PLI (Production Linked Incentive) Scheme

PLI : Production Linked Incentive Scheme

This scheme aims at giving incentives to companies who increase the sales on products manufactured in Domestic units

This might boost companies to increase their production / Sell their products more to get more incentives from the government. Though the companies have mixed opinion on this scheme, definitely a demand oriented companies will welcome this scheme and increase their production

As a cause they may increase their units to produce more, which might push the companies to increase their investors / investments and their revenue would get higher, which increase the job opportunities

A welcome move and waiting to see the rally in Pharma Sectors shortly

Increase in Existing Production + Corona Vaccine Development + PLI Incentive = 

Game Changer once again for Pharma Sector

Best Regards,

B G Nareshkumar

Bank Nifty Vs ICICI Bank

Let's think from the Investor point of view, Bank Nifty was trading roughly @ 31,555.90 and ICICI Bank was trading roughly @ 497.80 a year ago

If I invest in Bank Nifty or in ICICI Bank a year ago, my intension would be to get slightly higher returns than I invest in these banks FD's or any other forms directly but now it is trading below the breakeven

Also when we compare the charts of Bank Nifty and ICICI Bank, there is no much difference in the movement

However, when we compare HDFC Bank returns, it is trading at all time high

Now, by considering Year on Year basis (Jan to Dec), the last month of the year December 2020 will be a testing month for ICICI Bank to catch up the breakeven or go beyond the ATH to keep investors not moving away from them. Lets have our fingers crossed and wait for the last 1 month of the year.

Best Regards,

B G Nareshkumar

Insurance Companies & Stock Market

When thinking of Stock Market, I understand with my experience in Options Derivative segment, most people make money in Option Writing

Option Writing / Selling is selling of an asset without owning it by paying the Margin Money

When I sell the option on any particular strike (Normally I go selling the OTM), I collect the Premium money and when my condition is satisfied by end of the contract, I don't need to return that back to the buyer (that's my profit)

When thinking of this concept, I remember and understand how Insurance Companies work. I buy a CAR, need to take the insurance (mandatory) and when I don't have any issue (accident), I lose that money and that's the profit of the insurance company

Here, the main idea is the insurance company is optimistic that the buyer of the insurance will not have an accident or any issue inorder to claim it. So, the insurance company is OPTIMISTIC

Similarly, I be optimistic in selling the asset considering that the spot price of the company will increase in future and the winning chance is higher (Disclaimer: select the company accordingly)

Now, the next step is Insurance Companies make money most of the time, why not trade (Derivative Option Writing) with Insurance Companies ?, By this I own the Insurance Company.

Best Regards,

B G Nareshkumar