Wondering if you are up to speed with topics that are likely to pop up at your upcoming dinner meet? Here’s a list of the key developments in finance that happened this week:
When someone talks about investing in Bitcoins, tell them it might have hit bubble territory:
Bitcoins reached an all-time high of $11,395 on Wednesday. But its rapid increase prompted warnings from a stream of prominent investors that it had reached bubble territory. It fell as much as 8 percent on Thursday to hit $9,000 exactly. One of the reasons for this could be that traders who bought bitcoins initially would have sold them to make profits from its rapid increase. Another reason could be an outage in Bitcoin exchanges.
Bitcoin’s fall on Thursday pulled down the prices of other cryptocurrencies with Ethereum, bitcoin’s biggest rival, falling as much as 19 percent on the day, according to trade website Coinmarketcap.
When someone talks about gains from stock market being tax free tell them that might no longer be the case:
According to sources the Bombay Stock Exchange has asked the Union Finance Ministry to again start taxing the profits made on sale of shares.
Currently any profits made on sale of shares held for more than a year are tax free. These profits are called as LTCG-Long Term Capital Gains. Whereas profits made on sale of shares held for less than 12 months are taxed at 15%. These profits are called as Short Term Capital Gains. Not charging tax on long term gains has made Indian markets one of the most liberal markets in this regard, says BSE. According to them not charging tax leads to huge losses for the government and market manipulation.
When someone talks about onion prices in India being high, you could link it to it impact on other Asian countries:
Last year farmers had produced a lot of onions because of which they faced losses. That’s why this year farmers produced less onions to reduce their losses. However this led to an onion shortage and hiked up their prices.
In order to improve the situation the government announced that Indian traders cannot export onions cheaper than $850 (approximately Rs 54,826) per tonne till the end of the year. This has made onions, an essential part of the Asian diet expensive and scarce in Asian counties. Indonesia and Nepal are looking to China and Egypt for supplies, but these countries also are facing a shortage.
When someone talks about interest rates you could talk about the government urging RBI to reduce rates:
In order to boost economic growth the government wants the RBI to reduce interest rates in the coming months. The next Monetary Policy Committee (MPC) meeting where they decide interest rates is on Dec 5-6, and the finance ministry wants a rate cut by then or after the next one which is in February. After that oil prices are expected to increase which will cause inflation making it difficult to cut interest rates.
And since economic growth has been slow the Prime Ministers promise of creating jobs for the youth by next year will be difficult especially with a strict monetary policy in place. That’s why the government is urging the RBI for rate cuts soon. However at its meeting held on Oct 4 the MPC had voted 5-1 for rates to remain unchanged. Now we can only wait till December 5-6 to see what the RBI has in store for us!
When someone talks about the global entrepreneurship index you could say that India moved up one spot:
India moved up one place to the 68th spot on the Global Entrepreneurship Index of 2018, with U.S.A occupying the first place. Each country is ranked according to its GEI score that indicates overall entrepreneurship attitude and potential. In 2014 India was at 76th, last year, India jumped up by 29 spots to the 69th position. According to last year’s report India was strong in terms of product innovation but we were lacking in the area of technology absorption.
Now that you know these topics, the next time someone mentions them you know what to say. If there are any such topics spoken about at a party that have made you feel out of the loop, write to us at email@example.com and we will cover it in our next edition.