2018 Yearender: Good, Bad and Ugly of 2018

Investors would be more than happy on Monday, December 31, to bid good-bye to a testing and tumultuous year 2018. As a farewell note to the year that tested our patience, DSIJ looks at the Good, the Bad and the Ugly events of 2018. 

The Good:

Lower crude oil prices
Crude oil prices remained high for the most part of the first half of 2018 but have been falling since October after two successive years of uptrend. In all oil price have dipped about 20 per cent in 2018. Although globally lower oil prices are seen as a negative trait, in India a dip in oil helps the India rupee as well as the economy because crude oil used for manufacturing and freight adds significantly to the input cost of various industries.

Lifeline for PSBs
Recapitalisation bonds for state-owned banks announced in 2017 reached the banks starting January. Bonds worth Rs. 88,000 crore were infused in the first tranche, followed by Rs. 41,000 crore towards the end of the year. Government also initiated a merger of three listed public sector banks; Bank of Baroda, Dena Bank and Vijaya Bank. Government has also asked the state-owned insurer LIC to increase its stake in IDBI bank to 51 per cent from 11 per cent, thereby lending a helping hand to the ailing PSB bank.

Ease of doing business
With the implementation of GST and other business-friendly initiated by the government, the country's ranking in the World Bank's Doing Business 2018 report, improved by 23 places to 77th position. Hopefully, this will usher new investment from global entities in the new year.

GST rates revision
The central government has made a downward revision of GST rates and to add to it. Government has clearly stated its intention of bringing almost all items under the 18 per cent slab, barring luxury and sin goods. In its recent revision government cut down GST rates on more than 23 good and services on December 22. 

The Bad:

LTCG tax
The news that hit the stock market most in 2018 was the announcement of the new long-term capital gains (LTCG) tax, wherein a levy of 10 per cent was introduced on the gains above Rs. 1,00,000 on holding assets for a period greater than one year.

Recategorization of MFs
In a bid to big more sense to the way mutual fund houses invested their money in the stock market, 
SEBI's set new norms to avoid duplication of MF schemes and to asked fund houses to recategorise schemes into five broad-based categories; equity, debt, hybrid, solution-oriented and others. The rules state that MF houses can only have one mutual fund under each category. This changed led to the renaming, merger and realigning of various MF's investment pattern.

Resignation of Urjit Patel
RBI governor Urjit Patel's resignation put the Indian economy in a bad light. The governor resigned after a series of stalemates between the Reserve Bank of India and the central government. Government wanted RBI to pay a higher dividend and ease lending restriction imposed on weak banks. Government has somehow managed to save face by instilling Shantikanta Das as the new governor of RBI.

The Ugly:

Nirav Modi Scam