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• L&T Technology Services, which had received a BUY rating from 5/7 brokerages, listed at a premium of 7% over its offer price in stock markets today. The price has ticked down slightly as of 12:00 pm, currently trading approximately 4.4% higher at Rs. 897. The stock performance is faring better than the previous L&T subsidiary that listed in July. L&T Infotech had been over-subscribed by nearly 12 times and had listed 6% below its issue price of Rs. 710, and has yet to cross it's issue price on the stock market. 

• Those wary of government interference in India's Central Bank can heave a sigh of relief today, now that the three new appointees to the Monetary Policy Committee have no government representative to push the agenda. The Modi government's new appointees to the MPC - which trims the wings of the RBI Governor, requiring interest rates to be decided by committee - are three professors, including Ravindra Dholakia of IIMA, who has been a critic of former RBI Governor Raghuram Rajan's policies. 

• The Supreme Court has sent Subrata Roy back to jail. Roy has been on parole since May, the handcuffs came off first on humanitarian grounds due to the death of his mother and later for him to arrange money for his investors. The SC however refused his latest request for parole extension. 

• How bloody is the battle for market share going to be in the telecom sector? Vodafone's international arm has just put a lot more money into Vodafone India's wallet, giving it a Rs. 47,700 crore cash infusion ahead of the spectrum bid that begins on October 1. This is at a time when worry about market growth has reached new heights - data revenue growth for existing operators have slowed considerably from last year, with Airtel's expanding at just 4.5% in the June quarter, and Vodafone's shrinking to 22% compared to last year's 65%.

• Photo of the day: Mumbai on alert, with NSG and Force One sent to the city after schoolkids spot armed men in Navi Mumbai. Firstpost

• The rich list for 2016: the topper of Forbes India's wealthiest is no surprise, with Mukesh Ambani coming in at No. 1 with $22.7 billion net worth, nearly $6 billion more than Dilip Shanghvi at number 2. For context, that wealth difference between the No. 1 and 2 ranking would rank 15 on the Forbes list. The Modi government's boost to infrastructure have benefited cement and paints, which have helped a couple of new entrants - Benu Gopal Bangur of Shree Cements and Ashwin Dani of Asian Paints - reach the list. Forbes

• Indian markets have bounced back up after both the US Federal Reserve and Bank of Japan kept their key rates unchanged; however the US Fed also said that they may raise rates at the end of the year. Markets are likely to remain cautious in the wake of India-Pakistan tensions, and how these develop over the next few days. Social media exploded over the past few days since the Uri attack, with some Indians appealing for calm while other users such as Sanjay Dixit conducted polls on what weapons India should respond with. 

• Karnataka CM Siddaramaiah responded to the Supreme Court ruling directing the government to release more water to Tamil Nadu by saying that the order is not possible to implement, and has instead decided to convene a session of both houses on September 23 to take a decision on the issue. The order by the Supreme Court will, based on our calculations make it impossible for Karnataka to meet the drinking water needs of the state. 

• Income Tax officials are targeting small eateries and roadside businesses, raiding their premises and asking them to declare their black money under the Income Declaration Scheme. Some estimates put the cash seized from store premises in Mumbai at Rs. 2 crores. ET

• Photo of the day: A demon awakes, as artisans dress up a model of Kumbhakarna in preparation for a carnival in Chandigarh. Reuters

#DATAVIEW: The Supreme Court order on Kaveri water-sharing with Tamil Nadu is going to affect the state adversarily due to the longer-term impact this year on drinking water supply. Forget the news of lost business due to the Bangalore bandh and protests after the initial SC ruling. The September 20 SC ruling hurts Karnataka in a drought year by leaving far less than what is required for drinking water to Bangalore, and the rest of Karnataka. 

The chart above (click to view)gives a deficit estimate if even the earlier order for 3000 cusecs of water to Tamil Nadu is fulfilled - Bangalore and the state would face a deficit of 6.72 TMCT (thousand million cubic feet) of drinking water based on water requirements till May 2017. The Supreme Court ruling yesterday doubled that amount to 6000 cusecs, which would bring Karnataka's drinking water deficit to 9.4 TMCT of water. 

While many in Karnataka are protesting the SC ruling, the fact remains that the SC's elbow room is limited due to the 2007 Tribunal ruling that Karnataka release 90 TMCT of water to Tamil Nadu every year. This being a drought year, Karnataka is seeing shortfall in rain, and the reservoirs are 75% empty.

The water in Karnataka's reservoirs is now at 26 TMCT. The release to TN would bring it to 19.2 TMCT. Bangalore and the rest of Karnataka need 30 TMCT of water until May 2017, when the next rains come. The deficit means that Bangaloreans and the rest of Karnataka are in for a dry summer.  It's why the Karnataka government is insisting today that the SC order is "unimplementable". 

• Two US lawmakers have released a bill to designate Pakistan as a terrorist state. The bill says that its time "the US stopped paying Pakistan for its betrayal" in its continuing support of international terrorism. ET

• Three weeks after Jio announced its disruptive tariffs, Airtel, Vodafone and Idea haven't lowered prices of their own offerings. Airtel has suggested that they may wait to take a decision on tariffs only at the end of the year, once Jio's free services come to an end. For now customers of Jio competitors are seeing response on a case by case basis, when they make mobile number porting requests. In such cases, Airtel, Vodafone and Jio are offering these customers higher usage plans at lower prices. LiveMint

• NSEL director Jignesh Shah was arrested by the CBI following raids at his home and offices. The federal agency also carried out searches of five current and former SEBI officials. The FIR filed by the CBI names these SEBI officials as part of their investigation. BS

• The price war has begun for this festival season, as Snapdeal takes on Flipkart with the 'Unbox Diwali' sale which starts on October 2. Flipkart will begin its sale over the same period, starting October 1. Both retailers will be announcing discounts upwards of 70%. Amazon has yet to announce its discount sale dates. Firstpost

• Photo of the day: A woman lights a candle as part of a tribute to soldiers killed in the attack on an Indian army base in Kashmir's Uri. IE

• The draft prospectus for the NSE IPO is expected to release within the next six months. Bankers are asking investors to sell their holding in the bourse’s proposed initial share sale at a price that values the NSE at Rs 45,000 crore - 30 times the projected earnings for FY 2018. This valuation is 2.5 times the level the NSE was assessed at when SBI sold 5% of its stake in July. LiveMint
• Shares of Heritage Foodshave hit a record high on reports in the media that Future Group is in talks to acquire the retail arm of the company. The stock has surged over 70% since mid-July, outperforming the market. The Exchange has sought confirmation from Future Group on news of the talks. BS
• The French power company EDF plans to pump over $2 billion into the Indian energy market, betting big on renewable energy. It predicts that energy tariffs will fall 30% on the back of renewable energy efforts over the next five years. EDF is also in discussions on Indian nuclear energy projects, for which it has initial agreements with NPCI.  ET
• Carmakers including Maruti and Hyundai are offering big discounts on their older models, to adjust to demand that is focusing on their newer cars. The expectation is that the festive season will see many first-time buyers on the back of government pay hikes. Companies are betting on buyers preferring highly discounted older models during the auspicious season over being waitlisted for a new version for several months. FE
• Photo of the day is a sleeping lion: A lion rests in the Maasai Mara reserve, Kenya. Reuters
  

• Mega IPO time: ICICI Prudential, the biggest IPO to hit the markets in six years kickstarts today. Investors had bid for over four lakh shares within the first 10 minutes of the bidding process. The issue has received 0.30 per cent subscription against the issue size of 13.23 crore shares. Analysts are viewing this IPO as a long-term hold, rather than a purchase for listing gains. ET
• The battle between telecom giants escalated, with Airtel responding to Reliance Jio's accusations, saying that Jio is attempting to blame others for its own connectivity issues. Airtel says that Jio's massive dropped calls is due to its own technical issues, and not because Airtel failed to provide sufficient interconnect points. BS
• While Ola is looking at adding more cars on the road to increase capacity, Uber in India is increasingly looking at peer-to-peer cab hailing, where anyone who owns a car can sign up with Uber to pick up and ferry passengers. This may be a risky strategy in India where safety issues are an ongoing concern. LiveMint
• The Modi government is considering an early session of Parliament, in the first week of November, to pass the GST bills. The two bills are supporting legislations to the bill already passed, and will pave the way for implementation of GST by the Finance Ministry. Firstpost
• Photo of the Day: Onlookers after an explosive device went off in New York's upscale and bustling Chelsea neighborhood, injuring 29 people, none of them in a life-threatening condition. Bryan Smith/AFP
  
  

• After ICICI Bank, textile firm Raymond is next in hiring robots to replace 10,000 workers in its manufacturing units over the next three years. The company estimates that one robot "could replace around 100 workers". ET
• Infosys may slash its revenue guidance again, according to CEO Vishal Sikka. The company is battling the headwinds of lower demand in the banking and finance sector, and cancellation of projects from clients like the RBS. BL
• The war continues: Reliance Jio is now accusing other telecom operators of refusing to help customers who want to port their mobile number to Jio. In a letter to TRAI, Jio pointed out that such actions are illegal, and "a deliberate breach of license conditions". LiveMint
• Welspun (currently trading below its 30 day SMA) is facing two class action suits in the US worth $5 million each over "widespread fraud" in the thread count of its bedsheets and towels. India's largest home textile manufacturer has seen its market value plummet by about half after Walmart pulled its products from its stores, and other clients are reviewing Welspun-procured items. BS
• Photo of the day: DMK workers and leaders court arrest during today's day-long bandh in TN. Hindu
   

   

• Another big IPO is coming in October, with PNB Housing Finance planning to launch a Rs 2,500 crore listing, the second largest in 2016 after ICICI Prudential's upcoming Rs, 6,000 crore IPO. In 2015-16, it reported Rs2,699.54 crore revenue, a jump of 51%. LiveMint
• The Reliance Communications announcement, of the merger of its wireless operations with Aircelpushed shares up in early trading. The combined firm will be worth over Rs. 65,000 crore, and the second-largest spectrum holding in India. Reliance Communications just reported a net loss of Rs. 559 crore for the June quarter. FE
• Apple and Google are battling the government over adoption of Aadhaar-based fingerprint and iris-scan authentication into their systems. Government officials had invited executives from Apple, Microsoft, Samsung and Google to discuss embedding Aadhaar encryption into their software and devices. Apple didn't show up at the meeting. BS
• A Rs.20,000 crore outlay in advertising is coming up for the festival season, a 12% increase from the previous year. Two-wheeler and consumer durable companies targeting tier 2 and tier 3 cities are expected to lead the ramp-up in spending. ET
• Photo of the Day: Devendra Jhajharia wins two golds in the javelin throw and breaks the world record at the Rio Paralympics. IE

The graph tells the story. In terms of returns on asset classes in India for long term investments, equity funds win out easily, over real-estate and fixed deposits in the long term, and significantly over gold in the five year term (data for all assets adjusted for tax payouts). 

The 'real-estate mindset' versus the 'stock market mindset'

Equity mutual funds deliver better results than other asset classes over the long term, but you can't shake the commentary you hear from people when they talk about the stock market: "I lost money," someone will usually say, and tell you the particular stocks that took them down and wiped out their investments. So why doesn't the data bear this out? 

The challenge for many investors is the focus many have on 'playing the market'. A booming stock market attracts great news coverage, big-name IPOs start listing, attracting new investors. This is part of the attitude problem: rather than seeing equity as a place to safely park our money for the long-haul, we see the stock market as an opportunity, a near-gamble, investing when there is buzz and the returns are high - when the market is peaking. Then the low comes, panic sets in, and investors pull out. This is counter-productive behavior, and it is also the opposite of how we approach real estate. When we are purchasing land or apartments, we are highly conscious of the rate per square feet, the quality of the location, the closeness to metro stations and markets. We take our time, evaluate, make sure we are getting the bang for our buck. 

And once we buy, we don't pull out easily. We sell land and for that matter, gold, when we are pushed to. We don't rush to dump an apartment when prices are low, instead we wait till the prices recover. But we don't behave similarly when investing in the stock market. And this is despite the fact that a single investment in real estate is usually upwards of six figures. 

The investment size

Our behavior in real estate is more rational even though we spend a lot more. Regular investors tend to put money in the range of Rs. 5,000 on a stock they are bullish about, while home EMI outlays in India easily go over Rs. 10,000 a month. The nut then is this: Indians put in more money, and hold on for longer on an asset class that has shown over and over, to give lower investments compared to equity funds. 

The downside of daily tracking

Sure, daily tracking gives you great transparency on your investment. But which homeowner knows the value of their flat or plot on a day to day, or hour to hour basis? When an equity investor keeps seeing red in his portfolio day after day, its tempting to finally take the step of dumping the investment, thus falling into the trap of selling when things are low, rather than high. 

If we invest in stocks with the 'real estate mindset', we will see the returns that we are looking for. In the case of the stock market, it simply doesn't pay to 'play' it or 'live in the moment', and flee when the market falls. We need to treat this investment the same way we have treated our other assets, to see worthwhile rewards. 

Returns, adjusted for tax payouts. September 2016.