You must have received those messages or calls about stock tips from random numbers. The stock market is in a "hope" frenzy right now and so are the scams around it.
Here is a very basic idea of how a stock market call scam works:
Scammers will buy 20,000 mobile numbers of the people who actively trade and have less history of trading (relatively new Demat accounts) than vendors.
Divide them into two groups of 10,000 and send them tips for the same stock but "buy" recommendation to one group and "sell" recommendation to the other.
One of them turns out correct, of course. Divide the group that received the right recommendation into two more groups and send them another recommendation, "buy" to the first and "sell" to the second.
Repeat this five times and you have 625 people who got the correct recommendation 5/5 times and 625 people who got the right call 4/5 times (which is still very good!).
Many from these 1250 people can be used to take advantage of - in the next call - in a way that benefits the scammer.
Here is how one of the many schemes, "Pump and Dump" works:
Suppose Harshad (pun intended!) is doing the pump and dump and Rakesh is one of the 1250 people who is going to be scammed.
Harshad will buy some small-cap or penny cap stock (since it has low volume and market cap, buying even a small amount will push the price up). He'll keep doing this for a while and spread the message that he's doing it. He'll also spread good rumors about the company which motivates others to buy.
*Penny stocks are mostly offered by companies with lower market capitalization.
At last, fake "buy" calls, SMSes, e-mails, messages on Whatsapp and Telegram follow. These calls go to people like those 1250.
Now imagine instead of 1250, this was 12.5 lakh people.
Lesson
Rakesh is naive. Don't be like Rakesh. Almost 999 out of 1000 messages or calls on stocks are fraudulent, don't follow them. Do your research before investing. Follow the advice of people who are qualified to offer it. Check credentials.
G7 tax policy and reforms
On June 5, the G7 nations reached a historic and perhaps an overdue agreement.
The agreement is to make the big international companies of the world pay up and bring forth tax equality to level the playing field.
What is the G7?
The Group of 7 (G7) is an informal collective of some of the wealthiest & advanced economies comprising - Canada, France, Germany, Italy, Japan, United Kingdom and the United States.
The G7 represents over 46% of the global GDP and can boast of accounting for upwards of 62% of the global net worth or a total of $280 trillion.
G7 2021
The 47th G7 Summit is to be held from June 11-13, 2021 and will be presided over by the UK. On June 5, under the chairmanship of the UK Chancellor Rishi Sunak, the G7 shook on the Global Tax Reforms Policy which he likes to call a “Tax Policy fit for the 21st Century”. He also mentioned the policy design stresses to ensure that “The right companies pay the right tax in the right places”.
Key takeaways of policy
MNCs will pay taxes in their physical place of business and not just their home country
Only global giants with a profit margin greater than 10% are scoped
20% of any profit over this 10% will be taxed in the country of sale
Finally, and perhaps the most revolutionary agreement has been to fix a Global Minimum Corporate Tax of 15% in the country of Operation.
This means that the MNCs will no longer be able to set up operations in developing or poor countries with low tax rates and enjoy tax holidays.
Interestingly, Amazon is not expected to be caught by this element of the reform
A communique from G7 ministers said that they envisaged that the rules would only apply on “profit exceeding a 10% margin for the largest and most profitable multinational enterprises”, a restriction that could rule out Amazon.
Amazon's profit margin in 2020 was only 6.3%.
The G7 Summit 2021 calls for a special mention since it marks a cornerstone moment in world history. It was at this summit that the first steps towards suspending oppression of the “weak” at the hands of “strong” were taken. Will the balance of power now finally be restored? Or will the Big Daddies of the world find yet another loophole?
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