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Key infrastructure sectors fail to meet output targets in Apr-July
PFC to raise Rs 17k cr through securities issue
AI to get $1.3 bn US loan guarantees
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Gold may scale Rs 30k peak by Diwali
Markets likely to turn negative after initial gains
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Key infrastructure sectors fail to meet output targets in Apr-July
New Delhi, October 9 According to the study done by the ministry of statistics & programme implementation, in April-July period this fiscal, the production of coal, fertilizers, natural gas; upgradation of highways; goods carried by railways; cargo handled by ports and airports lagged behind their targets. However, the analysis indicate that power generation, crude oil and refinery production and passengers handled at international and domestic terminals exceeded their respective targets set for the April-July period this year. It further revealed that the production of natural gas, upgradation of highways, net addition switching capacity of telephone exchanges and net new wireless (cell) phone connections recorded negative growth in April-July this year over the actual achievement in the corresponding period in 2010. During the four months, the overall coal production at 157.69 million tonnes was 4.3 lower than target for period but it was slightly higher at 0.6% than the output during April-July 2010. The overall production of fertilizers in April-July this year at 5.31 million tonne was 5.4% lower than the target for the period, but reflected a growth of 0.6% over the actual output in the four months in 2010. The gas production during April-July at 16,356 million cubic meters (mcm) was 2.6% lower than the target of 16,787 mcm and it was also 9.7% lower than the production during the corresponding period last year. The National Highways Authority of India (NHAI) upgraded 506 km of highways in April-July period this year which was 28.5%lower than the target of 707.29 km and it was also 11.6% lower than the achievement of 572.21 km in the corresponding four months. In April-July period this year, 359,476 new telephone lines were added in the switching capacity of telephone exchanges across the country which was 91.7% lower than the actual achievement in the corresponding period. The overall new telephone connection (wireless and fixed) provided by the public and private sector in April-July this year at 462.32 lakh was 31.1% lower than new subscribers added in the corresponding period last year. The overall good carried by railways at 313.32 million tonnes in April-July period was 2.6% lower than the target of 321.81 million tonnes. However it recorded a growth of 7.1% over the achievement during the corresponding period last year. The major ports handled 193.01 million tonnes of cargo in April-July this year, which was 3.6% lower than the target for the period, but it recorded a growth of 4.8% over the achievement in the corresponding four month in 2010. The overall crude oil production in April-July this year at 12.86 million tonnes was 1.7% higher than the target of 12.64 million tonnes and it was also 7.3% higher than the actual producing in the corresponding period last year. Power generation also shown positive growth. During April-July electricity generation at 291.46 billion units was higher than the target for the four month period as well as actual output in the corresponding period last year by 3.6% and 9.4%respectively. The refining output at 57.01 million tonnes in April-July period this year was 5.8% higher than the target of 53.88 million tonnes and recorded a growth of 4.9% over the actual production in said period in 2010. — PTI
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PFC to raise Rs 17k cr through securities issue
New Delhi, October 9 The state-run lender for the power sector has already started the sale process for tax-saving infrastructure bonds and tax-free bonds, which together could raise up to Rsv 11,900 crore. Further, PFC has received regulatory approval for $1 billion (about Rsv 4,900 crore) medium term note programmed that would tap international bond market. All these issues could mop up as much as Rsv 16,800 crore. "We have started the process of issue of long-term infrastructure bonds, through which we can raise up to Rsv 6,900 crore. "It began on September 29. The first tranchet is for Rs 200 crore," PFC finance director R Nagarajan told PTI. There would be both 10-year term bonds carrying an interest rate of 8.50 per cent as well as 15-year term bonds having an interest rate of 8.75 per cent. According to Nagarajan, PFC issue is expected to see better response, since at present there is no other public issue in the market. ICICI Securities and SBN Capital Markets are lead arrangers for the issue. PFC has also started the issue of taxfree bonds on September 29, that could raise a maximum of Rsv 5,000 crore. In addition, the company has received the green signal from the Reserve Bank of India for the $1 billion (about Rsv 4,500 crore) medium term note programme. "Depending on market conditions, we expect to start this programmed in November or December," Nagarajan said. Royal Bank of Scotland and Bank of America have been appointed as managers of the issue. Last month, PFC saw good response for its Rs 2,000 crore domestic issue of long-term bonds. PFC expects to raise around Rs 30,000 crore in the current fiscal and is estimated to have raised nearly half of that amount. Among others, PFC offers project term loans, equipment lease financing and short term loans for power projects. — PTI
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AI to get $1.3 bn US loan guarantees
New Delhi, October 9 A decision to this effect was taken last week in Washington by the board of directors of the Export-Import Bank of the United States. The bank approved $1.3 billion in loan guarantees supporting Boeing commercial aircraft sales to Air India, a statement said after the board meeting. In addition to these final commitments, the board also approved a $2.1 billion preliminary commitment to support future deliveries of Boeing aircraft to Air India, it said. "Upon approval of the conversion of the preliminary commitment into a final commitment, the transactions in total will support the export of 30 Boeing aircraft to the state- owned, national flag carrier of India," it added. Air India has pending orders for 27 Boeing 787 Dreamliners, the deliveries of which are expected to begin in the next two months. These are part of the 68-aircraft order placed by the national carrier with the US plane manufacturer. This support would enable Air India to raise finances for acquiring latest technology aircraft at competitive interest rates compared to commercial financing, official sources said. The GoM, at its next meeting later this month, is likely to take a final call on the acquisition of these planes whose deliveries have been delayed by almost three years. — PTI
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Gold may scale Rs 30k peak by Diwali
Mumbai, October 9 "We expect gold prices to shoot up to Rs 29,000-30,000 per 10 grams by Diwali due to local demand," Bombay Bullion Association President Prithviraj Kothari said. The metal is still considered the best bet for hedging, with no end in sight to the global economic turmoil, he added. Standard gold (99.5 per cent purity) was being quoted at Rs 26,215 per 10 grams, while pure gold (99.9 per cent purity) was being sold for Rs 26,355 per 10 grams in Mumbai on Saturday. However, in contrast, brokerage firm Maya Iron Ores Chairman Praveen Kumar said in the domestic market, gold prices will hover between Rs 25,970 and Rs 26,460 per 10 grams in the short-run. They would move in a range between US $1,626 and $1,650 an ounce in international markets, with a slightly negative bias due to poor liquidity with investors, he predicted. He said gold will remain range-bound and is waiting for cues from European markets. Gold prices witnessed extreme volatility in September amid the deepening European debt crisis. The metal witnessed a high of $1,923.7 per ounce and a low of $1,535 per ounce in September. However, as the debt crisis got even more exacerbated, there was massive selling, pulling down prices of the precious metal by a full 11 per cent to $1,634 an ounce by end-September, compared to $1,826 an ounce at the end of August. Another reason for the fall was the failure of the US Federal Reserve's plans to swap shorter-maturity government securities for longer-dated ones in enthusing markets, leading to a massive sell-off in all asset classes, including equities and commodities, Indiainfoline commodity analyst Hitesh Jain said. "On the price front, however, we remain bullish on gold in light of the current downward spiral. We deem that this correction will effectively propel domestic jewellery fabrication demand by the onset of festive and wedding season," he added. — PTI
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At times we might buy an insurance cover worth Rs 1 lakh or Rs 2 lakh by just comparing a few insurance products and narrowing down on the choice based on price only. However, like any other investment decision, we must also pay equal attention to protection planning and take the right advice of a qualified professional to help us ascertain our risk cover need. The second step is to calculate the present value of a family's future expenses and add a percentage increase in this expenditure on a year-to-year basis, which will take care of the inflationary impact. Then, depending upon the remaining number of your working years, the total amount of income that would be required by your family can be calculated, in case of the bread earner's death. Thus, this would be the amount that one needs to secure, which will take care of all the future expenses of his/her family. The third step in the process is to add the current value of any loans and liabilities, if there are any. The fourth and next step is to add the current value of expenses like your child's education, marriage, etc. Next, add the equivalent retirement expense for your spouse to this amount. Once all these expenses are added while taking into account the impact of inflation, the sixth step is to arrive at the current value of all these expenses and liabilities. The next thing to do is to subtract the present value of your current savings and investments from this amount, which would give you the amount of risk cover required by you today to ensure that your family is able to maintain the same lifestyle and all planned future expenses like child's education, marriage, etc, are taken care of in case of any mishap. This is the financial planning approach to calculate your risk cover requirement. Let us take an example and understand the importance of getting "adequately insured". Mr. Ram who is 30 years old, took a "money back" plan. He is paying an annual premium of Rs 30,000 out of his salary of Rs 5 lakh. His risk cover is of Rs 2 lakh. His family expenses are Rs 25,000 per month. If in case something happens to him the family expenses of Rs 25,000 would still remain fixed and Rs 3 lakh every year would be required for the same. A policy of Rs 2 lakh would not be sufficient to incur the monthly expenses of even one year. Whereas ideally he should have been insured at least for a sum which could have provided a lifelong income to the family to take care of their expenses. He should have ideally been covered at least for a sum of Rs 30 lakh in this situation. Where did he go wrong? First, he should have bought a risk cover as per the above calculations and he should have started with a term plan, which would have given him the desired coverage at a much lower cost. For the example quoted above, see the table here. These are some quotes at cheapest rate for the Pure Term Plan: A common mistake that we all make while doing insurance planning is that we do not understand what kind of products actually suit our requirements. Usually we go for investment-based insurance only. However, the need for a risk cover in financial planning should be first met through a term product - term insurance, which is available at the cheapest cost and also provides adequate risk cover. Also, new age term plans come with a money back version, wherein without losing its sheen of a low cost protection solution, it also returns all your premiums back on surviving till maturity. These products are called Term Return of Premium (TROP). For the above example again of Mr. Ram (aged 30), the sum assured is Rs.30 lakh for a term of 30 years. (see table below) Here are some quotes at cheapest rate for TROP: One of the advantages which one gets in TROP over a pure term plan is that it has features like lapse protection. Normally a term plan shall lapse in case the investor misses payment of premium and his precious risk cover shall not be available from that date. However in some TROP plans even though he might stop paying premiums (subject to a payment of minimum 3 years), he shall continue to enjoy a proportionately reduced risk cover for the remaining term, plus he shall get back all the premiums paid on maturity. This feature is a great boon to the new generation investors who fear risks like loss of jobs or critical illness, during which they might not be able to pay their policy premiums. Thus, to conclude, I would say it is very important for investors to go for the right type of insurance policy and also the right risk cover amount. The author is managing
director of Bajaj Capital. The views expressed are his own |
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Markets likely to turn negative after initial gains
The markets behaved exactly as predicted and the rally after the Dussehra holiday was a bit too much. The Bombay Stock Exchange Sensex gained a staggering 440 points on Friday but it simply was not enough to end the week on a positive note. The Sensex closed the week at 16,232.54 points, a weekly loss of 221.22 points or 1.34%. The National Stock Exchange Nifty ended the week at 4,888.05 points a loss of 55.20 points or 1.12%. The broader indices like the BSE 100, BSE 200 and BSE 500 lost 1.44%, 1.55% and 1.63%, respectively, while the BSE Small Cap and BSE Mid Cap lost 2.32% and 2.78%. The big loser was the BSE Bankex that lost a staggering 4.63%. Moody's had downgraded State Bank of India, the country's largest lender, on Wednesday and the stock ended the week at Rs 1,752, with losses of Rs 159 or 8.32%. Led by SBI the entire banking pack was sharply down and ICICI Bank, whose rating was confirmed at the same level as existed, ended the week 5.83% down. The week saw the markets falling on the first three days and then the holiday came which actually reversed the trend. The important thing to note is that the Sensex hit a new low on Tuesday breaking the lows of August 26 and September 26. The Nifty came close to the low of August 26 but did not break it; however the September 26 low was broken. The lows being violated in a week's time is not a good sign and puts pressure on the market's uptrend. Foreign institutional investors were big sellers last week for the first three days and did buy worth Rs 491 crore on Friday, which reduced the net sales for the week to Rs 2,300 crore. Domestic institutions bought Rs 1,200 crore during the week. The rupee appreciated against the US dollar and closed at Rs 49.16. Gold, silver and crude remained extremely volatile. The week ahead sees Infosys kicking off the results season and the guidance from the company would help the market to get a sense of the positives that the depreciating rupee would do to the IT sector. Markets during the week starting October 10 are likely to open strong, gain initially but give up the gains as the week progresses and actually turn negative as the week comes to an end. The losses could actually increase and bring us to a realization that new lows on the indices are round the corner. The BSE Sensex has support at 16,138, then at 15,940, then at 15,869, then at 15,745 and finally at 15,565 points. It has resistance at 16,337, then at 16,471, then at 16,555 and finally at 16,756 points. The NSE Nifty has support at 4,858, then at 4,797, then at 4,770, than at 4,720 and finally at 4,685 points.
The author is founder of KRIS, an investment advisory firm. The views expressed are his own
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Forex reserves continue to slide M Nene new IOC marketing director Rlys’ revenues up 10.4% in Apr-Sept R-Cap sells 26% stake in Reliance Life
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The infrastructure sectors, including coal, fertilizers, natural gas, highways and railways, could not meet the set performance targets for April-July period this fiscal, says a government report.
When it comes to protection planning, which is the foundation of any financial planning house, one often does not pay much attention to this aspect and ends up doing it in a haphazard manner.
A majority of the Indian insurable population today does not even have a single life insurance policy, which their families would be able to fall back upon in case of any exigency. Even those who have any kind of life insurance plan are largely underinsured, meaning the policy amount is not sufficient enough to take care of the family, incase of a need. A common perception I would like to highlight here is that most people think they have got adequate insurance. Thus, the objective of writing this article is to break this myth and do a reality check.
A few simple steps can help us ensure we buy the right kind of solution and, especially, in the right quantity, which will make our protection planning complete. The first step is to check out your current balance sheet of your monthly income and expenses. 
