The Tribune, Chandigarh, India

	Stock market losses make savings account returns look attractive New Delhi, October 2 Once known as a place to make quick and big money, the stock market has turned into a losing proposition for investors, with the returns not only worse than high-flying gold and silver, but even deposits lying in savings bank accounts. Making them the worst Asset class among all major investment avenues, stocks have given a negative return of about 20 per cent in the past one year, going by the performance of the stock market’s benchmark index, the Sensex. An analysis of returns from different investment classes shows that investors in assets like gold, silver and even bank and corporate deposits, on the other hand, have reaped rich dividends from the money they put in. Savings bank accounts also earn the depositors an annual interest of 4 per cent, while the fixed deposits of banks and various corporate deposits are giving investors an annual return of an average 9-10 per cent. The analysis shows that the silver has been the best performer, with an over 60 per cent return in the past one year, followed by about 40 per cent from gold. The sharp under-performance of stocks was even worse till a few days ago, as gold and silver prices have gone through a significant correction and the stock market has witnessed a few bouts of recovery in the recent past. An analysis of returns from investments made in different investment classes in January, 2008, when the stock market began its downslide after scaling life-time peaks, shows that the losses in stocks, including those of large-cap companies, are huge. An investment of Rs 1 lakh in shares of Sensex companies, the top 30 firms of the Indian stock market, made in January, 2008, is now worth less than Rs 80,000, as per the performance of the blue-chip index, which has fallen by about 22 per cent from the near 21,000-mark at that time to the 16,500-level. A similar investment in the country's top 500 companies has fared even worse, with the loss amounting to nearly Rs 30,000. On the other hand, investments of Rs 1 lakh in gold and silver during the same period have more than doubled in value to over Rs 2.4 lakh and Rs 2.6 lakh, respectively. From Rs 11,000 per 10 grams in January, 2008, gold prices have risen to nearly Rs 26,650, while silver prices have surged from about Rs 20,000 per kg to Rs 53,000 per kg now. An investment of Rs 1 lakh in bank fixed deposits or corporate deposits in January, 2008, would also have earned investors a return of over Rs 30,000. — PTI MAXIMISING RETURNS An investment of Rs 1 lakh in shares of Sensex companies, the top 30 firms of the Indian stock market, made in January, 2008, is now worth less than Rs 80,000 Silver has been the best performer, with an over 60 per cent return in the past one year Gold prices have risen by 142 per cent since January, 2008, while silver has risen by 165 per cent during this period.
	Health insurance portability to promote better product New Delhi, October 2 With the implementation of health insurance portability service from tomorrow, insurance companies believe that it would result in better product and services offerings to policyholders. “This move marks an inflection point in the Indian health insurance industry. This will lead to improvement in customer service levels,” Max Bupa Health Insurance CEO Damien Marmion said. Bajaj Allianz General Insurance Company Head (underwriting) T A Ramalingam, said: “Now insurers will not only be required to offer the best price but also enhance the service levels. Customers would opt for a change in insurer only if they are not satisfied on the service front,” Ramalingam said. Portability would ensure that all companies look at improving service levels. Competition for retention of good customers will also rise, Ramalingam added. Portability will enable transfer of the credit gained by the insured for pre-existing conditions and time bound exclusion, if the policyholders chooses to switch from one insurer to another insurer or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break. If the insurance company does not communicate its decision to the requesting policyholder within 15 days of providing all details, it said, the insurance company shall not retain the right to reject such proposal. — PTI SWITCHING INSURERS Portability will enable transfer of the credit gained by the insured for pre-existing conditions and time-bound exclusion, if the policyholders chooses to switch from one insurer to another insurer or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break.
	BSNL may get Rs 5,503 cr more to build defence communications New Delhi, October 2 State-run BSNL may get an additional Rs 5,503 crore from the Department of Telecommunications (DoT) to establish an alternate communication network for defence services, enabling the vacation of Spectrum by the Armed Forces. The budget estimate approved by the Cabinet Committee of Infrastructure (CCI) for this purpose in December, 2009, was Rs 8,098 crore. The total cost of the project, including two years' maintenance support by BSNL after the network is fully integrated, is Rs 13,601 crore, according to sources in the DoT. The additional impact on the estimated cost of the project would be Rs 5,503 crore, inclusive of all duties and taxes and two years' maintenance support, over-and-above the Rs 8,098 crore expenditure earlier approved. The project was to be implemented in 36 months (completion by December, 2012). However, the timeline is to be decided afresh because of delays in implementation. A Memorandum of Understanding between the defence and telecom ministries for vacation of spectrum was signed two years ago. Both ministries had agreed on achieving targets in a time-bound manner. — PTI
	Tax Advice Service tax is not deducted, but charged by a provider by SC Vasudeva Q: Can we claim service tax deducted by bank on conversion of Foreign currency from EEFC to Current A/c. Since we are Exporters and we are eligible for claim of services used for Export. — Sameer Chawla A: Service tax is not deducted but charged by a service provider. Such tax paid by the receiver of the servicer can be utilised to claim adjustment against service tax payable by the receiver of the servicer provided he is allowed to do so in accordance with the provisions of law applicable for chargeability of such tax. An exporter of service may not be liable for service tax subject to the compliance with the law on the subject. In such a case, an exporter may also be claim a refund in accordance with the provisions of law on the subject. Use of HUFs Q: I want insurance of my son but want to pay the premium out of my Hindu Undivided Family (HUF) funds. Will my HUF get the rebate u/s 80C. Please note that my son has got his own HUF also. — Ramesh Marwah A: A deduction in case of premium of amount paid to effect or to keep in force an insurance on the life of a member of HUF is deductible under section 80C of the Income-tax Act, 1961 (The Act). The amount of premium paid by HUF to effect an insurance policy on the life of member of the HUF would thus be covered within provisions of section 80C of the Act. The amount of premium can be paid by either of the HUF as your son should be a member og both the HUFs. The author can be contacted at info@scvasudeva.com
	personal finance Gold goes electronic Planning to buy gold for a marriage. Balwant Jain, Chief Financial Officer, Apnapaisa.com explains the costs associated with the process and says buying gold in electronic form scores over traditional methods of accumulating the Asset Indian marriages are unthinkable without gold and it constitutes a significant proportion of expenses in a marriage. The most popular way of buying gold, which has been followed by our ancestors is handing over gold as jewellery to the daughter keeping in with the tradition. This is regarded as stree dhan, but when any woman wants to capitalise on this gold jewellery she gets less returns than expected. Here, jewellers conveniently deduct the making charges and then there is differential in purchase price and selling price of gold also which is close to 4-5%. In addition to price difference, there are concerns on purity and storage cost also, in case of jewellery. Over a period of time, alternate channels have evolved like buying gold coins and bars from banks and many corporates like TATA also ventured into jewellery with launch of Tanishq which gained popularity in no time. There are several costs involved with buying gold in physical form (as coins, biscuits, bars or jewellery) either from banks or jewellers. Though banks sell gold coins, they do not offer to buy back gold. There is way out which can address these issues and enable your dear daughter to get better returns. It certainly adds value to this Asset class, if you buy gold in electronic form. I will tell you how electronic mode scores over physical mode for accumulating gold over a longer period of time for buying gold in small quantity. With the electronic medium, you can choose from electronic modes like Gold Exchange Traded Fund (ETF) , Gold Funds and e-Gold also. Since electronic form of gold is a cost-effective option and it takes care of purity and storage concerns, it scores over physical mode. For buying gold in electronic form, there are two routes — Mutual Funds and e-gold offered by National Spot Exchange. Mutual funds offer two products. The first of these is the Gold ETF. This can be traded on the Stock exchanges where you can buy and sell gold with your existing stock broker and through a demat account. In addition to the brokerage cost payable at the time of purchase and selling, 1% is charged by the mutual fund houses as fund management expenses for managing the scheme. This, reduces the return on investment by approximately 1% over returns generated by gold the underlying asset gold. In addition to Gold ETFs, you can purchase units of gold Funds from the mutual funds directly. These schemes in turn invest in the gold ETF schemes of their fund houses only. These offer the convenience of investing without having a demat account and also let you invest a fixed sum of money through a Simple Investment Plan (SIP) and take the benefit of rupee cost averaging. You cannot take physical delivery of gold against your units unless you have units equivalent to 1,000 gram. e-Gold is most the recent fad, where you can accumulate gold in small quantities over a period of time. e-gold units purchased by you through National Spot Exchange Ltd are fully backed by equal quantity of gold. However, in the case of gold ETF where the investment in gold may not necessarily be exact equivalent to the number of units issued by the mutual fund. Moreover you can always take physical delivery against your e-Gold units in convenient denominations. Physical delivery of gold against your e-Gold units does not amount to transfer and thus does not attract capital gains tax. Since gifts between close relatives is fully exempt without any limits, you can gift the jewellery to your daughter without having any income tax implications. I hope that now you know that buying gold electronically provides you an opportunity to accumulate gold over periods co-terminating at the time of marriage of your daughter/son with cost advantages attached to it. Views expressed are the author’s own
	Truncated but action-packed week likely Arun Kejriwal The markets last week behaved as expected and rallied strongly from Monday mid-session and lasted till Thursday afternoon. The markets tried to break the intra week high of Thursday but failed and there was a very sharp selloff on Friday. The BSESENSEX gained 291.70 points or 1.80% to close at 16,453.76 points, while the NSENIFTY gained 75.50 points or 1.55% to close at 4,943.25 points. The broader markets like the BSE500, BSE200 and BSE100 were all gainers with gains of 0.46%, 0.67% and 0.98% respectively. The BSE MIDCAP and BSE SMALLCAP were big losers with losses of 1.5% and 2.27%. The week has been volatile and was event driven. The crisis in Europe is as yet unresolved even though Germany has agreed to support and increase contribution to the emergency fund. Oil, gold and silver continue to be volatile and have suffered significant losses during the week. In India, political news has driven stocks particularly people linked with the 2G scam. Shares of the Reliance ADAG group were big losers and so was Sun TV from the Maran group, which is apparently involved in the Maxis –Aircel deal. Yet another big loser was Vijay Mallya’s Kingfisher airlines after people did not like the proposal of doing away with Kingfisher Red, the low-cost business and the fund raising proposed by the group. Mining shares were hammered out of shape after the government said that mining companies would have to share 26% of profits with locals. The draft mining bill has been introduced and shares of companies like Coal India and Sesa Goa were big losers. Coal India lost Rs 33.45 or 9.13% to close at Rs 332.75. Sesa Goa lost Rs 8.20 or 3.95% to close at Rs 199.50. The gainers in stocks were the IT companies on a depreciating rupee with Infosys up 8.29% and TCS up 4.65%. Reliance gained 4.8% and the FMCG majors ITC and Hindustan Lever chipped in with gains of 3.26% and 2.79%. Foreign Institutional Investors were sellers and this did not help the market. The rupee has been weak and remained range bound with no significant gains. The week ahead has a trading holiday on Thursday on account of Dusshera which will make the markets extremely volatile on Wednesday. It appears we are likely to see some weakness at the open of the week and there could be some recovery towards the end of the week or on Friday. The direction of the market will be guided by overseas cues, the action taken by Foreign Investors and the Indian rupee. The BSESENSEX has support at 16,323, then at 16,051, then at 15,983, then at 15,801 and finally at 15,765 points. It has resistance at 16,664, then at 16,756, then at 16,872, then at 17,004 and finally at 17,191 points. The NSENIFTY has support at 4,903, then at 4,802, then at 4,789, then at 4,758 and finally at 4,715 points. It has resistance at 5,004, then at 5,065, then at 5,105, then at 5,173 and finally at 5,229 points. The markets have been trading in a range for quite some time. The time has come for it to form a trend and indications would be available by the end of the week this time around. Crucial levels to watch for are below 15,800 and above 17,200 on the BSESENSEX. Similar levels on the NSENIFTY would be below 4,725 and above 5,230. The author is founder of KRIS, an investment advisory firm. Views expressed are his own SENSEX up 1.8% for the week The BSE Sensex rose 291.70 points or 1.8% to settle at 16,453.76 in the week ended Friday, September 30 2011. The 50 share S&P CNX Nifty gained 75.50 points or 1.55% to 4,943.25. Sensex has dipped 19.77% in 2011 The index has slumped 4055.33 points or 19.77% till date in calendar year 2011 . From a 52-week high of 21,108.64 on November 5 2010, the Sensex has lost 4654.88 points or 22.05%. From a 52-week low of 15,765.53 on 26 August 2011, the Sensex has risen 688.23 points or 4.36%
	Mutual Fund Industry— A synopsis The industry has shown signs of a revival, with Assets Under Management (AUM) growing again (Figure 1). Gold as AUM grew 187% over last year Glossary Mutual Fund A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities Assets Under Management The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked at as a measure of success against the competition and consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow.