  | | October 26 , 2012 | | | | | | | Weekly Facts | | | Close | Change | %Change | | BSE Sensex* | 18,625.34 | (57.0) | -0.30% | | Re/US$ | 53.58 | (0.7) | -1.30% | | Gold Rs/10g | 30,765.00 | (35.0) | -0.11% | | Crude ($/barrel) | 108.63 | (7.2) | -6.19% | | FD Rates (1-Yr) | 7.50% - 8.50% | Weekly change as on October 25, 2012
*BSE Sensex as on October 26, 2012 | |
Impact 
In order to tackle the menace of large sum of money being collected from the general public without requisite regulatory approvals and for dubious investment projects, the capital market regulator – the Securities and Exchange Board of India (SEBI) has asked the Government to frame a strong central legislation, stating that the existing legal provisions are weak and allow companies to benefit from loopholes in the regulatory framework.
The market regulator seems to have cited that there have been some cases which are beyond its jurisdiction, where all kinds of excuses and arguments are provided if they are interrogated. "People make all sorts of excuses - in some cases they claim they are under the State Government, some cases they are saying they are registered with the Ministry of Corporate Affairs, some cases they are saying they are Housing Companies and in some cases they claim to be NBFCs", said SEBI Chairman Mr. U.K. Sinha.
Although such loopholes do exist, according to SEBI Chairman, wherever they suspect and have information along with evidence(s); action is taken against them. "The legal provision is relatively weak on this front and I agree that there is need for one strong central legislation because big amount of money is being collected from the citizens of the country", said Mr. U.K. Sinha.
We are of the view that, indeed legislation in our country needs to made robust and although jurisdictions and separate regulators may exist, as a capital market regulator SEBI should be conferred with the absolute powers to interrogate and take to task cases, thereby enabling a thorough check on public money collection. For investor, it is imperative to be responsible while taking an investment decision and not fall for dubious claims, which eventually may give them a feeling of being betrayed.
|
Impact
Since a couple of years now the Indian equity markets have been under a blanket of nervous sentiments, as the gloomy clouds of debt overhang situation in the Euro zone are sending shivers to the Indian economy, along with domestic political scenario turning turbulent with scam stories unveiling.
But amid these uncertain times which have led to a corrective phase of the Indian equity markets, the consumption story in India seems alive and kicking. Many of you may be aware that India ranks second in world in terms of population, and is one of world's youngest nations. Moreover, with rise in disposable income and job opportunities, the middle class population in India has grown steadily. And it is this burgeoning middle class population (of a young brigade) who in their endeavour to live a better or a ritzy lifestyle have aided to propel the consumption theme.
Base: Rs 10,000
Data as on October 23, 2012
(Source: ACE MF, PersonalFN Research)
Thus with consumer behaviour undergone changes post liberalisation; companies that are directly or indirectly linked to the discretionary consumer spending have been in vogue. As revealed by the chart above, companies within the ambit of consumption theme (as reflected in the CNX Consumption index) are depicting a far greater strength although the broader markets have faltered in the last couple of years.
We believe that the consumption theme indeed has supported the economic growth rate clocked by India, although it has lowered at present. Moreover with range of domestic and goods are foreign luxury brands available, accentuates the fact the consumption story has a promising potential. Few mutual fund houses too have funds focusing on this theme, and they have provided appealing returns as well; but let apprise you that betting on a single theme entail very high risk as well. So given that, a thematic investment could suit only those have a very high risk appetite. Investors, who do not have the appetite for very high risk, could count on opportunities exiting across sectors and market capitalisations, which thus can enable them to diversify their portfolio well.
|
Impact
India, as many of you may be aware is the world's largest consumer of gold. With it being perceived as a traditional asset class, the demand for the precious yellow metal is insatiable. Probably capturing on this verity and with festive season round the corner, brokers along with companies in the bullion segment are busy encouraging investors to invest in gold through their online platform.
Recently, Finkurve Bullion Private Ltd. (which is jointly promoted by NCDEX Spot Exchange Ltd., RiddiSiddhi Bullions Ltd. and Finkurve Financial Services Ltd.) introduced its online trading platform – "Bullion India", allowing investors to own small denominations of physical gold and silver at wholesale prices with the option of free storage or door step deliveries (at a nominal cost). To know more about Bullion India and the smart way of investing in gold, please click here.
|
Impact
In the recent past, while the Insurance Regulatory and Development Authority of India (IRDA) has adopted strict vigil to regulate the insurance industry, their seem to be some lacuna left unattended to, which is enabling insurance companies to derive some abnormal benefits.
After cracking the whip on the Unit Linked Insurance Plans (ULIPs) for the charges they earlier levied, insurers are now busy promoting traditional insurance policies, as their isn't any cap on charges / expenses of such policies. To know our view on this, please click here.
|
FREE Checkup of your Financial Health
Know if Your Finances Really Need a Doctor?
Click here to take your Instant Financial Health Checkup - FREE!
| |
- According to the data compiled by the Association of Mutual Funds in India (AMFI), tax saving funds (also known as equity linked saving funds) as category have witnessed a net outflow amounting to Rs 934 crore in the half year ended September 30, 2012.
We are of the view that such a net outflow in tax saving funds has occurred due to lackluster performance by most schemes in the last 3 years. Over a 3-yr time frame, the category average return is 5.83% thereby it being far lower than that provided by Public Provident Fund (PPF), which is considered a safer tax investment by most investors.
Having said that, there are some which have delivered double digit returns as well, and thus for you to discover the path to wealth creation vide tax saving mutual funds, it is imperative to select your mutual funds prudently.
- Inspired by "Zutto Motto" service (which means fforever more service), Reliance Life Insurance Company (RLIC) introduced a structured post-sales customer service drive taking a leaf out of its Japanese partner, Nippon Life's book. RLIC has begun this drive under its 'Reliance Life Plus Club' initiative, whereby policyholders of RLIC will be provided services beyond premium collection.
We are of the view that if this drive indeed takes the right course, we see service being enhanced from RLIC. It is noteworthy that post-sales customer service drive involves a continued relationship between the company and its customers through maintenance and advice-like offerings for years after the actual sale. Such post-sales service is a widely prevalent practice in a host of consumer-focused businesses, including consumer goods and home appliances. If RLIC is successful in replicating the model which their Japanese partner follows, policyholders may feel delighted and satisfied.
|
Bullion: Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins.
Source: Investopedia
|
Quote : "Wealth consists not in having great possessions, but in having few wants." - Epictetus
|
| |