showed on Monday. In recent weeks, Australia’s biggest bank has also said it will offer crypto trading to retail customers, Singaporean authorities have sounded positive on the asset class and spillover from a positive mood in stocks has lent support.

The moves have helped lift the total market capitalisation of cryptocurrencies above $3 trillion, according to crypto price and data aggregator CoinGecko. On the CoinMarketCap platform, which tracks 13,796 cryptocurrencies, the total cryptocurrency market capitalisation was just below $3 trillion at $2.92 trillion.[/vc_column_text][vc_column_text css=”.vc_custom_1636425771992{border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;background-color: #e8e8e8 !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;border-radius: 1px !important;}”]

Stocks in the news today

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Reliance Industries: The largest company has exited the last of its shale gas assets in the US after it agreed to sell its holding in EagleFord shale gas assets for an undisclosed sum of money. Reliance had between 2010 and 2013 bought stakes in three upstream exploration joint ventures.

Britannia Industries: The FMCG player reported a decline of 22.9 per cent in consolidated net profit at Rs 381.84 crore for the second quarter ended in September, impacted by inflationary trends in raw material inputs. The company had posted a net profit of Rs 495.20 crore in the July-September quarter a year ago.

Vedanta: The mining player announced the delisting of American Depositary Shares from the New York Stock Exchange at the close of trading on Monday. Vedanta had earlier said the decision to delist American depositary shares from the New York Stock Exchange (NYSE) is aimed at simplification and triggered by the low trading volumes in the security.

Sobha: The realty firm reported a nearly three-fold jump in its consolidated net profit at Rs 48.3 crore for the quarter ended September and announced plans to raise Rs 140 crore through the issue of debentures. Its net profit stood at Rs 16.2 crore in the year-ago period.

SBI Cards and Payment Services: The NBFC said it will raise Rs 2,000 crore by issuing bonds on a private placement basis. The board of directors of the company has approved, raising of funds by way of issuance of non-convertible debentures (NCDs).

Aurobindo Pharma: The drug firm reported a 13.69 per cent decline in its consolidated net profit to Rs 696.71 crore in the July-September quarter mainly on account of decline in sales in the growth markets and its anti-retroviral business.

DCM Shriram: The company engaged in chemicals, sugar, and fertilisers businesses announced an investment of over Rs 350 crore, mainly to expand the capacity of sugar mills.

Ujjivan Small Finance Bank: The private lender reported a net loss of Rs 274 crore in quarter ended September 2021 as the core income fell, alongside a spike in provisions for bad loans. The Bengaluru-headquartered SFB had posted a net profit of Rs 96 crore in September 2020 quarter.

Cadila Healthcare: The drug firm said it has received an order to supply one crore doses of its COVID-19 vaccine, ZyCoV-D, to the Indian government at Rs 265 per dose.

V-Mart Retail: The retail chain player reported narrowing of net loss to Rs 14.14 crore for the second quarter ended September 30, 2021. The value fashion and lifestyle products retailer had posted a net loss of Rs 18.96 crore in July-September period a year ago.

Utkarsh Small Finance Bank: The small lender reported nearly 52 per cent decline in net profit at Rs 37.67 crore for the half year ended September 2021 of the current fiscal year on higher provisions. The IPO-bound SFB had posted a net profit of Rs 77.87 crore in the same period a year ago.

KRBL: The basmati rice firm reported a 9 per cent decline in its consolidated net profit at Rs 136.22 crore for the quarter ended September. Its net profit stood at Rs 149.81 crore in the year-ago period.

Inox Wind: The renewable energy player said it has bagged a 150 MW wind power project order from NTPC Renewable Energy. The project will help NTPC achieve its target of having over 60 GW renewable energy capacity, constituting nearly 50 per cent of the company’s overall power generation capacity by 2032.

Karur Vysya Bank: The private lender reported a 43.5 per cent jump in its net profit to Rs 165 crore in the quarter ended in September 2021 on improved credit off-take in retail and business segments as well as a fall in bad loan provisions. The south-based lender had posted a net profit of Rs 115 crore in the same quarter a year ago.[/vc_column_text][vc_separator][vc_column_text]

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