MUMBAI: Middle-class investors will pay tax on dividend income from shares and mutual funds at lower rates, said finance minister Nirmala Sitharaman on Friday, adding that they will have more money in their hands to spend following the proposals announced in the Budget. Sitharaman had proposed dividend income to be taxable in the hands of investors at their income tax slab rates and abolished the payment of dividend distribution tax, or DDT, by companies and mutual funds. In the current system, after the deduction of DDT by companies and mutual funds, dividend becomes tax-free in the hands of investors. However, in the new system, the tax burden on investors in the higher income tax rate bracket increases, while it comes down for people in the lower slab. The finance minister said changes proposed in the personal income tax also puts more money in the hands of the middle class and they are “capable of deciding where to put that without being directed by anyone”. “Eventually, we want to have an income tax framework with low tax rates and easy compliance.” Sitharaman added that the government wants to decriminalise laws. “We started with Companies Act and now we are looking at the Income Tax Act. We want to ensure that civil offences are not treated as criminal offences,” she told newspersons in Mumbai. Before addressing the media, the finance minister, along with her team, held a session with economists, financial services players and professionals for their feedback on the Budget proposals. The government has also proposed to list LIC on the stock exchanges which would “bring retail investors into the picture”. “The IPO of LIC will make issues more transparent,” Sitharaman said. An IPO unlocks value in a company, offers the outfit access to capital markets and makes it disciplined. The LIC stock market launch, when it happens, will be India’s largest IPO. The Budget has also increased insurance cover on bank deposits five-fold to Rs 5 lakh. Deposit insurance, provided by the Deposit Insurance and Credit Guarantee Corporation, an arm of the RBI, had been static at Rs 1 lakh since 1993. The government is working on the Financial Resolution Deposit Insurance (FRDI) Bill, but not sure when it will be tabled in the House, said Sitharaman before heading to Chennai for an interaction with industry captains.
A federal program that tops up provincial revenues in response to sudden economic downturns won’t be getting any changes until at least this spring.
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Finance ministers in Alberta and Saskatchewan say they expected short-term fixes to the fiscal stabilization fund earlier than that and are now wary they will have to wait until after the federal budget to learn about the impact on their own finances.
The program, which has not changed since 1995, provides help to provinces facing a year-over-year decline in non-resource revenues, but the money available to eligible provinces is capped at just $60 per resident.
The fiscal stabilization program is easier to change than the more complex equalization program, and amendments could be worth billions to provinces whose finances have been hit by low oil prices.
Federal Finance Minister Bill Morneau had promised provincial finance ministers at the end of last year that he’d get back to them by the end of January with a process for updating the decades-old program.
How does equalization play a role in western alienation?
How does equalization play a role in western alienation?
In a letter to his provincial counterparts this week, Morneau says he’s now instructed his officials to report back this spring — without a specific date.
The letter said the ideas the provinces put forward on how to reform the fiscal stabilization program are still being analyzed by Finance Department officials, who are reaching out to their provincial counterparts for more information and clarification so the Liberals can understand them fully.
“I have also instructed my officials to provide me advice on potential adjustments to the fiscal stabilization program, including analysis of the potential fiscal risk for the federal government, for consideration in spring 2020,” he wrote in the letter obtained by The Canadian Press.
At the December meeting, the provinces proposed changes to the spending caps, lowering qualifying thresholds for different types of revenue, and retroactive payments for the last five years.
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Morneau pledged to do more to assuage concerns from energy-dependent provinces, particularly in the West where they felt ignored by Ottawa.
His spokesman, Pierre-Olivier Hebert, said the letter to provincial finance ministers letting them know he has asked his officials to review the program with their input in mind is the update he promised.
“Finance officials will provide advice on potential adjustments for consideration in spring of 2020,” he wrote in an email.
Federal Election 2019: Alberta premier calls equalization format ‘fundamentally unfair’
Federal Election 2019: Alberta premier calls equalization format ‘fundamentally unfair’
Saskatchewan Finance Minister Donna Harpauer said she was frustrated and disappointed with Morneau’s letter because the finance ministers expected some “immediate steps” on the program.
“What he committed to at the (December) meeting was that he would let us know the timeline by before the end of January. But the next steps that I’m reading in this letter … is that his officials will kind of work on the program and then provide advice to him some time in the spring,” she said in an interview Thursday.
“There’s still no next steps, there’s still no actionable, there’s no obvious point where decisions will be made that we’re being apprised of.”
Alberta Finance Minister Travis Toews told Morneau in a phone call this week the province is looking for concrete action, according to a spokeswoman.
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“Minister Toews reiterated that while we have appreciated the positive discussions to date, now is the time for action — not just more talk,” Jerrica Goodwin said in an e-mail.
Canada‘s economy grew 0.1 per cent in November, driven largely by higher utility costs and mostly offsetting October’s surprise decline, Statistics Canada data showed on Friday.
Analysts in a Reuters poll had forecast no change after an unexpected 0.1 per cent decline in October. Goods-producing industries and the services sectors both posted a 0.1 per cent gain. Increases were reported in 15 of the 20 industrial sectors tracked by Statscan.
Bank of Canada to assess digital currencies with world’s central banks
Bank of Canada to assess digital currencies with world’s central banks
Unseasonably cold weather in central Canada caused utilities to jump 2.1 per cent in November, the agency said, the largest gain in more than a year.
November’s GDP gain also comes despite notable declines in mining, quarrying and oil and gas extraction, as well as the transportation and warehouse sectors, in part because of an eight-day rail strike at Canadian National Railway, Canada‘s largest railway.
Mining, quarrying and oil and gas extraction, Statscan said, fell 1.4 per cent. Meanwhile, temporary mine closures in the Western Canadian province of Saskatchewan because of weak international demand caused potash mining to decline 18.2 per cent.
Last week the Bank of Canada, which has sat on the sidelines for more than a year even as several of its counterparts have eased, held its overnight interest rate steady but opened to the door to a possible future cut should a slowdown in domestic growth persist.
Stocks are opening moderately lower on Wall Street, following declines overseas, as more worries about the spread of a virus outbreak in China and some weak earnings results put investors in a mood to sell.
UPS sank after swinging to a loss in its latest quarter, and tobacco company Altria dropped after taking a $4.1 billion hit from legal costs related to its investment in the e-cigarette maker Juul.
Coronavirus outbreak: South Korean officials head to Wuhan to evacuate citizens
Coronavirus outbreak: South Korean officials head to Wuhan to evacuate citizens
The S&P 500 fell 10 points, or 0.3 per cent, to 3,262. The Dow Jones Industrial Average lost 61, or 0.2 per cent, to 28,668, and the Nasdaq fell 10 points, or 0.1 per cent, to 9,264. In Toronto, the S&P/TSX composite index was down 28.27 points to 17,483.48.
Shares tumbled in Europe and Asia on Thursday as the impact of the virus outbreak in China expanded to include flight cancellations and other wider precautions to help stop its spread.
Taiwan’s benchmark dived 5.8 per cent as its market reopened after the Lunar New Year. Shares fell in most other markets, with the CAC 40 in Paris dropping 1.1 per cent to 5,890.00 and Germany’s DAX shedding 1 per cent to 13,215.90. In Britain, the FTSE 100 declined 0.9 per cent to 7,415.93.
The death toll from the virus rose to 170, with 7,711 people in China and elsewhere confirmed infected, as foreign evacuees from the worst-hit region in central China began returning home under close observation.
Racism against Asian community rises as coronavirus spreads
Racism against Asian community rises as coronavirus spreads
After world health officials have expressed “great concern” that the disease is starting to spread between people outside of China, Japan’s Nikkei 225 index sank 1.7 per cent to 22,977.75, while Hong Kong’s Hang Seng index skidded 2.6 per cent to 26,449.13.
In Australia, the S&P ASX/200 declined by 0.3 per cent to 7,008.40. South Korea’s Kospi lost 1.7 per cent to 2,148.00. Shares also retreated in India and Southeast Asia. Mainland Chinese markets remained closed for the Lunar New Year holiday.
“With equity markets pumped to juicy levels by the relentless flow of cheap central bank money around the world, unexpected Wuhan-like events leave them acutely vulnerable to potentially aggressive corrections,” Jeffrey Halley of Oanda said in a commentary.
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The World Health Organization was due to meet Thursday in Geneva to consider whether to issue a global alarm that might prompt more controls on movement inside and to and from China, resulting in greater disruptions to businesses and markets.
Boeing expects nearly $19 billion in costs related to the grounding of its 737 MAX jets, the U.S. planemaker said on Wednesday as it swung to its first annual loss since 1997 and indicated it would again cut production of its bigger 787 Dreamliner aircraft.
The Dreamliner widebody is the main source of cash for Boeing as it battles the global grounding of the smaller 737 MAX following two crashes that killed 346 people.
The MAX grounding forced the planemaker to freeze production of the aircraft and let to the ouster of former Chief Executive Officer Dennis Muilenburg.
“We recognize we have a lot of work to do,” Boeing President and CEO David Calhoun said in a statement.
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Boeing ousts CEO in wake of 737 MAX 8 crashes
Boeing ousts CEO in wake of 737 MAX 8 crashes
Boeing shares rose 3 per cent in premarket trading, as some analysts had expected an even larger charge for 737 MAX costs.
The charge includes $8.3 billion to compensate airline customers that are canceling flights and scaling back growth plans in a hit to profits while their MAX jets remain grounded and $6.3 billion for production costs in 2019.
Boeing said it estimated another $4 billion charge in 2020 as it gradually resumes 737 MAX production at low rates.
Core operating loss was $2.53 billion, or $2.33 per share, compared with a profit of $3.87 billion, or $5.48 per share, a year earlier.
Analysts on average expected Boeing to post earnings per share of $1.47 in the quarter, though several had predicted a loss amid a wide range of forecasts due to uncertainties over the cost of the 737 MAX crisis.
Adding to Boeing‘s pain, demand for its bigger and more profitable jet — the 787 Dreamliner — has waned in the face of the U.S.-China trade war, prompting the company to cut production, hurting cash flow at a time when its debt is mounting.
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Boeing, which is producing the 787 Dreamliner at 14 aircraft per month, said in October it expects to lower the production in late 2020 to 12 per month, amid a drought of orders from China.
The company now expects to further lower 787 Dreamliner production to 10 per month in early 2021.
Boeing reported negative free cash flow of $2.67 billion for the fourth quarter ended Dec. 31, compared with a positive free cash flow of $2.45 billion a year earlier.
Applying for a new job often means revamping your resumé — this single page can be the difference between a call-back or silence from an employer.
And while how you format a resumé might depend on the career you’re looking for, there are standards you need to meet, regardless of where you’re applying, said Steve Rohr, a Toronto-based communications expert.
It might seem like a given, but spelling mistakes on a resumé is a common error that can be an immediate red flag to any recruiter, Rohr told hosts on Global News’ The Morning Show.
“You wouldn’t think it … but people don’t spellcheck,” he said. “We just get into our heads … and we don’t do the very basics.”
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Writing and working on the same document for hours or days might cause you to miss small errors, which is why you should have a friend look it over before you submit it, said Rohr.
Be mindful of using a professional email address as well, explained Rohr.
An email address containing nicknames or jokes or gives away your political beliefs, could be an issue, according to a report by The Poynter Institute.
Hiring site TopResume conducted a study in 2018 and found employers were most irritated about spelling errors, missing contact information and unprofessional email addresses.
Rohr also recommends submitting your resumé in the format of a Microsoft Word document rather than in a portable document format (PDF) when applying to larger companies.
“Bigger companies use a software program that scans the resumés … this computer is matching words and phrases to the job description,” he said. “But it has a really hard time reading a PDF.”
At a smaller company, where the boss is doing the interview, it’s probably fine to submit a PDF, said Rohr.
Shorter is sweeter — especially for new grads
It can be tempting to pack as much as possible into a resumé. But a good rule of thumb to stick with is to never go over a page, said Rohr.
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“We want to put everything … we think that everything in our life is so important. It is important, but not for the resumé,” he said.
Unless you’ve had a lengthy, storied career that spans decades, you don’t need to extend the resumé beyond a page, and that’s especially true for recent post-secondary graduates, said Rohr.
Would a career change really make you happier?
Would a career change really make you happier?
Ensuring you’re describing your skills clearly and straight to the point is also crucial, said career expert Susan Murray, chief research officer at the Business Excellence Institute, in a previous Global News report.
“Keep it in three to five bullets related to each role,” said Murray. “What does your LinkedIn say? What does your Twitter say? If you’re able to do it in a Twitter post, why can’t you do the same with a resumé?”
Be forthcoming about your accomplishments
While you shouldn’t lie or exaggerate, it’s important to explain thoroughly what you have achieved, and not leave out service industry work, he said.
“A lot of people leave out the really important ‘work-work’ jobs,” he said. But working at a coffee shop could show you have experience with customer service, representing a business and handling money, Rohr explained.
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“It’s a work ethic. If you were going to school at the same time you were working, that shows me time management as well,” he said. “Don’t be afraid to put the work on your work resumé.”
For more information about crafting the perfect resume, watch Steve Rohr in the video above.
The spread of a new strain of coronavirus from China to at least 16 countries has implications for the global economy, analysts warn. That includes Canada, where one confirmed case and one presumptive case of the new coronavirus have been detected so far.
If the current outbreak follows the course of past health scares, it will only be a temporary bump for the Canadian economy, according to an analysis by BMO economist Sal Guatieri. But that stumble would come as domestic growth has already entered a soft patch.
Typically, global health-care worries send stock markets into sell-off mode, with prices of airlines, restaurants and hotels hit especially hard, Guatieri said in a note published on Friday. At the same time, investors pile into safer assets.
Do Canadians need to worry about coronavirus?
Do Canadians need to worry about coronavirus?
On Monday, Canada’s benchmark S&P/TSX composite index was down about 0.6 per cent in midday trading, while the Dow Jones Industrial Average and the S&P 500 were down around one per cent, erasing a significant portion of their gains for January. Companies that rely on travel and tourism suffered steep losses. Meanwhile, the prices of safe-haven assets like gold and bonds rose.
The stock declines follow equity sell-offs in Europe earlier in the day. Most markets in Asia were closed for the Lunar New Year, with Chinese authorities extending the holiday to Feb. 2 in an effort to keep as many people as possible at home to contain the outbreak.
Lunar New Year celebrations continue under coronavirus scare
Lunar New Year celebrations continue under coronavirus scare
As with previous outbreaks, the new, fast-spreading coronavirus is also rattling commodities markets. Crude oil prices dipped below US$60 (C$78) for the first time in nearly three months on Monday, as reports of more businesses being forced to shut down fuelled expectations of slowing oil demand.
The dip in commodity prices typically has knock-on effects for the currencies of countries with resource-based economies, like Canada’s, Guatieri wrote.
On Monday, the Canadian dollar was trading at 75.78 cents U.S., compared with an average of 76.10 cents U.S. on Friday, which was already a four-week low.
While government moves to contain the crisis and increased demand for health-care services offsets the adverse economic impacts somewhat, “the economy slows nonetheless,” Guatieri said.
In 2003, the spread of SARS shaved 0.66 percentage points off annualized economic growth between March and June that year, according to an estimate from the Bank of Canada. The outbreak caused nearly 800 deaths worldwide, 44 of which were in Canada.
Is Canada doing enough to protect Canadians from the coronavirus outbreak?
Is Canada doing enough to protect Canadians from the coronavirus outbreak?
But the economic impact of SARS and other recent epidemics has been short-lived, Guatieri said.
Stock markets were quick to bounce back once the outbreak appeared to be under control and the number of cases began to fall, with economic activity also recovering rapidly, the report said.
In Canada, the full-year impact of the SARS outbreak was a reduction of a mere 0.1 per cent of GDP, according to the Bank of Canada.
Guatieri also noted the Chinese government is taking decisive steps to control the outbreak and health care authorities have better technology and protocols in place since the SARS crisis.
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And while the new coronavirus outbreak strikes at a time when both the U.S. and Chinese economies are losing steam, economists have also been hoping for that growth slump to ease somewhat thanks to recent progress on trade negotiations with the approval of a “Phase 1” trade deal between Washington and Beijing.
The ratification of the Canada-United States-Mexico Agreement (CUSMA) is also expected to be a boost for Canada’s economy, ending the uncertainty that weighed on cross-border business as the three countries negotiated a trade agreement to replace NAFTA.
The bottom line is “it’s too soon to revise down our growth forecast” because of the latest health scare, Guatieri said.
— With files from Reuters and the Associated Press
U.S. stocks tumbled following a sell-off in markets in Europe and Japan Monday after China announced a sharp rise in cases of a deadly new virus that threatens to crimp global economic growth.
Every major U.S. index gave up a significant amount of their gains for January and bond yields moved lower as investors headed for safer holdings. Airlines, resorts and other companies that rely on travel and tourism suffered steep losses. Gold prices rose.
Investors are in a “sell first, ask questions later situation,” said Alec Young, managing director of global markets research at FTSE Russell.
The S&P 500 index slumped 1.4% as of 9:46 a.m. Eastern time. The Dow Jones Industrial Average dove 420 points, or 1.5%, to 28,571. The Nasdaq fell 1.7%. The Russell 2000 index of smaller company stocks fell 1.2%.
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Lunar New Year celebrations continue under coronavirus scare
Lunar New Year celebrations continue under coronavirus scare
Most markets in Asia were closed for the Lunar New Year holiday, but Japan’s Nikkei fell 2.03%, its biggest decline in five months. European markets also slumped. Germany’s DAX dove 2.4%.
Chinese health authorities have confirmed 2,744 cases of the coronavirus along with 81 related deaths as authorities extended a week-long public holiday by an extra three days as a precaution against having the virus spread still further. Despite the lockdown that has expanded to 17 Chinese cities, the coronavirus has spread to a dozen countries, including the U.S.
Global health authorities are increasingly on alert for any new cases. Besides the threat to people’s lives and health, investors are worried about how much damage the virus will do to profits for companies around the world.
Even if they’re thousands of miles away from Wuhan, the interconnected global economy means U.S. companies have plenty of customers and suppliers in China. It’s the world’s second-largest economy, and it accounts for 6% of all revenue for S&P 500 companies over the last 12 months. That’s nearly double any other country besides the United States, according to FactSet.
“Markets hate uncertainty, and the coronavirus is the ultimate uncertainty in that no one knows how badly it will impact the global economy,” Young said.
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Resort operators are reeling as the lockdowns in China directly threaten their businesses. Wynn Resorts fell 6.3% and Las Vegas Sands shed 6.6%. Those companies get the majority of their revenue from the Chinese gambling haven of Macao. MGM Resorts fell 3.8%.
American Airlines fell 6.7% and Delta slipped 3.9% as part of a broad slide for airlines because of concerns international travel will decline amid the virus’ spread.
U.S. to evacuate citizens from China due to coronavirus threat
U.S. to evacuate citizens from China due to coronavirus threat
Booking companies and cruise-line operators are also getting hurt. Expedia Group fell 3.5% and Carnival fell 3.7%.
Technology companies and banks were also among the losers in the early going. Apple, which relies on China for supplies and sales, slumped 2.6%. Citigroup fell 2.1%.
Energy stocks fell broadly as oil prices slipped 1.6%. Schlumberger fell 3.7%.
Utilities and real estate companies held up better than most of the market. Both sectors are viewed as less-risky and are little-affected by international issues and developments.
Investors are also dealing with a heavy week of corporate earnings. Apple will report financial results on Tuesday. Pharmaceutical giant Pfizer and Starbucks will also report.
Boeing, McDonald’s, Coca-Cola and Amazon are also among some of the biggest names reporting earnings throughout the week that includes 147 S&P 500 companies.
BENGALURU: Flipkart co-founder Sachin Bansal has said that he will deploy all the proceeds from the sale of his stake in the e-commerce player into his financial services venture Navi Technologies, which has applied for a universal banking licence with the Reserve Bank of India (RBI). The financial services firm has sought the licence through a step-down subsidiary.
Bansal could likely invest $400-450 million in the new venture, according to estimates, which will likely make it one of the biggest equity infusions by a promoter into a new financial services venture. “I am putting almost all of mine (money) — that is going to happen in the next few days or weeks, whatever is left after Ola investment. All eggs in one basket,” said Bansal in an interview to TOI, while not commenting on exact numbers. The total amount is likely to be invested in multiple tranches.
The 38-year-old IIT-Delhi graduate, who had started Flipkart in 2007, is also adding more heft to his new venture by roping in former RBI director and ICICI Bank top executive Nachiket Mor, who was till recently head of Bill & Melinda Gates Foundation in India. He has also roped in as an adviser Paresh Sukthankar, the former deputy to HDFC Bank CEO Aditya Puri, who had worked at India’s largest private sector lender since its inception in 1994.
Bansal had agreed to sell his over 5% stake in Flipkart to US retail giant Walmart in 2018 for about $1 billion, out of which he will get $750-800 million after tax. Out of this, Bansal has invested $300-350 million in companies like ride-hailing major Ola and electric bike maker Ather. He has also put some capital in treasury operations, including debt papers of companies like Piramal Enterprises.
According to Bansal, regulators are “very open to new ideas” and the reason why he has applied for a universal licence rather than a small finance bank is that he wants to operate across multiple sectors.
“If you think like a consumer tech company rather than a traditional financial services company, you can solve some big problems,” said Bansal. He added that for India to become a $5-trillion economy, the GDP-to-credit ratio has to improve to 100% from the current 57%.
Last year, Bansal had acquired microfinance company Chaitanya Rural Intermediation Development Services (CRIDS), whose subsidiary Chaitanya India Fin Credit (CIFCPL) has applied for the banking licence. While Bansal had acquired CRIDS in his personal capacity, he is in the process of moving the investment under Navi Technologies. The last two players to get a universal banking licence in India were IDFC First Bank and Bandhan Bank, who had applied in 2013 along with 23 others and got an in-principle nod after 10-11 months in 2014.
“We will keep the smartphone at the centre of consumer experience, rather than an add-on,” Bansal said. He indicated that currently, it’s the other way round with branches being the centre of focus, and mobile apps also crash at the start of the month, underlining how there is a gap in technology capability at big players. While Chaitanya will continue to focus on the lower end of the market, Bansal also plans to launch a new product under the Navi brand, which will focus on digital lending for the middle-class. Banking through digital channels has been growing at a record pace. According to RBI data, from September 2018 to October 2019, retail digital transactions by value saw a jump of 21% at Rs 302 lakh crore compared to around Rs 250 crore in a year-ago period. Bansal is also in the process of acquiring DHFL Insurance and Essel Mutual Fund to develop plays in the insurance and asset management plays.
Both deals are yet to receive regulatory approvals. Bansal said that Navi will raise additional capital from three-four outside investors, including World Bank arm IFC, which is investing $30 million at a valuation of $650-700 million, as TOI reported on January 10. In total, Bansal could be raising $150-200 million from outside investors, according to two sources, though Bansal declined to comment on numbers. “We are looking for people who bring that expertise (financial services). IFC is definitely one of those names. In the 1980s, they were the first investor in HDFC, not the bank but HDFC Ltd. They were investors in almost all the banks who got a licence. So, they have tremendous experience in building banks, not just in India but outside India also. Not just banks but for insurance companies, stock markets in Africa. So, that’s a great set of capabilities we get access to,” he added.
