😞 Stimulus disappointment & economic recovery from the pandemic.
Orowealth Weekend Reads: May 24, 2020
LAST WEEK MARKET MOVES
|Sensex||Nifty||Nifty Midcap 100||Nifty Smallcap 100|
|30,672.59 (-1.37%)||9,039.25 (-1.07%)||12,668.05 (-2.49%)||3,850.85 (-2.14%)|
As we face unprecedented circumstances and devastation due to the Covid 19 virus, it has become vital to plan for a Health Insurance Policy. As the word insurance suggests, Health Insurance provides financial coverage for the medical expenses incurred by an individual and their family members. With rising medical expenses, it has become ever so important to avail a Health Insurance plan in order to ensure your lifetime savings are intact.
As we continue in our journey to provide alternate products to our clients, we are excited to announce our partnership with Future Generali to provide a Health Insurance Policy with the following details:
1. Plans for Individuals with base premium as low as Rs 394 per month*
2. Plans for Families with base premium as low as Rs 757 per month*
a. Cashless Claim Benefits
b. Easy Installment Facility
c. Plans customized to cover for Covid – 19
d. Additional Cover beyond the Employer Cover
e. Tax Benefits under Section 80D, Income Tax Act, 1961
*Premiums to be paid are subject to the coverage being opted for and are exclusive of taxes.
NEWS WE HAVE BEEN FOLLOWING
US Federal Reserve Chairman Jerome Powell, in an interview with CBS’ 60 minutes, termed the ongoing coronavirus pandemic as “a time of great suffering and difficulty”. But apart from his concern for people, he also expressed his concern about the economy. While he was confident about the US economy’s prospects, he expressed that it make take some time for it to recover. On the period of recovery, he said “It could stretch through the end of next year. We really don’t know.” He did say, though, that the country could avoid a depression. He thought so because the pandemic was an external event and not an internal problem with the economy. With the financial system being healthy, the country could avoid a sustained economic downturn and bounce back. He estimated that unemployment could peak at 25% with “the lowest-paid people” being the most impacted.
The Fed Chairman said that the economy could contract 20-30% in this quarter but expected a steady recovery in the second half of the year if the country could avoid a second wave of the virus.
Financial market participants seemed quite disappointed with the stimulus measures announced by the finance minister. Though the measures span from NBFCs and MSMEs to agriculture and migrant laborers, they are also aimed at containing major damage to the fiscal condition and avoiding a credit rating downgrade. Market participants who were disappointed with the announcements pointed to several reasons for the same, one of them is that now is not the time to worry about the fiscal condition of the government. They were also looking for an announcement regarding the reduction of personal income tax and GST rates. Some felt that the announcements were missing a targeted sectoral relief package. However, there were some positive measures as well. The additional allocation of Rs 40,000 crore towards MGNREGS, which already had Rs 61,500 crore allocated to it, is estimated to generate 300 crore person-days in total. Further, the government increased the minimum threshold to begin insolvency proceedings against a company from Rs 1 lakh to Rs 1 crore. Also, fresh insolvency proceedings will not be initiated for a year. Opening up all sectors to the private sector is also seen as a positive.
The prime minister’s Rs 20 lakh crore Atmanirbhar Bharat Abhiyan has dampened the spirits of the markets. Some clarifications are still being sought, though, and announcements may be modified or enhanced depending on the future course of the pandemic.
FROM OUR BLOG SECTION
Real estate investment has become a tricky business. At one time, it was considered to be a golden goose. Now it has become less attractive due to slumping prices and stagnating projects. However, if you can hold it for a long term, a property can still give you great returns over a period of time.
QUOTE OF THE WEEK
“You’ve got to find some way of saying it without saying it.”
– Duke Ellington (an American composer)
Chosen by Ravi – Orowealth.