Author: CP

Short Term Capital Gains:The increase in Short Term Capital Gains tax (STCG) and the indirect increase in Securities Transaction Tax (STT) will disappoint the markets, in our view. On the positive side, the Finance Minister has succeeded in more than meeting his fiscal deficit targets and has forecast a fiscal deficit of only 2.5% of GDP for next year.

Waiver of farm loans – Indian Sub-prime:
The Finance Minister has announced a waiver and a one-time settlement of agricultural loans that will lead to a write-off of loans upto Rs600 bn. While details are still not clear, the Government has said that they will compensate the banks fully for these write-offs.

Autos – gain with excise duty cuts and personal Income tax cuts Autos will gain in the budget with a decrease in excise duty by 4% on small cars, 2-wheelers, buses and CVs. Also, helping autos would be lowering of personal taxes and the impact of the likely announcement of the Pay Commission impact.

Holding companies gain – Double Dividend Taxation set-off
Holding companies can now claim set-off of dividend taxes paid on dividend received by their subsidiaries. This should help companies like Jaiprakash which have presently many SPVs (and in future helps companies like Gammon, L&T etc) as well as finance companies like ICICI, HDFC.

Our Analysts have worked really hard to Digest the outcome of Budget and we are summarizing in a series of posts. To begin with, no major developments for the Indian IT sector out of the proposed India budget. Specifically, the most material element that had been debated was the possibility of an extension on the Software Technology Park (STP) tax holiday, which is set to expire in fiscal 2010. From a longer-tem perspective, we view the increased allocations on education spending and proposed college campus build-outs as a positive for the industry as it helps support the continued growth of India’s labor capacity.

With India’s fiscal 2009 budget behind us, we do not expect much in the way of near-term catalysts. At this point we are left exposed to broader macro trends and sentiment, and await the FY2009 guidance period in April from all the Major IT companies.

Here is a segment-wise breakup of India’s leading equity brokerage houses.

The revenue streams of equity broking firms are undergoing changes, against the background of growing business opportunities and diversified financial services. The major sources of revenue from major players are tabulated below.

Equity Trading:
Brics Securities 85%
Ashika Stock Broking 85%
Motilal Oswal 80%
Arihant Capital Markets 79%
Dalal & Broacha 70%
A F N Langrana Shares 70%
K R Choksey 70%
Zen Securities 65%
Indiabulls 60%

Derivatives Trading:
India Advantage Securities 87%
Crimson Financial 80%
Dolat Capital 60%
Kantilal Chhaganlal 59%
Kunvarji Finstock 59%
R Wadiwala 43%
Angel Broking 43%

Margin Financing
Anand Rathi 8%
Indiabulls 7%
Reliance Money 6%
K R Choksey 4%
Motilal Oswal 3%

E-Broking – Online Trading Marketshare in India
Indiabulls Securities Limited 451,611 clients.
Reliance Money Limited 215678
Motilal Oswal Securities Limited 19065
Unicon Financial Intermediaries Private Limited 13787
Angel Broking Limited 11828
Asit C Mehta Investment Intermediates Limited 9748
SMC Global Securities Limited 7704
Anand Rathi Securities Limited 6793
Doha Brokerage & Financial services Limited 6400
Networth Stock Broking Limited 6120
Bonanza Portfolio Limited 2977
Arihant Capital Markets Limited 2726
Mansukh Securities & Finance Limited 2500
Emkay Share & Stock Brokers Limited 2147
SKI Capital Services Limited 2000
Alankit Assignments Limited 2000