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Investor wealth skyrockets by
Rs 10L cr in 2012 as stocks rally
RBI chief faces big dilemma as calls for rate cuts get louder
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Investors in gold equity funds miss rally
Aviation Notes
personal finance
Most people don't plan for a comfortable retirement and struggle afterwards when there is no one to take care of them. If you want to enjoy the same standard of living as you do today, then you must act now
Getting your bank loan approved
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Investor wealth skyrockets by
Rs 10L cr in 2012 as stocks rally
With the gain of over Rs 10 lakh crore in investor wealth, measured in terms of combined market value of all listed stocks in the country, the market has recouped more than half of the losses suffered last year. The investor wealth had fallen by Rs 19.48 lakh crore in entire calendar year 2011, shows the market data. From Rs 53.48 lakh crore at the end of December 2011, the total investor wealth that includes holdings of promoters, institutions and retail investors, has shot up to Rs 63.63 lakh crore as on September 14. The promoters account for close to 60% of investor wealth gain so far in 2012, while retail investors share about 10% of the pie. Within the stocks categories, gains were a tad bigger for midcap as against the Sensex bluechips. While the Sensex is up 9.47%, the midcap index is up 22%. The small-cap index, however, has gained around 19.33% — a level similar to bluechips. With rupee depreciating around 2.25 per cent against the US dollar this year, the gains for FIIs have been lower than domestic investors in Indian stocks. Among the Sensex constituents that have held on to their position in the 30-share index, cigarettes-to-hotels major ITC leads the pack in terms of investor wealth addition with Rs 53,512 crore. ITC is followed closely state-run Coal India whose market value has gone up by Rs 51,478 crore. TCS (Rs 49,068 crore), Reliance Industries (Rs 45,205 crore) and HDFC Bank (Rs 44,515 crore) are also among other major wealth creators. On the other hand, telecom major Bharti Airtel has seen its market value decline by Rs 33,342 crore. — PTI FIIs pump in nearly
Rs 3,000 cr in 2 weeks
Overseas investors pumped in nearly Rs 3,000 crore in Indian stock markets in the past two weeks amid hopes of government initiatives on policy reforms and easing of monetary policy. Foreign institutional investors’ investment in the country's equity market has reached Rs 65,954 crore (about $12.81 billion) so far this year. Market analysts believe that inflows would continue in the coming months as well on account of the government’s recent recent big-ticket announcements. |
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RBI chief faces big dilemma as calls for rate cuts get louder
Mumbai, September 16 Earlier, Subbarao requested the government to bring about a cut in subsidies in order to qualify for the rate cuts. The government seems to have obliged the central bank by announcing much-awaited economic reforms and raising diesel prices by Rs 5 per litre. Apex chambers like the FICCI and CII have called for the RBI to cut rates in order to revive the economy. "The RBI should take calculated risks to revive industrial growth," Assocham president Rajkumar Dhoot said. According to some analysts, the government's decision to hike diesel prices would add to inflationary pressures in the economy though it would help in reducing the fiscal deficit. Notes of warning have also been coming in over the recent actions by the Federal Reserve and the ECB over their bond buying programmes that are expected to push up commodity prices including crude oil. The government is however banking on oil subsidies to come down by Rs 20,300 crore this fiscal. With the economy slowing down the RBI reduced CRR by 50 bps in January and again by another 75 bps last March. The RBI further cut repo rate by 50 bps in April. |
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Yamaha eyes sale of over a million bikes by 2014
Yamaha Motor Company was the first Japanese auto major to enter the Indian market in the early eighties and later formed a joint venture with Escorts to bring in high quality motorcycles. Since then Yamaha has chosen to go it alone in the country with its Indian operations becoming a wholly-owned subsidiary, India Yamaha Motor Pvt Ltd. In an interview to Girja Shankar Kaura, India Yamaha national business head Roy Kurien talks about the company’s future plans. Q: How different has your approach been in India, vis-à-vis the competition? A: Indian two-wheeler market has evolved substantially in the past years and has carved a niche in terms of both product offerings and customer preferences. In this competitive market, there are a number of bike models competing in 150cc plus segment. But we believe in making a difference with our innovative products which carry the global Yamaha DNA of performance, innovation and design along with excellent aftersales services. Q: How is the Indian market shaping up? A: The auto industry has marked an impressive growth in the last fiscal and is moving in the right direction. The overall industry grew by over 12% in 2011-12 by selling 17.3 million units, driven by the demand for two-wheelers. It is estimated the motorcycle segment will grow at about 7-8% in FY13 and scooters at about 18%. Q: You said the industry is moving in the right manner, so what future do you anticipate for the Indian market by 2020? A: The market will continue to grow at a brisk pace and industry experts suggest India will be the world’s third largest by 2020 after the US and China. Here, the market provides an opportunity for players to enter with its diversified models as customers’ tastes and preferences here are changing rapidly. Q: Specifically, how big do you think the two-wheeler market could be by 2020? A: The two-wheeler market in India has continued to grow on a healthy note despite the rising fuel prices. In 2011, the two-wheeler demand in India exceeded 13 million units, making it the world’s second largest market. For Yamaha India the introduction of new models in the over 150cc deluxe & premium bike segments have contributed to a strong growth in domestic sales and exports. Total units sold grew from 380,000 in 2010 to 520,000 in 2011. Forecasts for the next medium-term management plan beginning in 2013 see annual sales of Yamaha two-wheelers exceeding the one million units mark. Q: You have been launching new models in India, how do you see yourself here over the next few years? A: Our immediate priorities include focus on scooters and we are coming up with many variants in the coming years. We want to continue our focus on strengthening the 150cc segment and also strengthen our network in the south with respect to the 4S which are sales, service, supplier and spares. We are already underway in setting up our third plant in Chennai. We’re also expanding our dealerships especially in tier II and tier III cities. Q: Do you see the Indian market evolving into luxury bikes at some time? A: The superbike segment or the luxury bikes as they are called is expected to witness a significant growth over the medium term, given the increased disposable incomes in the hands of middle class urbanites, especially in the age group of 25-35 years. This should also translate into superior profit margins for players who are stronger in the premium segment.
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Investors in gold equity funds miss rally
Besides buying physical gold, Indian investors also take exposure to the precious metal through gold ETFs (Exchange Traded Funds) that tracks the metal's prices, or through gold equity MFs that invest in the shares of gold companies. While gold ETFs have gained up to 12.90% in the last 12 months, the gold equity funds have performed badly, with losses of 6-9% in the past one year. With large-scale gold mining almost absent in India, gold equity MFs invest in firms listed abroad such as New Gold Inc, Goldcorp, Eldorado Gold, Randgold and Osisko Mining. The investment philosophy of such funds is that profits and share prices of miners will rise with surging gold price, but that scenario has not played out in the last 12 months. "Gold equities, though closely correlated with bullion, are also impacted by the factors that affect equity markets," DSP BlackRock Investment Managers' executive VP Pankaj Sharma said. "So, periods in which overall equity markets are going through a bear phase could see gold equities also underperform bullion”. — PTI
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Airport fee hike hurting carriers
By K.R. Wadhwaney Delhi International Airport Ltd (DIAL) is defending an unprecedented hike in the airport charges where as the aviation industry is considering it an obstacle in the progress of the aviation sector. Lufthansa and Austrian Airlines director (South Asia) Axel Hilgers, said: “The additional burden is severe as we’re already paying more for ATF in India. Delhi airport’s T3 terminal has become one of the world’s most expensive with airport fees having been hiked by 346%.” According to him, the Federation of Indian Airlines (FIA) and 14 foreign carriers are contesting the case pertaining to the fee hike at Delhi international airport. The case against the Airports Economics Regulatory Authority is being heard by the Competition Appellate Tribunal and analysts are of the view that the aviation sector will register improvement only when the rules are amended. The civil aviation ministry has amended the rules pertaining to the flight duty time limitations for commanders, pilots and cabin crew. Experts say if the amended rules are rigidly adhered to revenues of the airlines will be affected. Now pilots and cabin crew will have to adhere to the rules, formulated by the International Civil Aviation Organization and DGCA. Instead of following these rules, Air India pilots earlier had formulated their own rules which provided them facility of lesser flying hours, longer layover and huge perks. Under the revised rules, they will have to complete flying hours, which are counted on “chalk-on-and-chalk-off” norm.
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Most people don't plan for a comfortable retirement and struggle afterwards when there is no one to take care of them. If you want to enjoy the same standard of living as you do today, then you must act now Pankaaj Maalde
The Pension Fund Regulatory and Development Authority (PFRDA) has been set up to look into new pension plans. The Insurance Regulatory & Development Authority (IRDA) has also revised its guidelines for new pension schemes of insurance companies, so that people start their retirement planning. Still, most people do not plan for comfortable retirement and struggle afterwards when they are forced to live in misery in case there is no one to take care of them. If you want to enjoy the same standard of living as you do today then you must act at the earliest. It is also necessary to start early to benefit from the power of compounding. At present average life expectancy of an individual in India is around 66 years and is likely to increase to 75 years in next 10 years. Still most people do not plan for comfortable retirement only to bear the brunt later. One has to start retirement planning at the earliest and has to decide his/her asset allocation depending on the retirement age and the corpus required. It is better to hire a financial planner for planning your retirement goal and means to achieve the desired corpus. Plan a retirement corpus
The following points will help you to plan to build up a retirement corpus: Equity optimal option Equity is the best option for retirement benefit as the goal is long-term generally above ten years or more. Still one cannot ignore debt part and must also consider EPF/VPF/PPF for retirement benefit. Salaried people do not have any choice but have to go with mandatory schemes like EPF and superannuation. Those who are self-employed must include PPF in their retirement planning, as it is better than traditional insurance plans and other debt products. Employees Provident Fund The Employees Provident Fund is a retirement benefit available to salaried employees. Under this scheme, 12% is deducted from the employee's salary (basic + DA) and contributed towards the fund. The employer also contributes an equal amount to the fund. However, an employee can contribute more than 12% if the scheme allows for it. The amount deducted from salary, i.e., employees contribution is eligible for tax benefit under Section 80C of the Income Tax Act up to Rs 100,000. The rate of interest at present is 8.6% per annum, which is also tax-free. The EPF corpus is available to person after his/her retirement or after resignation. The fund can be transferred from one employer to other in case of resignation and after joining other organization. One can also withdraw the same but if the tenure of employment is less than five years then the withdrawal amount will be taxable. Premature withdrawals are allowed in limited cases. Voluntary Provident Fund Over and above this, one can also increase his/her contribution by opting for the Voluntary Provident Fund (VPF). An employee can contribute 100% of basic salary plus DA in VPF. VPF will give the same rate of interest given by EPF account. The employer is not liable to contribute more than 12% in EPF. The interest earned in VPF is also tax-free as it has linked to your EPF account. Public Provident Fund In the Public Provident Fund, which has been set up by the government, one can voluntarily open an account with any designated banks or post office. The account can be opened in the name of individuals including minor. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 1 lakh in one account. The amount deposited is eligible for tax benefit under Sec. 80C. The rate of interest at present is 8.80% per annum tax-free. The entire balance can be withdrawn on maturity, i.e., in the beginning of 17th year from the financial year in which you opened the account. It can be extended for any number of times in a block of five years each. Loans on PPF account You can take a loan on a PPF account between the third year of opening your account to the sixth year. The loan can be taken up to 25% of the amount in the account at the end of the second year immediately preceding the year in which the loan is applied. Partial withdrawals are allowed after seventh year. One can withdraw up to 50% of the balance at the end of the fourth year, proceeding the year in which the amount is withdrawn or the end of the preceding year whichever is lower. It is advisable to earmark your PPF account to your retirement goal and should not be touched unless there is no other option left. The liquidity is low in both EPF and PPF as they are basically designed for retirement benefit. One must also know all these options before planning for retirement. The author is head of financial planning at ApnaPaisa. The views expressed in this article are his own |
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Getting your bank loan approved
The hunt began for a suitable property and, after substantial efforts, he zeroed in on an under construction property that looked like qualifying on all the parameters set by him like easy access to market, club, good schools, park, greenery, sufficient parking and good neighbourhood. Above all, he wanted a reliable property developer who could ensure timely delivery. All this being in place, Singh proceeded in the matter and approached his bank branch for home loan. Prima facie every thing looked smooth and he got busy readying his documents. Till he heard from the bank - his relationship manager asked him to visit his bank branch. Credit Information Bureau Here he came to know that the Credit Information Bureau of India Ltd (CIBIL) had reported negative in the report pulled out by his Bank to check his credit worthiness. His report mentioned two loans on which he had defaulted. This was a real shocker to him as Singh had never taken any loan in the past. Now he wanted to see the report and to this his banker obliged. The loans mentioned in his report were a Rs 45,000 agriculture loan on taken on September 24, 2011 and a Rs 25,000 business loan (small-scale) taken on September 1 in the same year. To his utter disbelief, his name and income tax PAN number were same in the report, but his date of birth, father's name and address were different. He took a sigh of relief as at least other relevant information did not tally with his. But explaining this to bankers - that he had never taken these loans, that other details were not tallying and somebody might have misused his PAN number - fell on deaf ears. The bank did not sanction the loan till they got the clear report from CIBIL. What added to insult to injury was that he had now to pay a delayed interest at the rate of 18% per annum to the builder till the time bank sanctions the loan and he gets the disbursement. For the first time, Singh came to know that as a customer he too could get a report from CIBIL. He called up the bureau where he was explained the due procedure. He was advised that he can download the request form from CIBIL's website and attach the completed form with a demand draft of Rs 142 and, if possible, he should write to the bureau's customer relations department explaining his case. Normally CIBIL takes two weeks for such reports. This got Singh worried as his interest amount was accumulating. To his surprise the report arrived much before the stipulated time. But it had another glitch - his name was mentioned as Rajendra Pradesh Singh and not Rajendra Prasad Singh. Thus whole effort went for a toss, now bank got another reason to delay his loan sanction. He promptly brought this to the notice of CIBIL by doing relevant correspondence regarding rectification of his name which took him another week or so to get it. Now the proper report was before him. Had he done this exercise before applying for a loan he would have been saved from so much mental turmoil. File for a CIBIL report It is always better that all loan aspirants get their CIBIL report by incurring a small expense of Rs 142, whether they are planning to take a loan or not. At least they will come to know what has been reported by banks and if there is any discrepancy as happened in the case of Singh, they can take corrective measures. Better still to go for your credit report from CIBIL with a Credit Score (that costs Rs 470) which is a number allotted on your credit report. If your score is good then it enables you to negotiate with your bank for a better deal for your credit and if it is not then you can work around to improve it to better your prospects of getting credit. Also, you will come to know that you are not a victim of identity theft as probably happened in the Singh's case. Finally after three weeks of anxiety and rigorous follow -up from his end with CIBIL, Singh got his CIBIL report finally. His bank sanctioned the loan and today he is happy watching his dream house turning into a reality. So if a customer is alert, takes advice seriously and acts on it promptly, his issues are resolved in time. The role of CIBIL is to be lauded here as they professionally handled the whole issue and resolved it well in time, which saved Singh from so much mental and financial agony. The author is chief editor of ApnaPaisa, a leading online marketplace for loans and investments. The views expressed in this article are his own |
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Mumbai, September 16
Among the sectors, the best-performing ones so far this year have been those that were mostly beaten down last year. Bank shares have gained about 33%, followed by 25% in capital goods stocks, 22% in autos, 19% in real estate sector and about 16% for oil and gas stocks.
New Delhi, September 16
Living long is a concern shared by most and has to be addressed carefully at a younger age. The rising trend of nuclear families, technological advancement and medical facilities has forced people to seriously think about their retirement priorities. The government is also concerned about this issue. This has been the central point behind floating the National Pension System (NPS).
Our friend R.P. Singh is employed with a reputed publishing house in Delhi where he handles the real estate division overlooking the company's legal matters. But the real brush with real estate happened when he wanted to buy a piece a real estate for himself in Noida.
