Find out whether your retirement planning is on track

Vivek Sharma

Retirement planning is a herculean task. The magnitude of the post retirement corpus requirement is so huge that it cannot be achieved without smart planning. While creating adequate corpus for retirement planning requires meticulous investment strategy, it is equally important to check whether retirement planning is on right time path or not. 

Also read: Find out: 4 common mistakes in retirement planning

With increasing inflation and ever increasing needs, one needs to ensure that neither the creation of corpus nor the timelines for creation of corpus gets missed. In order to watch whether retirement planning is on track or not, there is a need to develop checklist for retirement planning. Here is a checklist to see if your retirement planning is on right path or not: 

You must be owner of the house by 45 

Age of 45 is a critical benchmark for retirement planning in many contexts. One of these is the ownership of the house where you stay. You need to ensure that by the time you turn 45, the house becomes loan free.

This will help you build a good corpus from 45 onwards till your retirement, even if you invest in debt. While there is nothing sacrosanct about this age, you can use it as a benchmark to put yourself in a comfort zone.

In order to ensure this, house where you wish to stay should be bought during initial years of job or starting of profession. One of the important costs in day to day expense management is the cost of rent, in case you don't own a house. By owing a house, you will be able to take care of this aspect.

Create your health insurance coverage comfort by 45

Healthcare expenses are very high post retirement. You need to build health insurance coverage by a particular age. Buy an insurance plan which covers you up higher costs on health front. For instance, in today's scenario it won't be unfair to look for coverage of atleast 25 lakhs for health coverage.

There are many insurance companies which have started providing high insurance coverage now. You need to scale up your insurance coverage so that by the time you reach 45 years, you have adequate coverage.  Healthcare costs can have a killing effect on your financial planning process if they are not managed well.
Your investment corpus should be ten times of annual expenses by the age of 50

This means that if you annual expenses are 5 lakhs per annum by the time you reach age of 50, you should be having a corpus of Rs.50 by this age.  The creation of this kind of corpus will give a comfort and help you build further corpus without taking much risk from 50 years onwards.

This is critical as the risk appetite reduces substantially after the age of 50. This can be achieved by increasing savings year on year and making investments so that atleast 20 percent growth in retirement corpus is seen year after year.

Keep on watching growth in your retirement planning corpus year on year and also check if you are missing any of your milestones that you have set.  Any slippage would require change in strategy. Ensure that you achieve targets always.

20.07 | 0 komentar | Read More

Why health insurance cover is a necessity today

Nitin Vyakaranam
arthayantra.com

Health Insurance provides risk coverage against expenditure caused by any unforeseen medical emergencies. In today's high medical inflation rates, failing to hold adequate amount of health insurance cover can often prove to be a major personal financial slip-up.

Also read: Provisions in mediclaim policies you must know

It can either result in poor health care because of non-affordability or spiral an individual into financial distress due to high medical bills. Currently, majority of the salaried professionals are provided a health insurance cover by their respective organizations.

However, they often fail to assess their health insurance requirements and realize the benefits of holding adequate health insurance. They also assume that the health insurance cover provided by their organization will be available even during the post retirement phase.

There are two common mistake areas when it comes to buying life insurance and health insurance. One, people don't act at the right time. Two, when they realize that they have done a mistake they try to over compensate it by buying too much Insurance.

Always remember this popular saying about insurance:

"Buy health insurance when you don't want it, you may not get it when you want it."

So why one should buy Health Insurance, even if it is provided by their organization:

• Buying a medical cover in early life would ensure that the cover is comprehensive while one is employed and continues when they choose to retire.

• Buying a personal Health Insurance policy when one is young and free from medical complications would be a cost efficient option. The premium would be lower and would offer comprehensive coverage in comparison to a policy purchased at later stage once they face any medical/health issues.

• As an individual grows older, the cost of the cover increases and if one develops health issues, the health insurance company tends to exclude pre existing conditions which defeat the whole purpose of buying a health insurance.

• Most health insurance companies have an upper age limit for the policies, which means one would have limited options after retirement.

• One can enjoy the benefits of cumulative bonus in the form of 'No Claim Benefit' if they renew the policy without any claims.

• The icing on the cake is the health insurance tax benefit. On the other hand, it should not be the driving force behind making the decision of taking a health insurance policy.

One should scientifically calculate the amount of health insurance required with the help of a proficient financial advisor.

The author is the founder and CEO of www.arthayantra.com

20.07 | 0 komentar | Read More

Find out: The need to undergo a loan fitness test

Rajiv Raj
creditvidya.com

We all know how fitness tests are important in sports. Soccer-lovers keep a track of what comes out of fitness tests of injured players before important matches. After all, an exceptionally good player playing a match and giving his valuable contribution to the team's victory hinges on his fitness. If such a player falters or fails to pass the fitness test, then the possibility of people perceiving a defeat for the team goes up. Picture yourself as this player.

Also read: Be careful of your CIBIL score if you are a loan guarantor

The biggest dream of an average Indian call it 'the game' - nowadays is to own a house. And loans are inevitable. Think of a situation your family has gone out to acquire a house and you are not a part of that 'team' just because you are not fit you are not eligible for a home loan.

Yes. You read it right. Unfortunately it is not an imaginary scenario or a nightmare. Today, when securing a loan, be it personal or home loan is not a big task, being fit in terms of finding out your eligibility and your ability to service the loan after taking care of your and your dependents' needs is a challenging task. So, are you a part of the brigade who pass the loan fitness test? Or you are still among those who are just contemplating.

I keep getting emails from readers, who are caught on the wrong side. Take the recent case of Sumith K, software professional who is employed with a Hyderabad-based multi-national company. He bought a house by making a down payment and then approached the bank for a home loan. He, however, was caught off guard. Considering his fat pay cheque, rejection of his loan application by the bank was a surprise for Sumith. He was told that he is a defaulter in CIBIL records.

There are many such people around, who get such shocks when they are about to borrow an important loan be it a home loan or an education loan for a course overseas as a part of their executive education or a business loan.

While scrutinizing the loan application, banks nowadays check credit score and credit report of the applicant. If the credit score popularly known as CIBIL score is below 750 out of 900, banks avoid giving loan. Worse, if there is a defaulter tag in your credit report. In such a situation applicants are disqualified banks give more weight to the track record of the loan applicant than his repaying capacity.

It all starts, in some cases, even five or ten years back in time, when the individual has not paid a disputed credit card transaction. The banks too put a defaulter tag on that credit card account. In some cases the applicant has not defaulted on a single rupee. Like Sumith, many become victims of identity theft.

Some anti-social elements procure important documents pan card, salary slip, address proof or even photocopies of these documents of innocent individuals and use these documents to get loans and credit cards in their names. Of course, the impostors don't repay the borrowed money. These individuals never come to know about such an act, unless they approach the bank. And by then, it is too late.

Hence, it is important to take loan fitness test at regular interval at least once in a year. Check your CIBIL score, your cash flows what is your income- how much you take home and how much you end up using to repay existing loans how much loan you may get if someone has raised loan in your name... the list may go a bit further.

If you do not know how to do it yourself, seek professional advice. However, ensure that you take your loan fitness test at regular interval. After all, it is all about taking a step in the direction towards fulfilling your dreams.

The author is co-founder and director of www.creditvidya.com

20.07 | 0 komentar | Read More

Find out: Best insurance policies for senior citizens

Deepak Yohannan
myinsuranceclub.com

Health insurance is considered to be a necessity in today's day and age. However, a lot of people, in various age groups, are left without this precious protection. There are a number of reasons for this and old age is one of the most common ones. Senior citizens often find it difficult to find good health insurance plans.

Also read: Here's how you can plan your EMIs well
 
Either the plans are too expensive or require extensive medical tests which they cannot perform. These factors force them to live without health insurance coverage. However, nowadays there are some very good health insurance policies for senior citizens.

So if you are looking for a plan for your parents, the ones listed below may interest you.

1. Varishta Bima from National Insurance

Considered to be a very good plan, this is among the very few plans in India that has the maximum entry age as high as 70. The plan has some great features. Take a look.

• Maximum cover of Rs.1lac for hospitalization available.

• Pre-existing conditions such as diabetes and high blood pressure covered for an extra charge  of 10% for each. These conditions will be covered after 31 days from the commencement of the  plan.

• No claim bonus available.

The plan has been criticized however as it subjects the prospective policyholder to a number of  medical tests, including the treadmill test which most people aged 70 are unable to perform.

2. Heart Beat from Max Bupa

Heart Beat from Max Bupa Life Insurance is another health insurance plan that allows people aged 70 years to join. The features of this plan include:

• No sub limits on ICU costs. This is helpful as senior citizens may require ICU facilities more often than their younger counterparts.

• No claims bonus is available.

• There is no waiting period for an accident cover.

The plan however has some very serious drawbacks, the most prominent one being its cost. It is the most expensive health plan available for senior citizens and this prevents many people from availing it. For a cover of Rs 2 lakh, a premium of Rs 27,925 has to be paid.

3. Red Carpet from Star Health

Many critics and users have voted this product as the best health insurance plan for senior citizens. The maximum entry age is 74 and this is the biggest advantage. Take a look at the other benefits of the plan:

• While buying the policy, you only need to declare your pre-existing illnesses. You are not subjected to any harsh medical tests unlike the other plans in this category.

• A whole lot of pre-existing conditions are covered. There is a 2 year waiting period for this and a 50% co-pay agreement, but it still proves to be beneficial as almost no other policy covers such a wide range of pre-existing conditions.

• Rs 5000 limit on post-hospitalization expenses.

Overall a very good policy, the Red Carpet plan is fast growing in popularity.

The above mentioned plans are some of the best available health insurance policies for people over 65 years of age. Someone who relied on his/her employer's group health policy all his/her life and now after retirement is left without insurance, can bank on these policies. They are effective and helpful.

The author is the CEO of MyInsuranceClub.com , an online insurance price & features comparison portal

20.07 | 0 komentar | Read More

Bharti Airtel Q1 net may rise 48% at Rs 751.5 cr QoQ: Emkay

Emkay Equity Advisory has come out with its first quarter (April-June) earnings estimates for the telecom sector. The brokerage house expects Bharti Airtel to report a 47.8 percent growth quarter-on-quarter (degrowth of 1.4 percent year-on-year) in net profit at Rs 751.5 crore.

Revenues are expected to increase by 4.1 percent Q-o-Q (up 10 percent Y-o-Y) to Rs 21,297.4 crore, according to Emkay Equity Advisory.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 4 percent Q-o-Q (up 15.3 percent Y-o-Y) to Rs 6,745.9 crore.

EBITDA margin or operating profit margin is likely to be at 31.7 percent in June quarter as against 31.7 percent in March quarter and 30.2 percent in a year ago period.

Emkay Equity Advisory report on Bharti Airtel

Bharti is expected to report 4 percent Q-o-Q revenue growth. Indian mobile revenue is expected to report 3.9 percent Q-o-Q growth. ARPU is expected at Rs 196.

We estimate consolidated EBITDA to grow 4 percent Q-o-Q with EBITDA margins of 30.7 percent. We expect Africa revenue at Rs 63.3 billion (+4.4 percent Q-o-Q) and EBITDA margin of 26 percent.

In USD terms, revenue is expected to grow 1.6 percent Q-o-Q. The watch out factor for Bharti would be overall strategy for African operations, 3G off take and prevailing pricing trend in the domestic market.

20.07 | 0 komentar | Read More

Andhra Bank Q1 PAT seen down 11% at Rs 323 cr: Emkay

Emkay Equity Advisory has come out with its first quarter (April-June) earnings estimates for the banking sector. The brokerage house expects Andhra Bank to report a 6.3 percent degrowth quarter-on-quarter (degrowth of 10.7 percent year-on-year) in net profit at Rs 323.1 crore.

Net interest income is expected to increase by 1.9 percent Q-o-Q (up 3.5 percent Y-o-Y) to Rs 971.7 crore, according to Emkay Equity Advisory.

Emkay Equity Advisory on Andhra Bank

Andhra Bank is expected to report modest 4 percent Y-o-Y growth in NII led by 13 percent Y-o-Y growth in loan portfolio.

Margins are expected to contract 6bps Q-o-Q on account of 4bps Q-o-Q decline in yield on assets and 140bps Q-o-Q contraction in LDR to 78 percent.

With higher operating costs and higher provisioning requirement, net profit is expected to decline by 11 percent Y-o-Y. Factoring in gross slippages at Rs6bn and credit cost at +100bps annualized.

20.07 | 0 komentar | Read More

Go short till 5,750; bet on pharma, avoid PSUs: Experts

Jul 30, 2013, 05.52 PM IST

Market experts suggest investors to go short till 5,750 and recommend bets on the pharma sector while clearly avoiding PSUs.

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Go short till 5,750; bet on pharma, avoid PSUs: Experts

Market experts suggest investors to go short till 5,750 and recommend bets on the pharma sector while clearly avoiding PSUs.

Like this story, share it with millions of investors on M3

Go short till 5,750; bet on pharma, avoid PSUs: Experts

Market experts suggest investors to go short till 5,750 and recommend bets on the pharma sector while clearly avoiding PSUs.

Share  .  Email  .  Print  .  A+A-

The BSE- Sensex closed trade at 19,348.34 , down 244.94 points while the Nifty fell 77.05 points to close trade at 5,754.60. With the Nifty below the 5,800-mark, Sudarshan Sukhani of s2analytics says that the trend is not surprising.

"Clearly, the markets are in a downtrend. Investors should be positioned on the short side. The Nifty at 5,750 has a very strong support zone. Unless something unusual happens, this is the point at which the Nifty should pause a bit before turning choppy. This is probably the time when profits should be booked on short positions," he told CNBC-TV18.

On the reason for the market's disappointment, Tirthankar Patnaik, EVP - institutional sales, Religare Capital Markets explains that that the central bank's decision to leave rates unchanged may have been viewed as  dovish and inadequate to either stem depreciation in the rupee or abandoning the currency to its fate. "This ambivalence might have probably spooked the market."

With the rupee returning to the 60-mark, Tirthankar Patnaik estimates the currency to rule in a 58-to-62 band. "However, the rupee has a downside bias because I believe the weakness in the currency is not domestic in nature."

On Dr Reddy's Laboratories , Tirthankar Patnaik says that the revenue declared came as a negative surprise. "Though I remain positive on the pharma space and favour Dr Reddys along, Sun Pharma and Lupin . Overall, the fall in revenue is a cause of concern."

Recommending investors a strategy for PSU banks, Patnaik says, "Over the last three quarters, I have maintained that PSU banks cannot be part of core holdings. PSU-bank stocks are lucrative only during earnings season when there are trading profits to be made."

On whether concerns on the monetary policy and the rupee have lowered the range for market movement, Patnaik adds that this will happen only when FMCG stocks capitulate. "The FMCG sector is most sensitive to worries regarding growth and stiff interest rates."

From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

20.07 | 0 komentar | Read More

Buy HUL near Rs 550: Standard Chartered

Jul 30, 2013, 06.24 PM IST

According to Sanjay Singh of Standard Chartered, one may buy Hindustan Unilever (HUL) near Rs 550. "Rs 550 is the floor for this stock," he adds.

Like this story, share it with millions of investors on M3

Buy HUL near Rs 550: Standard Chartered

According to Sanjay Singh of Standard Chartered, one may buy Hindustan Unilever (HUL) near Rs 550. "Rs 550 is the floor for this stock," he adds.

Like this story, share it with millions of investors on M3

Buy HUL near Rs 550: Standard Chartered

According to Sanjay Singh of Standard Chartered, one may buy Hindustan Unilever (HUL) near Rs 550. "Rs 550 is the floor for this stock," he adds.

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Sanjay Singh of Standard Chartered told CNBC-TV18, "We have written in our note that because of the open offer hangover it will be a long time before HUL stock prices align fundamentally to fundamentals and hence valuations will be little ahead of historical. There is no point in comparing historical valuations. Also many of the medium term and short-term investors have moved out of the stock in the open offer and hence whoever is left is more long only and even they are probably underweight on the stock."

He further added, "Given this background my sense is we will not see any dramatic fall in the stock or any dramatic change in valuations in the near term in the next three-six months. Hence, our call has been even before the open offer that the stock will not go below Rs 550; Rs 550 is the floor for this stock. I would look at buying the stock at those levels if at all it comes near that."

Action in Hindustan Unilever

From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

20.07 | 0 komentar | Read More

Dr Reddy's Q1 net profit sen up 25 percent YoY to Rs 421cr

Jul 29, 2013, 06.17 PM IST

The generic drugs maker's earnings will be boosted by strong growth in the US and Russian generics drugs market and better currency realisations.

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Dr Reddy's Q1 net profit sen up 25 percent YoY to Rs 421cr

The generic drugs maker's earnings will be boosted by strong growth in the US and Russian generics drugs market and better currency realisations.

Like this story, share it with millions of investors on M3

Dr Reddy's Q1 net profit sen up 25 percent YoY to Rs 421cr

The generic drugs maker's earnings will be boosted by strong growth in the US and Russian generics drugs market and better currency realisations.

Share  .  Email  .  Print  .  A+A-

Moneycontrol Bureau

Generic drugs maker Dr Reddy's Laboratories will report its first quarter earnings on Tuesday. Analysts on average expect the Hyderabad-based company to report a net profit of Rs 421 crore, up 25 percent year-on-year, according to a CNBC-TV18 poll.

The company's revenue growth is seen at Rs 3,127 crore, up 23 percent year-on-year.

Dr Reddy's earnings will be boosted by a strong growth in the US market and better currency realisations, apart from lower base.

Its EBITDA (earnings before interest, taxes, depreciation and amortization)is expected to rise 64 percent to Rs 641 crore, while operating profit margin is seen expanding to 21 percent from 15.4 percent.

Analysts expect Dr Reddy's US market sales to grow 20 percent year-on-year over FY2013-15, while the Russian market is seen growing 15-17 percent.

The domestic business, however, could see some slowdown and is estimated to grow 10-13 percent YoY. 

"Dr Reddy's year-on-year revenue growth could be led by strong growth in the US and Russia generics and steady growth in domestic formulations," says HDFC Securities.

The brokerage expects US revenue to grow by over 30 percent in Q1 driven by the launch of generic version of Propecia (anti-hair loss drug), Zometa (injection to prevent skeletal fractures in patients with cancers), Reclast (treating osteoporosis) and Accutane (for cystic acne and chemotherapy treatment for brain, pancreatic and other cancers).

KEY THINGS TO WATCH

- Q1 margins
- Growth across key markets
- Outlook for the rest of the year
- Visibility of key US ANDA pipeline monetization

STOCK WATCH

Dr Reddy's shares closed down 3.3 percent at Rs 2,217.70 on NSE on Monday.

Since March-end, the stock has gained 25.5 percent, significantly outperforming the wider Nifty index, which is up close to 3 percent during the same period. The CNX pharma index has gained 20 percent during the same period.

Also Read: Colgate-Palmolive Q1 net profit up 58% on exceptional gain

From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

20.07 | 0 komentar | Read More

RBI hints at more liquidity measures in policy action

Moneycontrol Bureau

The Reserve Bank of India (RBI) on Monday hinted at controlling fund flows or the market liquidity as it is known in the banking parlance, to take policy stance giving priority to both the growth-inflation balance and macro-financial stability.

In its macroeconomic and monetary developments review for April-June quarter, 2013-14; the central expressed hope for some improvement on growth front but the recovery is likely to be slow-paced. Professional forecasters outside the RBI have projected GDP growth at 5.7 percent, revised downwards from 6 percent in May 2013.

"Going forward, the Reserve Bank will endeavour to actively manage liquidity to reinforce monetary transmission that is consistent with the growth-inflation balance and macro-financial stability," the central bank said in the macroeconomic and monetary developments review, released on the day before the RBI monetary policy.

Also read: Is RBI June quarter policy a non-event?

More updates follow....

20.07 | 0 komentar | Read More

City Union Bank Q1 net up 22% at Rs 90 cr on low provisions

City Union Bank 's first quarter net profit surged 22 percent year-on-year to Rs 90.3 crore on lower provisions.

Net interest income jumped 35.8 percent to Rs 187.4 crore in April-June quarter from Rs 138 crore in a year ago period.

Gross non-performing asset (NPA) increased 12 bps quarter-on-quarter to 1.25 percent, but net NPA was unchanged at 0.63 percent.

Provisions and contingencies halved to Rs 20.5 crore in June quarter as against Rs 43.7 crore in previous quarter.

Also Read - Allahabad Bank Q1 net fall 20% on surge of bad loans

20.07 | 0 komentar | Read More

Go short on Nifty; buy Idea, McLeod Russel, Cipla: Experts

Moneycontrol Bureau

Indian Indices continued their downward journey as they fell for the fourth consecutive session Monday with the Sensex shedding 155 points ahead of the central bank's first quarter review of monetary policy on July 30.

Investors' confidence has remained shaky since last Tuesday, when Reserve Bank of India announced additional measure to curb volatility in rupee.

The BSE Sensex closed at 19593.28 while the NSE Nifty fell 54.55 points to finish at 5831.65, as the cut got deeper in midcaps. The BSE Midcap Index fell 1.3 percent. Technical analyst Sudarshan Sukhani of  S2analytics.com advised to go short on Nifty as it is caught in a downtrend.

Also read: Crisil warns money squeeze to worsen asset quality of banks

Most experts believe that RBI policy scheduled on Tuesday would be a non-event. "RBI would not take any drastic measures in terms of raising rates or any such action that would further weaken the economy. But it could take some temporary measures that it has been doing over the last couple of weeks," Gopi Suvanam, Founder, InvestWorks told CNBC-TV18. He stressed that there will not be any change in key rates at this moment.

Suvanam believes that RBI may give some comforting statements considering that there has been lot of hostility build around lack of transparency against RBI. "So to counter that I think RBI is going to give some kind of comfort to banks at least that these measures are not going to be permanent and they would relook at them at certain stage later on," he added.

Many state-owned banks like Indian Bank and Allahabad Bank today disappointed market with its first quarter earnings. Suvanam advised investor to stay away from public sector banks. "So I could make a tactical call to invest in some of these private sector banks, at the same time avoid PSU banks because they have a lot of issues like NPA and legacy issues," he said. He advised to invest private sector banks like IndusInd Bank , Yes Bank or Axis Bank for a short-term period.

Infrastructure company  Jaiprakash Associate today reported 141 percent jump in net profit at Rs 334.5 crore due to an exceptional gain of Rs 395 crore on sale of JP Infra shares.

SP Tulsian of sptulsian.com is highly disappointed with results. The company's the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is entirely been eaten away by Rs 590 crore of interest and Rs 195 crore of depreciation.

"I don't know that from what parameters the results can be seen as positive or as good and since then the market has in fact been going up on the share but I see these results really very bad, very pathetic," Tulsian said.  He added that the company's EBIT margin of 11.11 percent is probably the lowest when compared with the Ambuja and ACC.

If you have Rs 800 crore every quarter likely to go on interest and depreciation I don't understand that how company can really sustain in the next three quarters of FY14.

Invest in these stocks

In current downtrend, Suvanam asks investors to focus on sectors like pharmaceutical, which have not really achieved its peak yet. Among pharma, he prefers Cipla . Among technology stocks Suvanam advises to start building position on Tech Mahindra and HCL Technologies .

Among telecom he prefers Idea Cellular . "I will be positive on Idea going forward. I won't be really positive on Reliance Communications . We have to see what is happening to various newsflows that is coming. Telecom is a mixed bag. So, I would take it with a pinch of salt," he added.

Tulsian gave a long call for McLeod Russel in the last trading hour of market. "We have seen the numbers having posted by the company which are seen good. In fact the tea and coffee companies are posting good numbers. Tata Coffee has posted good numbers. So, some value buying is seen emerging on the stocks. So, go long with a target of Rs 291 and stop loss of Rs 285," he added. 

20.07 | 0 komentar | Read More

Restructure cheaper; no worry on fall in cash level: Ambuja

Forty-eight hours after Ambuja Cements announced restructuring of ownership by parent Holcim , the airwaves have been flooded with reactions and concerns from minority shareholders, investors, and analysts.

Ambuja Cements managing director, Onne Van Der Weijde, in an interview to CNBC-TV18, explains that a restructuring of operations is more cost-effective and offers more synergies than a full merger.

Weijde adds that deployment of cash does not deplete Ambuja's cash reserves significantly and would still allow for acquistions and expansion.

Below is the edited transcript of the interview on CNBC-TV18

Q: Let me start by asking you, if this was the structure that you had originally envisaged when you entered India and you acquired control over a period of time in two leading cement companies — ACC and Ambuja — was subsidiarisation the first step towards full consolidation?

A: No I don't think so. That was not part of our plans at that time. It was developed over time. But first I would like to explain what we are doing now. We want to create more value by going after synergies.

We have been working with Ambuja and I was previously the CFO of ACC . We have been working with both companies to achieve synergies, cost reductions, implement policies and set up governance structures. A lot has been already implemented. Earnings at Ambuja and ACC are under pressure due to impact on  the topline from poor growth in volumes and prices. So, we started to focus on measures to improve the bottomline.

Q: Can you explain why you did not find it appropriate to carry out a full merger at this point in time?

A: We have targeted two specific areas of synergies and I don't think a full merger is needed to achieve that.

Q: So is a merger still an option?

A: It is still an option that we will exercise after synergies in a majority of areas are achieved. Though a full merger may offer synergies, there is also a significant element of cost involved.

Q: Won't implementing synergies also take up a lot of time? In the newly-formed India management committee structure, the management of both ACC and Ambuja will have to work together along with representatives from parent Holcim to arrive at synergies. So why not conduct the merger and then arrive at synergies?

A: The synergies would result in benefits worth Rs 900 crore which is not a small amount.

Q: Wouldn't a merger offer increased benefits?

A: Yes, but a merger might turn out to be a distraction too. It is only after considerable evaluation of the options available that we decided to enable the synergies first.

I would also like to clarify the management structure you mentioned. There are completely two independent management teams and it is only in the targeted areas that the management of both companies will work together. And there will be no participation by representatives from Holcim.

Q: Did you get unanimous approval from the independent directors for this restructuring proposal?

A: Absolutely.

Q: And did your independent directors raise questions?

A: They raised a lot of questions and wanted a lot of explanations.

Q: Did any of your independent directors raise questions about the rationale for Ambuja Cements having to buyback 9.7 percent of its own equity owned by Holcim India?

A: They were some initial questions about whether it was necessary. But when I explained that it was basically a washout and was for historic reasons, they agreed. The shares that we are acquiring will be cancelled.

20.07 | 0 komentar | Read More

India still second fastest growing economy: Chidambaram

Noting that India continued to be the second fastest growing economy in the world after China, Finance Minister P Chidambaram today said people should not be worried about the current slow down and expressed hope of achieving six per cent growth this fiscal.    

"People should remember India continues to be the second fastest growing economy after China. Even China's growth which was at 10 per cent has come down to seven per cent now, while our growth has slid to five per cent from nine per cent," he said at a bank function here.

Also read: Govt to focus on projects where DBT is doable: Chidambaram
   
"Economic slowdown is there in all the countries. When there is slow growth rate in the world, India cannot remain unaffected," he said inaugurating the 2110th branch of the Indian Bank in this small town in his Sivaganga Lok Sabha constituency.
   
Chidambaram said even European countries had been affected by the economic slow down.    

Many countries including Mexico Brazil were behind India, he said.
   
Expressing hope that the country's growth would touch six per cent this year, he said "People should be confident..self confident and take bank loan to invest in farm sector, small industries, housing etc. You should hope for bright tomorrow, and not worry about the slow down."
   
On the petroleum products prices, he said it had gone up due to the price of crude oil touching 108 US Dollars per barrel, adding the price of petrol and diesel would show a declining trend only if crude came below USD 100 per barrel.
   
India imports over 70 per cent of its oil demand and efforts are on to explore crude and gas in the country. "Sometimes they succeed in hitting crude and sometimes they do not, and it requires a lot investments..thousands of crores...
   
"We have to reduce the import of crude to fifty per cent for reducing the petrol and diesel prices," he said.    

Chidambaram also said plans were on to open 8,000 new bank branches this year. This would create 50,000 jobs and would also help the economy to grow.
   
He suggested women should form more Self-help groups and obtain loans boldly to start new ventures.   

Earlier, Indian Bank Chairman and Managing Director T M Bhasin welcomed the Minister and other participants.

20.07 | 0 komentar | Read More

Lanco in talks to restructure $1.5 bn debt - paper

Infrastructure builder Lanco Infratech has started discussion with its bankers to restructure debt worth Rs 90 billion as a weak economy takes a toll, the Business Standard newspaper reported on Saturday.

Also read: Government mulls plan to start coal banking system

If the process is approved by lenders, Lanco would be the second debt-laden company to go for major loan restructuring in the last year after lenders to wind turbine maker Suzlon Energy in November agreed to restructure about 110 billion rupees of its debt.

Lanco, which produces power and builds roads, and residential and commercial buildings in India, is looking to restructure a part of its debt after its attempts to sell some assets failed, the newspaper reported, citing unidentified bankers.

The company, which acquired Australia's Griffin Coal Mining Co for about $760 million in 2011, is exploring the option, a Lanco spokesman told Reuters, adding the possible process would not impact any of its units including the Australian business.

He declined to give details.

Lanco, which had total debt of 336 billion rupees, as of the end of March, posted losses in the last two financial years, as the weak Indian economy, growing at its slowest in a decade, hit infrastructure investment.

Banks bring cases to the so-called corporate debt restructuring process to negotiate relaxed repayment terms with struggling borrowers.

"We told the company that something needed to be done about the huge debt, as it had exhausted all its options," a senior state-run bank official was quoted in the Business Standard report as saying about the possible Lanco restructuring.

Project bottlenecks, largely because of problems in acquiring land and high funding costs, have also sapped investment in the infrastructure industry in Asia's third-largest economy.

Reflecting the poor economic climate, the earnings outlook of many mid-sized and debt-laden Indian infrastructure builders such as Jaiprakash Associates Ltd and GMR Infrastructure Ltd has deteriorated.

Many lenders have expressed worry about loans to the power, commercial real estate, construction, aviation, textile and metals sectors, which are among those hardest-hit by slowing growth and sluggish policymaking that has deterred investment.

20.07 | 0 komentar | Read More

Smart ways to deal with sudden lumpsum income

BankBazaar.com

Pavitra received Rs 3.5 lakh from the sale of a family property in her native place. She has a housing loan of Rs 30 Lakhs for which she is paying a monthly EMI of Rs 35,000. She has completed 2 years of the 7 years of the loan tenure. Pavitra is thinking about repaying a part of the loan with the entire inheritance amount, while her husband is of the opinion that they must invest a part of it for their children's education in mutual funds or equity shares.

Often, these complex decisions spring in front of us when confronted with a lump sum gain on one hand and a mortgage on the other. In case of a car loan or a personal loan, the choice is very clear - one must repay the loan as soon as possible as the interest is very high and the value of a loan investment only depreciates.

Besides, these loans do not have a long tenure as housing loans have.

Home Loan Outlook

In Pavitra's case, at a monthly interest of 10.5 percent, she ends up paying around Rs 3,15,000 annually only on the interest amount which works out to Rs 47,25,000 in 15 years, raising the cost of the house by over 50 percent.

If she uses her inheritance money to repay the loan, the number of instalments she has to pay will be reduced which implies that the total amount to be repaid will be reduced since the duration of the loan will come down from the remaining 5 years to just under 4 years

Comparative Analysis of Actual Savings and Growth of Corpus

How much benefit you accrue from investing on an alternate source depends on the type of investment you are making. In Pavitra's case, if instead of repaying the home loan, she would have invested the amount in purchasing a Blue Chip Fund or a child plan for her daughter's education, the returns cannot be forecasted.

However, if the blue chip fund returns after 3 years' investment were to give her a return of Rs 8 Lakhs then she would be able to pay off a bigger chunk of her debt and saved 2 years' instalments instead of 1 year.

Another scenario is where a person might also have a personal or a car loan. In such a case, it is best to pre-pay that loan first as the interest rate is higher in the shorter term.

A Case for Prepayment

The greatest advantage of pre-payment of a loan is that it significantly reduces the interest cost which will bring down the purchase price of the house by a large amount. So, even if you are considering reselling the property to purchase a bigger property in the future, you will be able to recover the cost faster and make better profits.

However, you must understand that you have already paid the loan processing charges for the entire tenure; so, if you are earning better returns elsewhere, then you can consider it so that you can utilise the returns to pay off a bigger portion of the loan.

Tax Rebate

Home loans attract a tax rebate under the Income Tax Act, so often individuals prefer to continue their loan for the entire duration. However, if you are paying an EMI of Rs 35,000 and your tax saving is Rs 1000; it does not appear to be a very big saving.

Besides, there are other tax saving avenues which are more beneficial. You could even invest in another property as real estate delivers the highest returns among all investment classes.

What are the Investment Avenues in Such Cases?

If you do not want to prepay your loan with the extra amount you have, then there are the following investment options:

• Equity: If you have a high risk appetite, then investing in equity can generate more returns than you would have saved from pre-paying the home loan.

• Real Estate: You can invest in another property. It would mean an additional loan, but if you can earn a rental income, then the loan will get repaid partly by the rental returns. Besides, you can sell one property to leverage the loan repayment for the other property.

• Provident Fund: PPF gives you a tax benefit for the entire Rs 1 Lakh you deposit in the account and attracts an interest of around 8 percent. You must ensure that you complete the entire deposit amount for the year before paying off the debt. This will also set up a savings corpus for the future.

You have to pay the EMI on your housing loan till it is completely repaid. The EMI and the interest rate amount also remain constant. On the other hand, the return on investment from equities fluctuates and from secured bank deposits, the interest rate is not as high as it is on the loan.

If you are nearing retirement, it is most likely you are close to the final installment of your home loan. If you repay your home loan earlier, you can concentrate on savings and investment for your post-retirement years

For those who are younger and still have a few years, do not compromise on your other financial responsibilities such as insurance premiums, child plans, savings corpus to pay off the home loan.

   
 

BankBazaar.com   is an online marketplace where you can instantly get the lowest loan rates , compare and apply online for your personal loan , home loan ,   car loan   and   credit card   from India's leading banks and NBFCs.

20.07 | 0 komentar | Read More

Restructure cheaper; no worry on fall in cash level: Ambuja

Forty-eight hours after Ambuja Cements announced restructuring of ownership by parent Holcim , the airwaves have been flooded with reactions and concerns from minority shareholders, investors, and analysts.

Ambuja Cements managing director, Onne Van Der Weijde, in an interview to CNBC-TV18, explains that a restructuring of operations is more cost-effective and offers more synergies than a full merger.

Weijde adds that deployment of cash does not deplete Ambuja's cash reserves significantly and would still allow for acquistions and expansion.

Below is the edited transcript of the interview on CNBC-TV18

Q: Let me start by asking you, if this was the structure that you had originally envisaged when you entered India and you acquired control over a period of time in two leading cement companies — ACC and Ambuja — was subsidiarisation the first step towards full consolidation?

A: No I don't think so. That was not part of our plans at that time. It was developed over time. But first I would like to explain what we are doing now. We want to create more value by going after synergies.

We have been working with Ambuja and I was previously the CFO of ACC. We have been working with both companies to achieve synergies, cost reductions, implement policies and set up governance structures. A lot has been already implemented. Earnings at Ambuja and ACC are under pressure due to impact on  the topline from poor growth in volumes and prices. So, we started to focus on measures to improve the bottomline.

Q: Can you explain why you did not find it appropriate to carry out a full merger at this point in time?

A: We have targeted two specific areas of synergies and I don't think a full merger is needed to achieve that.

Q: So is a merger still an option?

A: It is still an option that we will exercise after synergies in a majority of areas are achieved. Though a full merger may offer synergies, there is also a significant element of cost involved.

Q: Won't implementing synergies also take up a lot of time? In the newly-formed India management committee structure, the management of both ACC and Ambuja will have to work together along with representatives from parent Holcim to arrive at synergies. So why not conduct the merger and then arrive at synergies?

A: The synergies would result in benefits worth Rs 900 crore which is not a small amount.

Q: Wouldn't a merger offer increased benefits?

A: Yes, but a merger might turn out to be a distraction too. It is only after considerable evaluation of the options available that we decided to enable the synergies first.

I would also like to clarify the management structure you mentioned. There are completely two independent management teams and it is only in the targeted areas that the management of both companies will work together. And there will be no participation by representatives from Holcim.

Q: Did you get unanimous approval from the independent directors for this restructuring proposal?

A: Absolutely.

Q: And did your independent directors raise questions?

A: They raised a lot of questions and wanted a lot of explanations.

Q: Did any of your independent directors raise questions about the rationale for Ambuja Cements having to buyback 9.7 percent of its own equity owned by Holcim India?

A: They were some initial questions about whether it was necessary. But when I explained that it was basically a washout and was for historic reasons, they agreed. The shares that we are acquiring will be cancelled.

20.07 | 0 komentar | Read More

India still second fastest growing economy: Chidambaram

Noting that India continued to be the second fastest growing economy in the world after China, Finance Minister P Chidambaram today said people should not be worried about the current slow down and expressed hope of achieving six per cent growth this fiscal.    

"People should remember India continues to be the second fastest growing economy after China. Even China's growth which was at 10 per cent has come down to seven per cent now, while our growth has slid to five per cent from nine per cent," he said at a bank function here.

Also read: Govt to focus on projects where DBT is doable: Chidambaram
   
"Economic slowdown is there in all the countries. When there is slow growth rate in the world, India cannot remain unaffected," he said inaugurating the 2110th branch of the Indian Bank in this small town in his Sivaganga Lok Sabha constituency.
   
Chidambaram said even European countries had been affected by the economic slow down.    

Many countries including Mexico Brazil were behind India, he said.
   
Expressing hope that the country's growth would touch six per cent this year, he said "People should be confident..self confident and take bank loan to invest in farm sector, small industries, housing etc. You should hope for bright tomorrow, and not worry about the slow down."
   
On the petroleum products prices, he said it had gone up due to the price of crude oil touching 108 US Dollars per barrel, adding the price of petrol and diesel would show a declining trend only if crude came below USD 100 per barrel.
   
India imports over 70 per cent of its oil demand and efforts are on to explore crude and gas in the country. "Sometimes they succeed in hitting crude and sometimes they do not, and it requires a lot investments..thousands of crores...
   
"We have to reduce the import of crude to fifty per cent for reducing the petrol and diesel prices," he said.    

Chidambaram also said plans were on to open 8,000 new bank branches this year. This would create 50,000 jobs and would also help the economy to grow.
   
He suggested women should form more Self-help groups and obtain loans boldly to start new ventures.   

Earlier, Indian Bank Chairman and Managing Director T M Bhasin welcomed the Minister and other participants.

20.07 | 0 komentar | Read More

Lanco in talks to restructure $1.5 bn debt - paper

Infrastructure builder Lanco Infratech has started discussion with its bankers to restructure debt worth Rs 90 billion as a weak economy takes a toll, the Business Standard newspaper reported on Saturday.

Also read: Government mulls plan to start coal banking system

If the process is approved by lenders, Lanco would be the second debt-laden company to go for major loan restructuring in the last year after lenders to wind turbine maker Suzlon Energy in November agreed to restructure about 110 billion rupees of its debt.

Lanco, which produces power and builds roads, and residential and commercial buildings in India, is looking to restructure a part of its debt after its attempts to sell some assets failed, the newspaper reported, citing unidentified bankers.

The company, which acquired Australia's Griffin Coal Mining Co for about $760 million in 2011, is exploring the option, a Lanco spokesman told Reuters, adding the possible process would not impact any of its units including the Australian business.

He declined to give details.

Lanco, which had total debt of 336 billion rupees, as of the end of March, posted losses in the last two financial years, as the weak Indian economy, growing at its slowest in a decade, hit infrastructure investment.

Banks bring cases to the so-called corporate debt restructuring process to negotiate relaxed repayment terms with struggling borrowers.

"We told the company that something needed to be done about the huge debt, as it had exhausted all its options," a senior state-run bank official was quoted in the Business Standard report as saying about the possible Lanco restructuring.

Project bottlenecks, largely because of problems in acquiring land and high funding costs, have also sapped investment in the infrastructure industry in Asia's third-largest economy.

Reflecting the poor economic climate, the earnings outlook of many mid-sized and debt-laden Indian infrastructure builders such as Jaiprakash Associates Ltd and GMR Infrastructure Ltd has deteriorated.

Many lenders have expressed worry about loans to the power, commercial real estate, construction, aviation, textile and metals sectors, which are among those hardest-hit by slowing growth and sluggish policymaking that has deterred investment.

20.07 | 0 komentar | Read More

Smart ways to deal with sudden lumpsum income

BankBazaar.com

Pavitra received Rs 3.5 lakh from the sale of a family property in her native place. She has a housing loan of Rs 30 Lakhs for which she is paying a monthly EMI of Rs 35,000. She has completed 2 years of the 7 years of the loan tenure. Pavitra is thinking about repaying a part of the loan with the entire inheritance amount, while her husband is of the opinion that they must invest a part of it for their children's education in mutual funds or equity shares.

Often, these complex decisions spring in front of us when confronted with a lump sum gain on one hand and a mortgage on the other. In case of a car loan or a personal loan, the choice is very clear - one must repay the loan as soon as possible as the interest is very high and the value of a loan investment only depreciates.

Besides, these loans do not have a long tenure as housing loans have.

Home Loan Outlook

In Pavitra's case, at a monthly interest of 10.5 percent, she ends up paying around Rs 3,15,000 annually only on the interest amount which works out to Rs 47,25,000 in 15 years, raising the cost of the house by over 50 percent.

If she uses her inheritance money to repay the loan, the number of instalments she has to pay will be reduced which implies that the total amount to be repaid will be reduced since the duration of the loan will come down from the remaining 5 years to just under 4 years

Comparative Analysis of Actual Savings and Growth of Corpus

How much benefit you accrue from investing on an alternate source depends on the type of investment you are making. In Pavitra's case, if instead of repaying the home loan, she would have invested the amount in purchasing a Blue Chip Fund or a child plan for her daughter's education, the returns cannot be forecasted.

However, if the blue chip fund returns after 3 years' investment were to give her a return of Rs 8 Lakhs then she would be able to pay off a bigger chunk of her debt and saved 2 years' instalments instead of 1 year.

Another scenario is where a person might also have a personal or a car loan. In such a case, it is best to pre-pay that loan first as the interest rate is higher in the shorter term.

A Case for Prepayment

The greatest advantage of pre-payment of a loan is that it significantly reduces the interest cost which will bring down the purchase price of the house by a large amount. So, even if you are considering reselling the property to purchase a bigger property in the future, you will be able to recover the cost faster and make better profits.

However, you must understand that you have already paid the loan processing charges for the entire tenure; so, if you are earning better returns elsewhere, then you can consider it so that you can utilise the returns to pay off a bigger portion of the loan.

Tax Rebate

Home loans attract a tax rebate under the Income Tax Act, so often individuals prefer to continue their loan for the entire duration. However, if you are paying an EMI of Rs 35,000 and your tax saving is Rs 1000; it does not appear to be a very big saving.

Besides, there are other tax saving avenues which are more beneficial. You could even invest in another property as real estate delivers the highest returns among all investment classes.

What are the Investment Avenues in Such Cases?

If you do not want to prepay your loan with the extra amount you have, then there are the following investment options:

• Equity: If you have a high risk appetite, then investing in equity can generate more returns than you would have saved from pre-paying the home loan.

• Real Estate: You can invest in another property. It would mean an additional loan, but if you can earn a rental income, then the loan will get repaid partly by the rental returns. Besides, you can sell one property to leverage the loan repayment for the other property.

• Provident Fund: PPF gives you a tax benefit for the entire Rs 1 Lakh you deposit in the account and attracts an interest of around 8 percent. You must ensure that you complete the entire deposit amount for the year before paying off the debt. This will also set up a savings corpus for the future.

You have to pay the EMI on your housing loan till it is completely repaid. The EMI and the interest rate amount also remain constant. On the other hand, the return on investment from equities fluctuates and from secured bank deposits, the interest rate is not as high as it is on the loan.

If you are nearing retirement, it is most likely you are close to the final installment of your home loan. If you repay your home loan earlier, you can concentrate on savings and investment for your post-retirement years

For those who are younger and still have a few years, do not compromise on your other financial responsibilities such as insurance premiums, child plans, savings corpus to pay off the home loan.

   
 

BankBazaar.com   is an online marketplace where you can instantly get the lowest loan rates , compare and apply online for your personal loan , home loan ,   car loan   and   credit card   from India's leading banks and NBFCs.

20.07 | 0 komentar | Read More

FO expert Jitendra Panda on ratio spreads, ladders more

The direction of the market can surprise the most experienced of investors or traders and if the direction is opposite to the derivatives position you hold one loses a whole lot of money. But if one did not invest and the market moved in favour then a great opportunity is lost. The answer to this puzzle lies in strategies like ratio spreads, ladders etc.

Jitendra Panda, Business Head-Broking, Capital First explain that ratio spreads are nothing but an extension of a vertical spread and here the investor basically has to take a view whether it is bullish or bearish. He further elucidates the difference between the bull spread and a ratio spread.

Below is the verbatim transcript of his interview to CNBC-TV18

Q: If we start with ratio spreads what kind of psychological profile or sentiment of the investor do they answer to?

A: Ratio spreads are nothing but an extension of a vertical spread. Here the investor basically has to take a view whether it is bullish or bearish. If he is bullish then he can take a bull spread, but then here is using ratio. What is the difference between a bull spread and a ratio spread? In a bull spread you are buying at-the-money (ATM) or in-the-money (ITM) Call option and selling a higher Call option. For 1:1 it is called a bull spread plain vanilla.

However, if you are buying one Call option and selling two Call option out-of-the-money (OTM) then it is called a 1:2 ratio spread. This ratio can be 1:2, 1:3 based on the risk appetite. So the ratio spreads are done to gain near the premiums.

Since you are selling two OTM Call options you get twice the money in and so your outflow is very low for buying the Call options. The advantage is your payout is very low, but that advantage comes with a higher risk.

Q: Can you give us example of how much money could you possibly lose if your ratio spread does not work as you have perceived it?

A: Let us take an example of Tata Steel. For our example the price is at Rs 300 in the stock market. So ATM option is Rs 300. I buy a Call option of ATM and if it cost me for example, Rs 10. In a ratio spread I will try to sell OTM Call option.

For example, I believe it is moderately bullish I will go and sell two Call options of Rs 320. Each option is at Rs 4 there, so when I sell two Call options I get Rs 8, Rs 4 each for the option, so my inflow comes Rs 8, my outflow was Rs 10, so the net cost to me is only Rs 2.

So, I have bought a Rs 300 Call option of TISCO in a bull ratio spread with Rs 2. So anything above Rs 302 which is my breakeven point, the strike price plus the outflow, the risk if TISCO explodes, suddenly there is some event and it moves above Rs 320. My risk can go to unlimited the higher it goes, because I have to pay because I have sold two Call options. So the risk is unlimited if it explodes above Rs 320, but if it remains within Rs 320 I make Rs 18 profit.

Q: Your cost Rs 302 because of the premium that you have brought in which was about Rs 8. Beyond Rs 320 that is where you start to make losses. How do you decide that within this Rs 18 range when do you book your profits?

A: If you go through the books they will say at Rs 320 you selloff. But practically when you see Rs 302 we have seen that people exit at Rs 310-315 range, depending on the risk appetite. As you move ahead the option premium of Rs 320 will move faster, so your losses will start increasing. So you need not wait for that.

So Rs 310-315 range is where you need to exit and make your gains. For Rs 2 you will have maybe Rs 5-6 profit after paying out all the Rs 320. So you will make three times of your money in a month and that is fair enough. They say you control your greed in this market. This is all about greed and fear and we have read and we have learned so much, now let us put in practice.

Q: How do you manage factors like time value, the volatility on a counter like this?

A: Spreads always have this advantage. The time value comes up and that is what you are doing. When you are in a ratio spread, when you are buying one Call option you are paying some time value, but when you are selling two options of the outside you are in fact gaining the time value, because those options have time value which you are taking in. So you are gaining those time values, because you are selling Rs 320 Call options of Tata Steel.

So ratio spread gives advantage that if you feel that Rs 320 is a major resistance level and may not crossover the markets, ratio spreads are most popular at those times. When you know that those are critical levels on valuations fronts or on technical fronts or within the timeframe available for the option, you feel that Rs 320 is a very stretched target options available. You sell them and you have risk in your hand and some risk you have to pay.

Q: How popular are Put ratio spreads? When you use such a strategy?

A: Since ratio spreads give you very low cost and an advantage, because your breakeven points are very closer to the options which you have bought, because you sold in case of a bearish spread Put options. In case of a bear spread, it is very difficult to be bearish in the market and play the market.

However, bear Put spread, when you buy ATM Put option and sell two or more higher OTM Put options you gain. You gain the benefit that market moves little down also and when they fall they have that advantage of taking it. But I would like to warn you, based on markets, when the market goes up they go slowly and steadily, but then they fall they fall like a ping-pong ball. Doing a ratio spread on Put side, the bearish ratio spread, you have to be very cautious.

20.07 | 0 komentar | Read More

DoT to notify new licensing framework next week

Jul 26, 2013, 06.05 PM IST

The unified licensing regime will enable telecom companies to provide multiple services including telephony, broadband and DTH with just one license, reports Malvika Jain of CNBC-TV18.

Like this story, share it with millions of investors on M3

DoT to notify new licensing framework next week

The unified licensing regime will enable telecom companies to provide multiple services including telephony, broadband and DTH with just one license, reports Malvika Jain of CNBC-TV18.

Like this story, share it with millions of investors on M3

DoT to notify new licensing framework next week

The unified licensing regime will enable telecom companies to provide multiple services including telephony, broadband and DTH with just one license, reports Malvika Jain of CNBC-TV18.

Share  .  Email  .  Print  .  A+A-

The department of telecommunications (DoT) is likely to notify the new licensing framework next week. The unified licensing regime will enable telecom companies to provide multiple services including telephone, broadband and DTH with just one license, reports Malvika Jain of CNBC-TV18.

Also Read: India, Israel to work for development of 5G technology

Everyone had been expecting that the unified licensing regime would have been notified much earlier but finally the law ministry has approved it and now it is likely to be notified next week. It was also learnt from the DoT sources that these guidelines would not need a cabinet approval. So, in a sense whatever the DoT has been promising and whatever has been approved by the ministry of law is going to be notified.

One key point to note over here is that sources have highlighted that not all parts of the guidelines would become operative as soon as they are notified because there are issues like spectrum trading on which DoT has to still work out the roadmap on which it will be seeking TRAI recommendations.

But sources indicated that going forward, spectrum sharing will be allowed. Issues such as 3G inter-circle roaming arrangements which Bharti Airtel , Vodafone and Idea Cellular have entered into would probably get settled. This matter presently is sub-judice. Telecom companies are looking forward to the unified licensing regime.

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20.07 | 0 komentar | Read More

Jet-Etihad revise SHA, investment agreement

The Etihad management will revise the shareholder and investment agreement while the final decision on effective control has been placed in the hands of the aviation ministry, report CNBC-TV18's Kritika Saxena and Rituparna Bhuyan, quoting sources.

There were four parts of the agreement that the two players had signed. One was the shareholders agreement, investment agreement, commercial cooperation agreement and the government code agreement.

Also Read: Jet-Etihad: Sebi tosses management restructuring at FIPB

According to sources, the shareholder and the investment agreement are likely to be revised. There is no major change to the commercial cooperation agreement and the government code pact that the two companies have filed.

The changes in the revised agreement are with respect to the effective control. They may comply with norms for conduct of AGM and EGM. Etihad will not have a majority on Jet Airways board seat, so that was a major concern raised by the regulators.

 They have also agreed to adhere to the corporate government norms under Clause 49 of the Companies Act. They have clarified that the vice chairman and the key executives will be decided unilaterally by the board and will not have any exclusive rights.

They will continue as public shareholder in Jet Airways and will not act in concert with Naresh Goyal. The move is aimed at skirting over the takeover code issue that the government, Securities and Exchange Board of India (Sebi) and Foreign Investment Promotion Board (FIPB) had raised. Also as a part of this particular amended agreement, they will be extending deadline.

They are likely to extend the July 31 deadline considering the fact that Directorate General of Civil Aviation (DGCA) approvals haven't come in.

It is up to the government and FIPB to take a call on revised pact. Today was the last date that they could have finally submitted to the regulatory authorities as July 29 is the last date and now, the ball is in the governments and FIPBs court.

It was agreed between various ministry's that the definition of control will be bought in sync with the Companies Bill as well as the foreign direct investment (FDI) policy.

After the Department of Industrial Policy and Promotion (DIPP) floated in note on the new definition of control, the minister of corporate affairs Thursday said that a new definition of control is not in sync with the definition of control in the Companies Bill. If DIPP's proposal is carried out then changes will have to be made to the Companies Bill definition of control and that will be long drawn process. The final call on this matter will be taken by the Cabinet itself.

If the FIPB goes ahead and takes up the proposal on Monday then it will be taking up Jet-Eithad proposal as per the definition that exists now in the FDI policy and hence this back and forth on the new definition of control.

According to FIPB, members should not impact FIPB's decision to take up the proposal. However, they also say that the effective control provisions that are paramount for this entire deal to be approved by FIPB, the final call on this matter regarding effective control will lie with the aviation ministry as it is part of their internal guidelines.

20.07 | 0 komentar | Read More

Tata Motors tries to woo dealers by doubling margins to 5%

Jul 26, 2013, 06.19 PM IST

In an attempt to stop its dealers from exiting the dealership, Tata Motors doubled the margins to 5 percent. Sources say, that it could be the highest margin in the passenger vehicle industry.

Like this story, share it with millions of investors on M3

Tata Motors tries to woo dealers by doubling margins to 5%

In an attempt to stop its dealers from exiting the dealership, Tata Motors doubled the margins to 5 percent. Sources say, that it could be the highest margin in the passenger vehicle industry.

Like this story, share it with millions of investors on M3

Tata Motors tries to woo dealers by doubling margins to 5%

In an attempt to stop its dealers from exiting the dealership, Tata Motors doubled the margins to 5 percent. Sources say, that it could be the highest margin in the passenger vehicle industry.

  .   Share  .  Email  .  Print  .  A+A-

In a bid to retain its dealers from exiting, Tata Motors decided to double their margins from 2.5 to 5 percent. Sources told CNBC-TV18's Ronojoy Banerjee this could be the highest margin in the passenger vehicle (PV) industry.

It is believed that the move comes after dealers had been deserting the country's largest automaker. Its largest dealer in Delhi, who contributed to almost 15 percent of the company's overall business in Delhi-NCR region, quit from the dealership. This is in addition of three dealers in Mumbai and Delhi each having already moved out.

Also read: Tata Motors to launch LCVs in Australia

It was reported a couple of months back regarding how the overall slowdown had been taking a toll on the vendor community.

The company's spokesperson in a sense confirming the development, said that had been some churn in the overall dealership of the company, owing to the overall slowdown in the market. The spokesperson also said that the company has added new dealers. But they did not tell us how many new dealers were inducted.

The company has also come up with a new dealer policy called the 'Horizon Next'. It is in an attempt to forge a tighter relationship. Currently, things do not look good for Tata Motors .

Tags: tata motors, automobile, dealers, exiting, dealership, delhi, mumbai, delhi-ncr, overall business, margins, margin hike, vendor community

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Scindia seeks boost to gas supply for projects worth $21 bn

With over USD 21 billion of power plants stalled due to natural gas shortfall, Power Minister Jyotiraditya Scindia wants an urgent solution on fuel woes to generate an additional 14,000 MW of electricity.

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Besides seeking untied gas currently produced or likely to be produced in future by companies like state-owned ONGC and GSPC, Scindia wants fertiliser plants to spare some gas after fulfilling the requirement for producing urea.

In an interview to PTI, Scindia said, "30 million tonne of fertiliser needs to be produced (to meet) the requirement of the agriculture sector (which) indeed was a priority but inspite of that we have to see whether there is any scope to eke out some gas for the power sector."

The Minister said the need of the hour is to get gas for the power plants during the current financial year. At present, only a third of the 72 million standard cubic meters per day of gas requirement of the 18,713 MW gas-based power plants is being met. Another 8,000 MW capacity is almost ready for commissioning but there is no gas availability to fire the plants.

"Right now, the discussion is focused as to what can be done in current fiscal. We have to see what tweaking we can do --- 3 or 4 percent or whatever it may be, to come up with some relief for the plants," he said. Admitting it was a challenging situation to provide gas to the power plants during the current fiscal, Scindia said, "In the short term i.e. in FY'14 it is going to be a problem because we need to supply 30 million tonne of fertilisers.

The next meeting of the Empowered Group of Ministers' we will look into the solution for this part, it is work in progress. "We have to see whether there is any possibility, can something (gas) be eked out for the power sector and if yes, what is it going to cost," he said. At the same time he added that one or two meetings of the EGOM cannot guarantee decisions and it is work in progress.

Last week, Defence Minister A K Antony headed EGOM rejected the proposal to cut natural gas supplies to urea plants and divert that fuel to power companies. Woes of power plants are largely due to drastic fall in production from Reliance Industries' eastern offshore KG-D6 fields, with present output of just over 14 mmscmd being enough to meet requirement of fertiliser plants, who have been accorded top priority in receipt of gas. No gas flows to 25 power plants that had signed up for 29.74 mmscmd of KG-D6 gas.

The ministerial panel would meet again soon to discuss methodology of making available gas from other sources to power sector in the short term and medium term. Asked whether pooling prices of gas is a solution to the problem of scarcity of the fuel, Scindia said it can only be decided once power sector is brought on par with fertiliser in terms of receipt of gas.

"That is a separate a issue...first we have to be able to look at giving equal priority to power and fertiliser, " he said adding that based on this decision the issue of price pooling can be dealt with. "We will then look at what are permutations and combinations for pooling of gas prices," the Minister said. However, the Power Ministry is confident of supplying gas to the plants in the long term i.e. 4-5 years.

"In the long term we do not see that there is going to be any problem with regard to the supply of gas for the 26,000 MW capacity gas plants which means four to five years down the road and also there would be no problem once the supplies from KG-D6 comes back on line and also when there are more gas finds, we will be able to supply more to the power sector," Scindia added.

20.07 | 0 komentar | Read More

Transpek Finance : Updates on outcome of AGM

Jul 25, 2013, 06.27 PM IST

Transpek Finance has submitted a copy of the minutes of the 22nd Annual General Meeting of the Company held on July 12, 2013 in relation to the financial year ended on March 31, 2013.

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Transpek Finance : Updates on outcome of AGM

Transpek Finance has submitted a copy of the minutes of the 22nd Annual General Meeting of the Company held on July 12, 2013 in relation to the financial year ended on March 31, 2013.

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Transpek Finance : Updates on outcome of AGM

Transpek Finance has submitted a copy of the minutes of the 22nd Annual General Meeting of the Company held on July 12, 2013 in relation to the financial year ended on March 31, 2013.

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Transpek Finance Ltd has submitted to BSE a copy of the minutes of the 22nd Annual General Meeting (AGM) of the Company held on July 12, 2013 in relation to the financial year ended on March 31, 2013.Source : BSE

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Zandu Realty fixes book closure for AGM

Jul 25, 2013, 06.28 PM IST

The Register of Members & Share Transfer Books of Zandu Realty will remain closed from August 08, 2013 to August 12, 2013 (both days inclusive) for the purpose of 94th Annual General Meeting of the Company to be held on August 12, 2013.

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Zandu Realty fixes book closure for AGM

The Register of Members & Share Transfer Books of Zandu Realty will remain closed from August 08, 2013 to August 12, 2013 (both days inclusive) for the purpose of 94th Annual General Meeting of the Company to be held on August 12, 2013.

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Zandu Realty fixes book closure for AGM

The Register of Members & Share Transfer Books of Zandu Realty will remain closed from August 08, 2013 to August 12, 2013 (both days inclusive) for the purpose of 94th Annual General Meeting of the Company to be held on August 12, 2013.

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Zandu Realty Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from August 08, 2013 to August 12, 2013 (both days inclusive) for the purpose of 94th Annual General Meeting (AGM) of the Company to be held on August 12, 2013.Source : BSE

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SKS Microfinance : Earnings Update - Q1 FY14

Jul 25, 2013, 06.28 PM IST

SKS Microfinance has submitted a copy of Earnings Update - Q1 FY14

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SKS Microfinance : Earnings Update - Q1 FY14

SKS Microfinance has submitted a copy of Earnings Update - Q1 FY14

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SKS Microfinance : Earnings Update - Q1 FY14

SKS Microfinance has submitted a copy of Earnings Update - Q1 FY14

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Understanding modified duration in debt mutual funds

Long term debt funds such as gilt or income are most vulnerable to the interest rate movement. A recent action by RBI on the interest rates followed by the sudden fall in the returns of debt funds has also seen long term gilt funds getting the highest beating among all categories. Even within this category there were some which were impacted most while some had a lesser impact. In such situations, for a layman investor, selecting a debt fund becomes a difficult task considering the lack of knowledge on the market itself.

A measure like Modified Duration, when used with other parameters, helps in analyzing the impact of interest rates on debt mutual funds schemes. This tool is mentioned in the factsheet across debt schemes and by understanding it one can simplify the task of selecting debt funds for their requirement.

Let see what it is and how does it help investors in creating a sound debt portfolio-

What is Duration?

To understand modified duration we need to understand Duration first. Generally, bond prices moves inversely to the interest rates i.e. if interest rates moves down, the prices goes up and if rates move up they go down. Thus, bond prices are very sensitive to any movement in the interest rates. To know the amount of sensitivity Duration is used. This is measured in years and is named as Macaulay Duration. In simple words, Macaulay Duration of the bond tells you how long it will take the price of the bond to repay the internal cash flows. This concept is used only for the bonds where there are fixed cash flows.

What is Modified Duration?

A Modified Duration is an extended version of Macaulay Duration. It is also measured in years and tells you the sensitivity of the fixed income security with 1% change in interest rates. It is calculated by the below formula
% Change in Value of Security= Modified Duration*1% change in interest rates

So if modified duration is 10 yrs and the interest rate moves up by 1% then the price of the security will move down by approx. 10%. Similarly if the interest rate moves down by 1% the price of the security will move up by approx. 10%. Thus, modified duration will give estimates of sensitivity of the bond or a portfolio towards every 1% movement in interest rates.

What you can Analyze?

When the sensitivity of any bond/fund is analyzed using duration, it tells you the risk associated with it. A modified duration goes a bit deeper and will tell you the % change in the fund movement with every 1% change in the interest rates. So a fund with high duration will be more sensitive to the interest rate movement then a lower duration fund. For investors, by comparing the different debt mutual funds scheme within a category, they can analyze which has more interest rate risk. There are also categories like dynamic bond funds where there are frequent changes in the portfolio. These funds rely more on fund manager skills. The modified duration analysis can also indicate how the fund manager is taking a view on the movement of interest rates. But no investment decision should rest on this analysis alone.

Thus, by using this measure investors can analyze and compare different debt mutual funds scheme to see which matches their objective of the investment. If one is looking to invest for a shorter period, taking a higher risk will not be in the list of parameters and so low duration funds will find a place in the portfolio. On other hand if one has a higher risk appetite and a longer investment horizon, the preference for taking an extra risk for higher returns will be there which can be met by including higher duration fund in the portfolio.

But do remember that this is not the only factor which can impact a portfolio of a debt scheme. Credit quality of the securities and other factors are there which are equally important and so should be given equal weightage when you are comparing schemes to create a debt portfolio.

- Jitendra P.S.Solanki
The author is the CFP & Founder of JS Financial Advisors

20.08 | 0 komentar | Read More

ACC Q1 net PAT seen down 34% at Rs 276cr: Kotak Securities

Jul 24, 2013, 06.09 PM IST

Kotak Securities expects ACC to report a 36.8 percent degrowth quarter-on-quarter (degrowth of 33.8 percent year-on-year) in net profit at Rs 276.6 crore.

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ACC Q1 net PAT seen down 34% at Rs 276cr: Kotak Securities

Kotak Securities expects ACC to report a 36.8 percent degrowth quarter-on-quarter (degrowth of 33.8 percent year-on-year) in net profit at Rs 276.6 crore.

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ACC Q1 net PAT seen down 34% at Rs 276cr: Kotak Securities

Kotak Securities expects ACC to report a 36.8 percent degrowth quarter-on-quarter (degrowth of 33.8 percent year-on-year) in net profit at Rs 276.6 crore.

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Kotak Securities has come out with its first quarter (April-June) earnings estimates for the cement sector. The brokerage house expects ACC to report a 36.8 percent degrowth quarter-on-quarter (degrowth of 33.8 percent year-on-year) in net profit at Rs 276.6 crore.

Revenues are expected to decrease by 5.8 percent Q-o-Q (down 1.2 percent Y-o-Y) to Rs 2743.5 crore, according to Kotak Securities.

EBITDA margin or operating profit margin is likely to be at 16.8 percent in June quarter as against 15.3 percent in March quarter and 23.4 percent in a year ago period.

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GAIL India Q1 net may dip 1% at Rs 1119 cr: KR Choksey

Jul 24, 2013, 06.11 PM IST

KR Choksey expects GAIL India to report a 81 percent growth quarter-on-quarter (degrowth of 1 percent year-on-year) in net profit at Rs 1,119 crore.

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GAIL India Q1 net may dip 1% at Rs 1119 cr: KR Choksey

KR Choksey expects GAIL India to report a 81 percent growth quarter-on-quarter (degrowth of 1 percent year-on-year) in net profit at Rs 1,119 crore.

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GAIL India Q1 net may dip 1% at Rs 1119 cr: KR Choksey

KR Choksey expects GAIL India to report a 81 percent growth quarter-on-quarter (degrowth of 1 percent year-on-year) in net profit at Rs 1,119 crore.

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KR Choksey has come out with its first quarter (April-June) earnings estimates for the oil and gas sector. The brokerage house expects GAIL India to report a 81 percent growth quarter-on-quarter (degrowth of 1 percent year-on-year) in net profit at Rs 1,119 crore.

Revenues are expected to decrease by 6 percent Q-o-Q (up 5 percent Y-o-Y) to Rs 11605 crore, according to KR Choksey.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 55 percent Q-o-Q (down 3 percent Y-o-Y) to Rs 1860 crore.

KR Choksey report on GAIL India

Share of subsidy is expected to be around Rs 700 crore and improvement in petrochemical prices will lead topline growth.

Gas transmission will be 100-103mmscmd but petrochemical deltas are improved on Q-o-Q basis.

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