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Monday, January 31, 2011

2010 Gains Lost In 2011


Here is the chart which shows the amount of losses that some sectoral indices have seen in 2011, which have erased the gains made in the whole of 2010. 

The worst performer has been the BSE-Oil & Gas sector, which has lost 9.5 times the gains it had made in 2010. Then comes the BSE-Metals index that has lost 7.7 times the 2010 gains. The BSE-Sensex has lost 0.69 or 69% of its 2010 gains in just the first month of this year. And as we see now, the weakness for Indian stocks is not likely to go off anytime soon.

For many this is time to buy & for few to sell. In my opinion every time is right for regular investors. But, the thumb rule will always remain on basis of Risk Profiling, Financial Planning, Asset Allocation, Goal Based Investments, Diversification etc..

Saturday, January 22, 2011

Time For Your Tax Planning

This is the last quarter of the current financial year and it's time for you to review your tax planning. You need to make the necessary investments to save on income tax. The income tax rules provide various sections under which you can claim various expenses and save tax.

Planning for the salaried segment 


The employers estimate tax liability, deduct tax from salary and deposit it with the tax department. Although it is possible to claim further tax deductions at the time of filing IT returns, you can also submit the relevant bills to your employer for necessary adjustments in the tax deducted at source (TDS) itself .

Usually, employers have some cut-off date specified to furnish various investments and expenses, to factor them into their tax computations . It is advisable to submit the relevant proofs in order to reduce the TDS itself instead of claiming tax refunds.


These are some property related deductions allowed: 

House rent allowance

To claim the house rent allowance (HRA) deduction, it is required to submit recent rent receipts, rental agreement copy etc.

The eligible deduction is the least of these three components :  

Actual HRA received 50 percent or 40 percent (metro or other location) of basic salary plus DA Actual rent paid minus 10 percent of basic salary plus DA.

Home Loan

A statement or letter from the bank is required to claim the income tax deductions related to home loan interest and principal payments.

For self-employed taxpayers

Independent consultants, businessmen, professionals etc come under the self-employed category.

They can claim all their work-related expenses as deductions including office rent, home office rent etc. Self-employed people can also claim depreciation on their work-related assets.

However, they should maintain all relevant bills to support their claims. In addition to these claims, self-employed taxpayers are eligible for the general deductions that are applicable to others too.

Advance tax

You need to pay advance income tax if necessary in order to avoid penalty.

For salaried taxpayers, the tax computations and TDS filings are made by the employer. It is a taxpayer's responsibility to inform his employer in case he has any other income in addition to the salary in order to adjust the tax deductions and filings.

Income such as 'Income from House Property' should be furnished to the employer.

Self-employed taxpayers should prepare their advance tax assessments and pay tax in time to avoid penalty. According to the income tax laws, every individual should pay tax in advance if the liability is more than Rs 5,000.

Quick bytes

Plan and make necessary investments to save on income tax.

For salaried taxpayers, the tax computations and TDS filing are made by the employer. 


Make sure you inform your employer if you have other sources of income, to adjust the tax deductions.  

 


Friday, January 21, 2011

IDFC MF Declares Dividend For Imperial Equity Fund

Record date for dividend is 25 January 2011 

IDFC Mutual Fund has announced the declaration of dividend under dividend option of IDFC Imperial Equity Fund. The record date for dividend has been fixed as 25 January 2011. 

The quantum of dividend will be Rs 2.00 per unit, subject to availability of distributable surplus. The scheme recorded NAV of Rs 16.1606 per unit for Plan A and Rs 15.5497 per unit for Plan B as on 18 January 2011. 

The investment objective of the scheme is to seek to generate capital appreciation and/or provide income distribution from a portfolio of predominantly equity and equity related instruments.

Monday, January 17, 2011

HDFC MF to Introduce SIP Top-Up Facility under Systematic Investment Plan

With effect from 20 January 2011 

HDFC Mutual Fund has decided to introduce SIP Top-up facility under Systematic Investment Plan (SIP) investments for the benefit of the unitholders. This facility will be available with effect from 20 January 2011. 

The terms and conditions of SIP Top-up facility are as follows: 

SIP Top-up is a facility wherein an investor who has enrolled for SIP, has an option to increase the amount of the SIP installment by a fixed amount at pre-defined intervals. This will enhance the flexibility of the investor to invest higher amounts during the tenure of the SIP. 

All schemes offering SIP facility shall be eligible to offer SIP Top-up facility. 

SIP Top-up facility shall be available for SIP investments through ECS (Debit Clearing) / Direct Debit Facility / Standing Instruction only. 

The Top-up amount should be in multiples of Rs 500 only. 

Monthly SIP offers Top-up frequency at half yearly and yearly intervals. 

Quarterly SIP offers Top-up frequency at yearly intervals only. 

 In case the Top-up frequency is not indicated under Monthly SIP, it will be considered as yearly intervals.

Religare MF declares dividend under Religare Tax Plan

Record date for dividend is 20 January 2011 

Religare Mutual Fund has announced declaration of dividend under the dividend option of Religare Tax Plan. The record date is set as 20 January 2011. The fund house has decided to distribute Rs 2 per unit as dividend on the face value of Rs 10 per unit. 

The scheme recorded NAV of Rs 14.56 per unit as on 13 January 2011. 

Religare Tax Plan is an open ended equity linked savings scheme. The investment objective is to generate long term capital growth from a diversified portfolio of pre dominantly equity and equity related securities.

Principal, PNB & Vijaya Bank restructures Joint Ventures

Principal Financial Group (Mauritius) Ltd. (Principal) today announced the restructuring of its joint ventures with Punjab National Bank and Vijaya Bank, in India. 

Principal has sold its entire stake (26%) in both the Pnb Principal Insurance Broking Pvt. Ltd. and Principal Pnb Life Insurance Company Ltd. to PNB. On the other hand, Principal has acquired the entire shareholding of PNB (30%) and Vijaya bank (5%) in the Pnb Principal Financial Planners Pvt. Ltd. 

On the eve of signing the agreements, Mr Rajan Ghotgalkar, Country Head & MD, Principal India statedthat, "The transactions for transfer of shares and restructure of the Joint Ventures, initiated in June last year, stood concluded on January 12, 2011."

Also as per the restructure terms, parties (Principal, Punjab National Bank and Vijaya Bank) continue to remain the shareholders, (with no change in the shareholding pattern) - in Principal Pnb Asset Management Company Pvt. Ltd. and Principal Trustee Company. 

Further both the Partner Banks, PNB and VB, stay committed to distribute the products of AMC.

Canara Robeco MF Declares Dividend For Equity Tax Saver Fund

Record date for dividend is 21 January 2011 

Canara Robeco Mutual Fund has announced the declaration of dividend under dividend option of Canara Robeco Equity Tax Saver Fund. The record date for dividend has been fixed as 21 January 2011. 

The quantum of dividend will be Rs 2.00 per unit as on the record date. The NAV of the scheme was at Rs 21.32 per unit as on 14 January 2011. 

Canara Robeco Equity Tax Saver Fund is an open ended equity linked tax saving scheme with lock-in period of 3 years. The investment objective of the scheme is to provide long term capital appreciation by predominantly investing in equities and to facilitate the subscribers to seek tax benefits as provided under section 80 C of the Income Tax Act, 1961.

Franklin Templeton MF Declares Dividend For Franklin India Bluechip Fund

Record date for dividend is 21 January 2011 

Franklin Templeton Mutual Fund has announced 21 January 2011 as the record date for declaration of dividend on the face value of Rs 10 per unit under Franklin India Bluechip Fund. 

The quantum of dividend will be Rs 4.50 per unit as on the record date. The scheme recorded NAV of Rs 42.8778 per unit as on 14 January 2011. 

Franklin India Bluechip Fund is an open end growth scheme with an investment objective is to provide medium to long-term capital appreciation.

Franklin Templeton Launches Fixed Tenure Fund - Series XV (3 Year Plan)

NFO Period 17 January to 31 January 2011 

Franklin Templeton Mutual Fund has launched Franklin Templeton Fixed Tenure Fund - Series XV (3 Year Plan), a close-ended income scheme. The tenure of the scheme is 3 years from the date of allotment and it will mature on 6 February 2014. During the New Fund Offer (NFO), the units will be offered at face value of Rs 10 per unit. The new issue is open for subscription from 17 January and closes on 31 January 2011. 

The investment objective of the scheme is to generate returns and reduce interest rate volatility, through a portfolio of fixed income securities that are maturing on or before the maturity of the scheme along with capital appreciation through equity exposure. 

The scheme offers two plans i.e. growth and dividend plan. Dividend option offers payout facility only. 

The minimum investment amount is Rs 10000 or any amount in multiple of Rs 10 thereafter.
The fund seeks to collect a minimum subscription amount of Rs 1 crore under the scheme during the NFO period. 

Entry and exit load charges shall be nil for the scheme. 

Debt portion of the scheme will be managed by Mr. Umesh Sharma and Mr. Pallab Roy. 

Equity portion of the scheme will be managed by Mr. Anand Radhakrishnan and Ms. Roshi Jain (dedicated for investment in foreign securities). 

The scheme will allocate up to 20% of assets in equities and equity linked instruments. It would further invest 80% to 100% of assets in debt securities and money market instruments. 

The Benchmark index for the scheme is - 20% S&P CNX 500 + 70% Crisil Composite Bond Fund Index + 10% Crisil Liquid Fund Index.

Daiwa Launches Its Asset Management Business in India

Shinsei AMC is renamed as Daiwa AMC post completion of buyout 

Daiwa Asset Management Co. Ltd. ('DAM'), the asset management arm of the Japan-based Daiwa Securities Group, has launched its business in India. DAM manages over 300 funds investing in various asset classes with assets under management of over USD 115 Billion as of 30 September 2010. 

Mr. Toshiro Ishibashi, President, DAM, said, "The launch of the Daiwa Asset Management in India is consistent with our stated strategy of investing primarily in Asia and the faster growing emerging markets. This investment in India is of strategic importance to the Daiwa Securities Group as it gives us a foothold in potentially, one of the largest retail asset management markets in the world."

Mr. Piyush Surana, CEO, Daiwa Asset Management (India) Pvt. Ltd., said, "Daiwa has a strong brand recall in the international arena and the Daiwa Securities Group comes with more than 100 years of history. The asset management industry in India is going through an evolutionary phase and the experience and credibility which Daiwa brings to the table are significant pluses for us."

Mr. Takashi Yamaguchi, who is DAM's official representative in India who has also been nominated as the Joint CEO for the Indian business, added, "This venture fits well with our global and emerging markets-led strategy. We are happy to be here and are sure that we will be received well by the investor community."

In March 2010, the Daiwa Securities Group had announced a buy-out of Shinsei Asset Management (India) Pvt Ltd. Post the completion of this acquisition in December 2010, the company has been renamed Daiwa Asset Management (India) Pvt. Ltd. 

Consequent to the above acquisition, the other associated entities, Shinsei Trustee Company (India) Private Limited and Shinsei Mutual Fund along with three existing schemes have all been re-named as Daiwa entities.

Updating policyholders about change in network hospitals & TPAs.

CIRCULAR NO. IRDA/TPA/GDL/CIR/008/01/2011, DATED 12-1-2011 

1. It has come to the notice of the Authority that in some instances policyholders could not get cashless facility at the hospital approached, due to change in the network hospitals and/ or the servicing TPA by the insurers, about which the policyholder was not properly informed. 

2. Where the policyholder had renewed the policy well before the expiry of earlier policy, the IT system of the insurer could not update the details of the new TPA in the policy since it was renewed before the date of change of TPA. The inception of the renewed policy was to take effect after the date when the TPA servicing the particular office of the insurer was to change. 

3. Since both the network hospitals, as well as the servicing TPA, were changed and the system could not update the details of the same in the policy, the policyholders were put to great inconvenience. 

4. All insurers are hereby advised that they should ensure that their systems update the details with respect to network hospitals and the servicing TPAs at the time of issue of policy or any time thereafter during the period the policy is in force. Alternatively, the decisions on change of list of PPN hospitals and/ or TPAs shall be with prospective effect giving adequate time for the IT systems to have the necessary modifications in software in place. All the policyholders must be informed appropriately about the service providers at all times.

Thursday, January 06, 2011

Crude manages to climb up

Crude rises as crude inventory drops more than expected 

Crude prices managed to pare initial weakness and end higher on Wednesday, 05 January 2011 at Nymex. Prices rose as energy department reported a drop in crude and crude stockpiles for last week. Strong economic data also pulled up prices. 

On Wednesday, crude oil futures for light sweet crude for January delivery closed higher by $0.92 (1%) at $90.3/barrel. 

Crude ended December higher by 8.6%. Crude ended the fourth quarter of FY 2010 higher by 13%. For the third quarter, crude ended higher by 5.7%. Crude had ended second quarter of CY 2010 lower by 9.3%. For the first quarter, crude rose by 5.5%. For the year of 2010, crude closed higher by 15%. 

In the latest weekly inventory report, the EIA reported today a decline of 4.2 million barrels in the nation's crude-oil inventories for the week ended 31 December. Market had expected inventories to drop, but by just 2.2 million barrels. Gasoline inventories rose by 3.3 million barrels on the week, contrasting with expectations for a 600,000-barrel increase. Stocks of distillates, which include heating oil and diesel, rose 1.1 million barrels. Market had estimated an increase of 500,000 barrels. 

In the currency market on Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 1%. 

The Institute for Supply Management reported on Wednesday, 05 January 2011 that its non-manufacturing index rose to 57.1% from 55.0% in November, marking the 12th month in a row the gauge has been above the 50%. 

It was the strongest reading since May 2006, and the reading shows that the services sector overtook manufacturing in December, the first time in 18 months, as retailers enjoyed a strong Christmas selling season. Real estate, rental and leasing, and information were also among the 14 industries showing growth. The business activity subcomponent jumped 6.5 points to 63.5%, and the new orders subcomponent rose 5.3% to 63%. 

Among other energy products, gasoline for February delivery gained 3 cents, or 1.3%, to settle at $2.45 a gallon. February heating oil added 4 cents, or 1.4%, to $2.54 a gallon. 

Natural gas held on to its losses, however, with the February contract down 20 cents, or 4.2%, to $4.52 per million British thermal units. 

Before FY 2010, crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex. 

At the MCX, crude oil for January closed higher by Rs 83 (2%) at Rs 4,124/barrel. Natural gas for January delivery closed at Rs 205, lower by Rs 5.6 (2.6%).

Precious metals tumble

Prices continue to fall as dollar strengthens 

Precious metals ended considerably lower once again on Wednesday, 05 January 2011 at Comex. Prices fell as the dollar witnessed considerable gains and traders took to profit taking after the holiday season. 

On Wednesday, gold for February delivery fell by $5.1 (0.4%) ending at $1,373.7 an ounce on the New York Mercantile Exchange. During intra day trading, prices fell to a low of $1,364. Yesterday, gold witnessed biggest one-day drop for gold in three weeks time. Last week, gold ended higher by 3%. 

For the month of December, gold ended higher by 2.5%. It ended the fourth quarter, higher by 8%, its ninth consecutive quarterly gain. Before this, it ended the third quarter higher by 5%. For the second quarter, gold ended up by 12%. For the first quarter of this year, gold rose by 1.7%. For the year of 2010, gold ended higher by 30%, its tenth consecutive yearly gain. 

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa. 

On Wednesday, December Comex silver futures ended lower by $31 cents (1%) at $29.2. Prices gained 3.3% last week. 

Silver prices gained almost 55% in the fourth quarter of this year. For the third quarter, silver gained nearly 18%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. In FY 2010, silver ended higher by 83.7%. 

In the currency market on Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 1%. 

The Institute for Supply Management reported on Wednesday, 05 January 2011 that its non-manufacturing index rose to 57.1% from 55.0% in November, marking the 12th month in a row the gauge has been above the 50%. 

It was the strongest reading since May 2006, and the reading shows that the services sector overtook manufacturing in December, the first time in 18 months, as retailers enjoyed a strong Christmas selling season. Real estate, rental and leasing, and information were also among the 14 industries showing growth. The business activity subcomponent jumped 6.5 points to 63.5%, and the new orders subcomponent rose 5.3% to 63%. 

In the latest report, HSBC raised its 2011 gold average price forecast to $1,450 an ounce from a previously forecast $1,425 an ounce. The bank sees gold at $1,300 an ounce in 2012, up from $1,275 an ounce earlier. HSBC raised its 2011 average price estimate for silver to $26 an ounce, from $20 an ounce. Silver in 2012 is likely to average $20 an ounce, from $17.50 an ounce. 

At the MCX, gold prices for February delivery closed higher by Rs 17 (0.08%) at Rs 20,466 per ten grams. Prices rose to a high of Rs 20,517 per 10 grams and fell to a low of Rs 20,376 per 10 grams during the day's trading. 

At the MCX, silver prices for March delivery closed Rs 210 (0.5%) lower at Rs 44,856/Kg. Prices opened at Rs 45,188/kg and fell to a low of Rs 44,070/Kg during the day's trading.

FIIs in selling mode

Outflow of Rs 92.40 crore on 5 January 2011 

Foreign institutional investors (FIIs) sold shares worth a net Rs 92.40 crore on Wednesday, 5 January 2011, as against an inflow of Rs 779.30 crore on Tuesday, 4 January 2011. 

The net outflow of Rs 92.40 crore on 5 January 2011 was a result of gross purchases Rs 3283.30 crore and gross sales Rs 3375.70 crore. There was an outflow of Rs 92.70 crore from the secondary equity markets which was a result of gross purchases Rs 3283 crore and gross sales Rs 3375.70 crore. The BSE Sensex fell 197.62 points or 0.96% to 20,301.10 on that day. 

There was an inflow of Rs 0.30 crore into the category 'primary market & others', on 5 January 2011. 

FII inflow in January 2011 totaled Rs 1731.10 crore (till 5 January 2011). FIIs had bought equities worth Rs 2049.60 crore in December 2010. FII inflow in the calendar year 2010 totaled Rs 133266 crore. In dollar terms the net equity inflow in 2010 totaled $29.36 billion, compared to an inflow of $17.45 billion in 2009. The annual inflow in 2010 was at record level.

There are a total of 1,726 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Mutual funds continue selling

Outflow of Rs 177.40 crore on 5 January 2011 

Mutual funds (MFs) sold shares worth a net Rs 177.40 crore on Wednesday, 5 January 2011, which was lower than an outflow of Rs 293.30 crore on Tuesday, 4 January 2011. 

The net outflow of Rs 177.40 crore on 5 January 2011 was a result of gross purchases Rs 555.20 crore and gross sales Rs 732.60 crore. The BSE Sensex lost 197.62 points or 0.96% to 20,301.10 on that day. 

MFs sold shares worth net Rs 560.30 crore in January 2011 (till 5 January 2011). Mutual funds had bought equities worth a net Rs 1376.90 crore in December 2010.

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Disclaimer - All investments in Mutual Funds and securities are subject to market risks and uncertainty of dividend distributions and the NAV of schemes may go up or down depending upon factors and forces affecting securities markets generally. The past performance of the schemes is not necessarily indicative of the future performance and may not necessarily provide a basis for comparison with other investments. Investors are advised to go through the respective offer documents before making any investment decisions. Prospective client(s) are advised to go through all comparable products in offer before taking any investment decisions. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the fund will be achieved. Information gathered & material used in this document is believed to be from reliable sources. Decisions based on the information provided on this newsletter/document are for your own account and risk.


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Published Credits goes to following sources & all the mentioned sources as footer below the published material- Bloomberg, Valueresearch Online, Capital Market, Navindia, Franklin Templeton, Kitco, SBI AMC, LIC AMC, JM Financial AMC, HDFC AMC, The Hindu, Business Line, Personal FN, Economic Times, Reuters, Outlook Money, Business Standard, Times of India etc.