Lessons from Charlie Munger-X - Views on News from Equitymaster
Tuesday, January 10, 2012
NRIs will get right to vote; pension fund for overseas workers
Manmohan wants them to contribute "much more" to building a modern
India
Prime Minister Manmohan Singh on Sunday called upon the Indian
communities living abroad to play a more active role and contribute
“much more” to the building of a modern India and promised significant
steps to facilitate, encourage and promote their engagement with the
country of their origin.
Inaugurating the 10th Pravasi Bharatiya Divas here, Dr. Singh also
announced the right of franchise to the non-resident Indians who are
registered under the Representation of the People Act, 1950. A new
pension and life insurance fund for overseas Indian workers, to enable
them to voluntarily save for their return and resettlement, has also
been introduced.
Trinidad and Tobago Prime Minister Kamla Persad-Bissessar is the chief
guest at the three-day festival, which began on Saturday. About 1,900
NRIs and Persons of Indian Origin (POIs) are taking part in the flagship
event, which will focus on India's success in diverse fields and
invited them to strengthen their bonds with their ancestral land.
The formal inauguration of the annual event at B.M. Birla Auditorium
here on Sunday, a day after brainstorming seminars were organised on a
variety of subjects, was attended by a battery of distinguished persons,
industrial magnates, young entrepreneurs and government functionaries.
Among others, Union Minister for Overseas Indian Affairs Vayalar Ravi,
acting Rajasthan Governor Shivraj Patil and Chief Minister Ashok Gehlot
attended the inaugural session. Union Finance Minister Pranab Mukherjee,
Union Road Transport and Highways Minister C.P. Joshi and Lok Sabha MP
Shashi Tharoor addressed the subsequent sessions.
Dr. Singh said that while the notifications had been issued to enable
Indian residents abroad to participate in the country's election
processes, a Bill had been introduced in Parliament to merge and
streamline the PIO and Overseas Citizen of India schemes by amending the
Citizenship Act. This would provide for an overseas Indian card that
would be given to foreign spouses of the holders as well.
The new pension and life insurance scheme, fulfilling a long-pending
demand, would enable the overseas Indians to save for their old age
after returning to the country, said the Prime Minister. It would also
provide a low-cost life insurance cover against natural death.
Listing the steps taken for safety and security of the Indians living
abroad, particularly in the regions of instability, Dr. Singh said the
government was “acutely conscious” of the security needs of over six
million Indians staying in the Gulf and West Asia. “We have conveyed to
[these] countries that we have a stake in the peace and stability of
this region. We expect that they would appropriately look after the
interest of Indian communities.”
He said the Ministry of Overseas Indian Affairs had prepared an action
plan to implement the recommendations of an inter-ministerial committee
on issues relating to repatriation, relief and rehabilitation of Indian
nationals affected by the recent developments in the West Asian region.
IDBI Bank hikes interest rates on NRE deposits to 9.5% p. a.
-- IDBI Bank has revised
Interest rates on NRE deposits to 9.5% p.a. for deposits with maturity
ranging from 1 year 1 day to 10 years. The Interest rates on deposits
for maturity period of 1 year will be 9.25% p.a. This rate will be
applicable on fresh NRE deposits & renewal of maturing deposits. The
interest rates will stand revised from December 28, 2011.
The revised interest rates are as follows -
Maturity Slab Interest Rate [% p.a.]
1 year 9.25 %
1year 1 Day - years 9.50 %
Notes to Editor
About IDBI Bank:
IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank has essayed a key nation-building role, first as the apex Development Financial Institution (DFI) (July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service commercial Bank (October 1, 2004 onwards)
The revised interest rates are as follows -
Maturity Slab Interest Rate [% p.a.]
1 year 9.25 %
1year 1 Day - years 9.50 %
Notes to Editor
About IDBI Bank:
IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank has essayed a key nation-building role, first as the apex Development Financial Institution (DFI) (July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service commercial Bank (October 1, 2004 onwards)
Tuesday, January 3, 2012
Saturday, November 5, 2011
Monday, August 16, 2010
Is Baroda Sector Focus Fund a diversified scheme?
Despite its moniker, the fund may do better by switching between sectors. But that makes it an equity diversified fund
Baroda Pioneer Mutual Fund has filed its draft offer document with the Securities and Exchange Board of India (SEBI) to launch an open-ended 'Baroda Pioneer Sector Focus Fund'. The scheme will be benchmarked against the S&P CNX Nifty.
The fund will have exposure to six sectors with 25% of net assets to each sector at any given point of time depending upon their growth prospects and valuation. The scheme has provided an indicative list of 15 sectors which it may invest in.
These sectors include automobiles, cement & cement products, construction, consumer goods, energy, financial services, industrial manufacturing, industrial capital goods, information technology, media & entertainment, metals, pharma, services, textiles and telecom. Baroda Mutual Fund manages a corpus of Rs3,954 crore as on July 2010 and has 15 schemes in its basket.
Is it worth investing in this fund? Unfortunately, sector funds are not a good idea. They are launched when a particular sector is doing well, which is when prices have already run up. The subsequent stock price performance is usually lacklustre. We analysed the performance of 49 equity sector funds. Over a one-year period, 40 funds have outperformed their respective benchmarks while only 9 have lagged behind.
However, over a three-year period, only 23 funds outperformed their benchmarks while 26 funds failed to outperform their respective benchmarks. The Baroda Pioneer Sector Focus Fund may do better than others because it will able to switch between six sectors. But then, that makes it a diversified equity growth fund!
Baroda Pioneer Mutual Fund has filed its draft offer document with the Securities and Exchange Board of India (SEBI) to launch an open-ended 'Baroda Pioneer Sector Focus Fund'. The scheme will be benchmarked against the S&P CNX Nifty.
The fund will have exposure to six sectors with 25% of net assets to each sector at any given point of time depending upon their growth prospects and valuation. The scheme has provided an indicative list of 15 sectors which it may invest in.
These sectors include automobiles, cement & cement products, construction, consumer goods, energy, financial services, industrial manufacturing, industrial capital goods, information technology, media & entertainment, metals, pharma, services, textiles and telecom. Baroda Mutual Fund manages a corpus of Rs3,954 crore as on July 2010 and has 15 schemes in its basket.
Is it worth investing in this fund? Unfortunately, sector funds are not a good idea. They are launched when a particular sector is doing well, which is when prices have already run up. The subsequent stock price performance is usually lacklustre. We analysed the performance of 49 equity sector funds. Over a one-year period, 40 funds have outperformed their respective benchmarks while only 9 have lagged behind.
However, over a three-year period, only 23 funds outperformed their benchmarks while 26 funds failed to outperform their respective benchmarks. The Baroda Pioneer Sector Focus Fund may do better than others because it will able to switch between six sectors. But then, that makes it a diversified equity growth fund!
Tuesday, August 10, 2010
Equity funds witness outflows of Rs 3,400 cr in July
Equity schemes witnessed net outflows of Rs 3,400 crore in July, highest in the last 12 months. With distributors shying away from selling mutual funds and retail investors redeeming in the rising equity markets, it has become difficult for the asset management companies (AMC) to attract new investors.
Sundeep Sikka, CEO of Reliance Mutual Fund says, "Historically, surging markets have led to redemptions. And today investors are wary of making lump-sum investments." In the month of July, equity markets were up by 2%. While the equity schemes witnessed net redemption's in the month of July, the mutual fund industry on an overall basis witnessed inflows of over Rs 31,600 with most money flowing into money market schemes.
According to the data provided by the Association if Mutual Funds in India (Amfi), income schemes saw net inflows of Rs 475 crore while it was Rs 34,300 for money market schemes. For the same period, balanced and ELSS schemes saw outflows of Rs 43 and 139 crore, respectively. Among other category of funds, exchange traded funds including gold and other witnessed inflows of Rs 530 crore while fund of funds investing overseas saw redemption of Rs 112 crore.
Ever since the market regulator scrapped entry load in August last year, equity schemes has seen net redemption's of over Rs 11,500 crore. Money has flowed into equity schemes in only three out of twelve months.
Sikka adds that it is encouraging to find that SIP (Systematic Investment Plan) investments are continuing even in this volatile market. In July, average assets under management of the fund industry stood at over Rs 6.65 lakh crore down by 1.52% against Rs 6.75 lakh crore in June.
Change in mutual fund fee structure
Securities and Exchange Board of India (Sebi) has asked mutual fund houses to provide investors an exit option before increasing administrative fees in a fund of fund (FoF) scheme. Fund of fund schemes are those where a mutual fund invests in a scheme of another MF.
In a July 29 notification sebi said that the total expense charged from investors in the scheme should not exceed 0.75 % of either the daily or weekly average net assets.
Sundeep Sikka, CEO of Reliance Mutual Fund says, "Historically, surging markets have led to redemptions. And today investors are wary of making lump-sum investments." In the month of July, equity markets were up by 2%. While the equity schemes witnessed net redemption's in the month of July, the mutual fund industry on an overall basis witnessed inflows of over Rs 31,600 with most money flowing into money market schemes.
According to the data provided by the Association if Mutual Funds in India (Amfi), income schemes saw net inflows of Rs 475 crore while it was Rs 34,300 for money market schemes. For the same period, balanced and ELSS schemes saw outflows of Rs 43 and 139 crore, respectively. Among other category of funds, exchange traded funds including gold and other witnessed inflows of Rs 530 crore while fund of funds investing overseas saw redemption of Rs 112 crore.
Ever since the market regulator scrapped entry load in August last year, equity schemes has seen net redemption's of over Rs 11,500 crore. Money has flowed into equity schemes in only three out of twelve months.
Sikka adds that it is encouraging to find that SIP (Systematic Investment Plan) investments are continuing even in this volatile market. In July, average assets under management of the fund industry stood at over Rs 6.65 lakh crore down by 1.52% against Rs 6.75 lakh crore in June.
Change in mutual fund fee structure
Securities and Exchange Board of India (Sebi) has asked mutual fund houses to provide investors an exit option before increasing administrative fees in a fund of fund (FoF) scheme. Fund of fund schemes are those where a mutual fund invests in a scheme of another MF.
In a July 29 notification sebi said that the total expense charged from investors in the scheme should not exceed 0.75 % of either the daily or weekly average net assets.
Outstanding investments in India notch up Rs 100 lakh crore milestone
Outstanding investments in India crossed the Rs 100 lakh crore mark in the March 2010 quarter.
CMIE's CapEx database reveals that Indian corporates continue to announce fresh projects, even after commissioning huge capacities in the last few years. Projects worth Rs 6.5 lakh crore are scheduled for commissioning in 2010-11. This figure stood at Rs 2.3 lakh crore in 2007-08, Rs 2.9 lakh crore in 2008-09, and Rs 4 lakh crore in 2009-10.
The current investment boom is not triggered by any big push from the government. The chief growth driver is increasing demand, impelled by a sharp rise in corporate wages, salaries of government employees, and income of the farming community. The continuous flow of fresh investment announcements reflects the confidence of Corporate India that this growth in demand is sustainable.
The corporates are unlikely to face any problems in funding these projects, because there has been a handsome growth in domestic savings in the last eight years. Gross domestic savings as a proportion of GDP went up steadily from 23.5 per cent in 2001-02 to 36.4 per cent in 2007-08.
The Indian economy is expected to return to its nine per cent growth trajectory after a two-year blip. We expect the real GDP to grow by 9.2 per cent in 2010-11, as compared to an estimated 7.1 per cent in 2009-10. All three broad sectors of the economy are projected to do well. The industrial sector is projected to grow by 9.6 per cent, services by 9.8 per cent, and the agriculture and allied sector by 5.8 per cent.
For fiscal 2010-11, inflation as measured by the wholesale price index (WPI) is projected at six per cent, as compared to the 3.6 per cent estimated for fiscal 2009-10.
CMIE's CapEx database reveals that Indian corporates continue to announce fresh projects, even after commissioning huge capacities in the last few years. Projects worth Rs 6.5 lakh crore are scheduled for commissioning in 2010-11. This figure stood at Rs 2.3 lakh crore in 2007-08, Rs 2.9 lakh crore in 2008-09, and Rs 4 lakh crore in 2009-10.
The current investment boom is not triggered by any big push from the government. The chief growth driver is increasing demand, impelled by a sharp rise in corporate wages, salaries of government employees, and income of the farming community. The continuous flow of fresh investment announcements reflects the confidence of Corporate India that this growth in demand is sustainable.
The corporates are unlikely to face any problems in funding these projects, because there has been a handsome growth in domestic savings in the last eight years. Gross domestic savings as a proportion of GDP went up steadily from 23.5 per cent in 2001-02 to 36.4 per cent in 2007-08.
The Indian economy is expected to return to its nine per cent growth trajectory after a two-year blip. We expect the real GDP to grow by 9.2 per cent in 2010-11, as compared to an estimated 7.1 per cent in 2009-10. All three broad sectors of the economy are projected to do well. The industrial sector is projected to grow by 9.6 per cent, services by 9.8 per cent, and the agriculture and allied sector by 5.8 per cent.
For fiscal 2010-11, inflation as measured by the wholesale price index (WPI) is projected at six per cent, as compared to the 3.6 per cent estimated for fiscal 2009-10.
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