Finance

Auto and finance stocks can bounce back even if the market crashes in July

Published

2 years ago

June 24, 2022

Auto and finance stocks can bounce back even if the market crashes in July

Issues of a worldwide slowdown have put a cease within the bull run within the IT and pharma sectors, however analysts have two new picks to select from.
Whereas the auto sector has struggled and underperformed the benchmark Nifty 50 index, analysts consider easing supply-side pressures are bringing the shine again on this sector.
Finance sector, too, which remained largely unblemished throughout the Covid pandemic, has an opportunity to shine now that rates of interest are surging.

Indian inventory markets are flirting with bear market territory due to rising rates of interest within the US – which has taken away the shine off IT and pharma sectors.

Nonetheless, it’s not all doom and gloom as analysts consider buyers can take a look at two sectors to place their cash in – finance and cars.

Talking to Enterprise Insider India, Shrikant Chouhan, vp at Kotak Securities highlighted that these two sectors may see a rebound after maybe yet another dip – almost definitely after the US Fed’s July assembly.

Whereas finance and commodities have seen a significant correction, the auto index has outperformed the benchmark Nifty 50 index.

How varied Nifty indices have carried out this 12 monthsNSE / Enterprise Insider India / Flourish

Why are fairness markets struggling?

Inflation, rising bond yields and provide chain constraints on account of geopolitical incidents have led to main corrections in international fairness markets.

India’s benchmark Nifty 50 index is down over 11% this 12 months, whereas its US counterpart Nasdaq composite has seen a 30% decline.

Rising rates of interest within the US and different developed markets have additionally made a dent within the forecasts of Indian IT giants like TCS, Infosys and Wipro, who have been already battling rising worker churn.

The pharma sector has been impacted, too, however in keeping with Chouhan, vp, Kotak Securities, that is extra as a result of ongoing investigations by US FDA into India’s pharma majors.

Additionally Learn

M&M shares hit 52-week high on the back of rural revival – more good news in store

M&M shares hit 52-week excessive on the again of rural revival – extra excellent news in retailer

Whereas the auto sector has struggled and underperformed the benchmark Nifty 50 index, analysts consider easing supply-side pressures are bringing the shine again on this sector. Finance sector, too, which remained largely unblemished throughout the Covid pandemic, has an opportunity to shine now that rates of interest are surging. Indian inventory markets are flirting with bear market territory due to rising rates of interest within the US – which has taken away the shine off IT and pharma sectors.

The connection between auto and finance

Rising rates of interest are often thought-about a optimistic for finance corporations, since their major supply of earnings is the curiosity they earn on loans and advances. Whereas curiosity on deposits have additionally seen a average improve, curiosity on loans is way larger compared, as is the quantum of loans.

With the
rural revival pushing tractor gross sales and kharif output anticipated to be ‘bumper’, analysts consider the auto sector will expertise progress and the upper rates of interest can be absorbed, which advantages each finance and auto sectors.

“Persons are paying their dues on time. Banks have change into aggressive in automobile finance now. Availability of finance is now not an issue,” mentioned a report by Spark Capital, stating that 9 out of ten tractors are actually bought on credit score, versus 5 a number of years again.

The analysis agency states that it has noticed that the demand for loans has gone up within the final two months within the building and auto sectors, with HDFC, ICICI Financial institution and Axis Financial institution providing loans with none hassles.

So far as the auto sector is worried, analysts at ICICI Securities consider that the headwinds for the sector are actually “largely receding”. With key commodity costs now seeing main corrections of as much as 35%, the gross margins of auto corporations are anticipated to extend by 3-5%.

Analysts at Morgan Stanley even have a optimistic outlook on the auto sector, underlining that commodity and provide chain pressures have eased, volumes are sturdy and EVs are actually part of auto corporations’ progress plans.

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M&M shares hit 52-week excessive on the again of rural revival – extra excellent news in retailer

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Finance

St. Augustine's says it will eliminate 50% university employees ahead of accreditation meeting

Published

2 hours ago

November 23, 2024

Press Room

St. Augustine's says it will eliminate 50% university employees ahead of accreditation meeting

RALEIGH, N.C. (WTVD) — Saint Augustine’s University (SAU) announced Saturday it will eliminate several positions, including non-faculty and vacant, this month ahead of its significant accreditation meeting.

Last December, the Southern Association of Colleges and Schools Commissioner on Colleges (SACSCOC) voted to remove SAU from membership due to its financial status. The university’s appeal was denied in February and then in July, the SACSCOC arbitration committee reversed the decision and reinstated SAU’s accreditation.

The SACSCOC board will vote on the next step for the university in December.

In a news release, SAU said to ensure compliance with the Southern Association of Colleges and Schools Commissioner on Colleges and keep its accreditation, the school has reduced its expenses by approximately $17 million in fiscal year 2024 compared to 2023. Reductions, totaling 50% of university employees, include 67 staff positions (41% reduction); 37 full-time faculty positions (67% reduction); 32 adjunct faculty positions (57% reduction); and stopping several under-enrolled programs.

SEE ALSO | St. Augustine’s alumni hosts celebration amid canceled on-campus homecoming

The university also said it will be actively settling outstanding balances with vendors and adjusting various contrasts.

SAU also reported completing four financial audits for fiscal years 2021, 2022, 2023, and 2024, and restoring employee payroll and health insurance benefits.

The HBCU university — remaining millions of dollars in debt — secured a $7 million loan from Gothiuc Ventures with a high-interest rate. To get the loan, St. Aug’s put up much of the university’s main campus and off-campus properties as collateral.

Gothic Ventures tells ABC11 that the interest rate offered was determined by the financial difficulties faced by the university, which included a recent audit, historical revenue losses, and outstanding debt.

SEE ALSO | Saint Augustine’s University’s high-rate $7 million loan puts HBCU in jeopardy, finance experts say

Many, including SAU alumni and finance experts, are concerned about this loan.

“We are concerned about the partnership between Gothic Ventures and Saint Augustine University because if for any reason Saint Augustine is unable to repay Gothic ventures, the land will be lost and the university as we know it will cease to be,” alum Bishop Clarence Laney said.

The lawsuit against the board of trustees by the SaveSAU Coalition was also recently dismissed.

EDITOR’S NOTE: The featured video is from a previous report.

Finance

Assess your financial risk before new policies affect the economy

Published

11 hours ago

November 23, 2024

Press Room

Assess your financial risk before new policies affect the economy

I’ve been thinking about financial risk lately.

Should I change my asset allocation in my retirement portfolio, considering Donald Trump’s successful bid for the White House? Stock market valuations have risen smartly in recent years, which real income growth, productivity improvements, technological innovation, low unemployment rates and healthy corporate profits have largely powered. Yet with the election of Trump, voters have approved a massive economic experiment.

The Trump administration comes into power with many policy goals, but four economic initiatives stand out: Enacting significant tax cuts; imposing broad-based and significant tariffs; sweeping raids, mass deportations and tighter immigration controls; and slashing federal government regulations. The extent that these plans turn into reality and how each policy will interact with the others is uncertain. The risks are obvious. The outcome isn’t.

Enter risk management, a critical concept in finance. Professionals often associate risk with volatility. The tight link makes sense, since owning assets with high volatility hikes the odds of losses if there is a pressing need to sell the asset to raise money.

However, for the typical individual and household, risk means the odds money decisions made today don’t pan out. Managing risk means lowering the negative financial impact on your desired standard of living from decisions gone wrong and when circumstances take an untoward turn.

“Anything that makes reaching or maintaining that more likely reduces your risk, and anything that makes this less likely increases your risk,” writes Bob French, the investment expert at Retirement Researcher. “Everything else is just details.”

The key risk management concept is a margin of safety, a bedrock personal finance idea broader than investment portfolios. It can include having an emergency savings fund, owning life insurance to protect your family and investing in your network of friends and colleagues to hedge against the risk of losing your job. The right mix depends on the particulars of your situation.

In my case, after studying my portfolio, running household money numbers and reviewing lifestyle goals, I’m comfortable with the asset allocation in my retirement portfolio. There is too much noise in the markets for comfort, and market timing is always tricky. The prudent approach with my individual situation is to stay the course.

Finance

Shannon Bernacchia Appointed Interim Finance Director for Regional Schools – Amherst Indy

Published

19 hours ago

November 23, 2024

Press Room

At a Zoom meeting on Friday, November 22, School Superintendent Dr. E. Xiomara Herman recommended to the Regional School Committee and Union 26 School Committee that Shannon Bernacchia be appointed interim Finance Director for the schools, replacing Doug Slaughter who had served in that position since 2019. Bernacchia has served as Assistant Finance Director under Slaughter. Her appointment was approved unanimously by both school committees.

In recommending Bernacchia for the interim director position, Herman cited her “impressive career, dedication, and accomplishments during this transitional period [to a new administration],” adding, “Since joining our district, she has demonstrated exceptional proficiency in managing complex financial operations, including preparing budgets, overseeing audits, and providing detailed financial reporting to the school committee.”

Bernacchia holds a Bachelors Degree in Business Management from Bay Path University and professional training in school fund accounting. She currently holds an emergency School Business Administrator license valid through 2025 and has completed all requirements for her initial license, except for the 300 hours of mentorship. She anticipates completing that requirement in January, 2025. Former Amherst Regional Public Schools and Town of Amherst Finance Director Sean Mangano is serving as her mentor.

Herman expressed confidence in Bernacchia’s ability to head the district’s financial operations.

In acknowledging her appointment, Bernacchia thanked the school committee members and said that she was excited to work with superintendent who is woman.