  | | 07th September, 2012 | | | | | | | Weekly Facts | | | Close | Change | %Change | | BSE Sensex* | 17,683.73 | 303.0 | 1.74% | | Re/US$ | 55.65 | (0.0) | -0.02% | | Gold Rs/10g | 31,700.00 | 995.0 | 3.24% | | Crude ($/barrel) | 113.84 | 0.6 | 0.51% | | FD Rates (1-Yr) | 7.25% - 9.00% | Weekly change as on September 06, 2012
*BSE Sensex as on September 07, 2012 | |
Impact 
In its efforts to retain its home loan customers and to attract potential home buyers, the country's one of the largest private sector bank - Axis Bank introduced 'happy ending home loan' for its existing home loan customers as well as new customers. Through this the bank aims to prevent its customers from shifting to rivals offering lower rates and help the bank grab market share from them. Under the 'happy ending home loan' scheme the bank promises to waive 12 Equated Monthly Instalments (EMIs), if repayments are done on time. The 'happy ending home loan' scheme would be offered at the same rates as the regular loan products and would be applicable to new customers under floating rate option.
The EMI waiver would be offered to all loans with an initial tenure of 20 years or more and those that have crossed 15 years with Axis Bank. Any customer who pays EMIs on time would be automatically eligible for the benefit. A customer taking Rs 50 lakh home loan at 11% floating rate, the EMI per lakh of loan size would be Rs 1,032. If the customer takes a 'happy ending' home loan, the EMI waiver would be worth as much as Rs 6.19 lakh.
At present, the home loan market in the country estimated at more than Rs 4 lakh crore, is the most competitive segment for lenders with banks and mortgage finance company. Axis Bank, a predominantly corporate and infrastructure focused lender, is attempting to balance its portfolio as some investors question the wisdom of its skewed portfolio. Although there are many segments in retail such as auto, personal and other loans, the attention is on home loans since the default rates are the lowest.
We believe that, while availing a home loan, you should adopt a lot of caution. Banks and housing finance companies quite often tweak some of the features of your home loan scheme which on the face of it looks quite attractive. However, not all new features are beneficial for you and hence you should not get carried away by freebies offered.
Instead you need to look at the interest rates offered by different banks or housing finance companies on various tenures of home loans. As far as choosing between home loans from different institutions is concerned, you should go with the one offering low interest rates rather than a promise to save your money 15 years hence, by waving off some of your EMIs.
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Impact 
In search for greener pastures, the Foreign Institutional Investors (FIIs) have found solace in the Indian equity markets. FIIs have been pumping in money despite knowing the fact that the Indian economy is going through a rough patch of delayed reforms, high interest rates, low business confidence, etc. One of the main factors attracting the FIIs to India is the near zero growth situation in the Euro zone and lacklustre growth in the United States, while on the other hand India providing them (FIIs) a decent growth rate despite slowdown. Hence, for the month of August 2012, the FIIs pumped in Rs 10,803.9 crore
(Source: ACE MF, PersonalFN Research)
However, the Mutual Fund flows into the Indian equity markets remained lacklustre due to negative investor sentiment and other domestic factors like high inflation, various scams unearthing, below normal monsoon season, etc. Redemption pressures too played their role of pulling out money from the Indian equity markets. Thus, for the month of August 2012 the mutual fund industry remained net sellers to the tune of Rs 1,600.2 crore.
We are of the view that, the Indian equity markets are showing susceptibility to the global economic conditions - especially the Euro zone crisis. Likewise the downbeat economic data is also depicting a bearing on the markets. And to add to the woes, the political turmoil and successive adjournment of the Parliament is worrisome situation for the market as reforms are being delayed. However, the FIIs are exuding confidence amidst this turmoil as compared to other developed economies the growth rate as well as potential from the Indian economy still appears attractive to them. But if the rating agencies like Standard & Poor's or Moody's downgrade India's sovereign credit rating, then the FIIs would revisit their outlook towards India (an emerging market).
Thus, to save the Indian economy from a double whammy, the Government should take quick action on the various policy reforms which are stuck up due to the deadlock between the Government in power and the Opposition. Ministries should behave in a more mature way and think about the country as a whole first, rather than their vested interests.
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Impact
The Indian economy has been reeling under pressure, as global economic environment has been downbeat and domestic factors too aren't in good health. Factors such as a high interest rate scenario, widening current account deficit, high fiscal deficit, unpredictable tax policies and sticky inflation are all showing a bearing on the Indian economy; and to worsen the situation there's political turmoil as well.
A combination of all these global as well as domestic factors have pulled the country's economic growth down from the 8% - 9% range to now 5.5% for the first quarter of 2012-13. Moreover, the Indian rupee is depicting signs of weakness, which is disturbing policy makers and several industries. Just recently, the Government addressed to this weakness in the Indian rupee by deferring GAAR by three years, as it expected that with this move it could hit two birds in one shot, i.e. make the investment climate conducive as well as attract foreign flows, which in turn could aid in containing the weakness for the Indian rupee. To know more about the Finance Ministry's move to attract foreign capital please click here.
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Impact
It is imperative for you to invest your hard earned money in the right investment avenues suiting your risk profile, in order to reap the sweet fruit of your investment. Moreover, once you've invested your hard earned money prudently, the story isn't not over, but in fact it has just begun. This is because soon after you've invested, you need to rightly nurture and review your investments, thereby ensuring that your money indeed grows or your wealth is multiplied over the long run. It is crucial to know how the funds are managed in a particular investment avenue.
When the Rajiv Gandhi Equity Savings Scheme (RGESS) was announced by the finance ministry, initially it was unclear as to which stocks one could buy to avail of tax benefit and whether mutual funds too will be covered under RGESS. So, ambiguity did prevail and thus investors and mutual fund industry were left speculating. To know more about the clarity under the RGESS please click here.
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Floating interest rate: An interest rate that is allowed to move up and down with the rest of the market or along with an index. This contrasts with a fixed interest rate, in which the interest rate of a debt obligation stays constant for the duration of the agreement
Source: Investopedia
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Quote : "Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones." - Benjamin Franklin
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