Showing posts with label private wealth management. Show all posts
Showing posts with label private wealth management. Show all posts
Monday, 6 July 2015
Tuesday, 30 June 2015
Monday, 22 June 2015
Thursday, 11 October 2012
Deal your Investments the right way
As your
income grows, managing money becomes a significant concern. Though investments
are done by most of us, the investments varies based on the individual
requirements, risk taking capacity and the capability of investing. As it is
subject specific, one has to attain a thorough understanding of wealth
management to make things easier. Before you choose a wealth management firm,
make sure you analyze them not by the number of clients they manage, but on how
good are they are at managing risks and taking care of your investments.
Karvy
Private Wealth has the domain expertise to help you at our behest, making your
life simpler and easier. These wealth advisors are equipped with hands on
knowledge about the changing market dynamics, along with being well acquainted
with the essentials of financial planning, asset allocation, etc.
Karvy
Private Wealth excels in investment management due to a highly proficient team
that is always innovating and inventing new services to help you grow and
manage your wealth. Mail us at wealth@karvy.com and find out how we can help you
multiply your funds with our expertise.
Saturday, 18 February 2012
Singapore Airshow sees deals worth $31 billion
Major announcements include contracts for Boeing, Airbus, Pratt & Whitney, CFM and ATR. This represents a three-fold increase over the total value of deals announced in 2010 and reaffirmed Singapore Airshow's position as a must-attend event in the global aerospace and defence industry calendar.
Over four trade days, Singapore Airshow 2012 played host to some 900 exhibitors from 50 countries and 266 delegations from 80 countries who flew into Singapore to network, establish partnerships and forge new deals. In all, some 38,000 trade visitors from 119 countries visited the show during the first three trade days, compared to some 35,000 in 2010. Of these, over 30 percent were from overseas.
Some 70 percent of exhibitors at Singapore Airshow 2012 have already reaffirmed their plans to exhibit at the next airshow in 2014, underscoring the relevance of Singapore Airshow as an essential platform for them to reach out to their key markets, especially the emerging markets in Asia.
'We are pleased with our experience at the Singapore Airshow. It continues to be a great platform for us to reach out to the aviation community in the Asia Pacific region. As an industry leader, it is critical for us to have a significant presence at major airshows around the world and the Singapore Airshow ranks high on our priorities,' said Katy Padgett, manager, communications at Pratt & Whitney.
'The Singapore Airshow was an important opportunity for UK companies in the aerospace and defence sectors to promote their capabilities and identify potential joint venture opportunities. We were very pleased with the organisation and the opportunities to network with the overseas delegations,' said Adam Thomas, senior government spokesman for Britain's defence and security sector.
Jimmy Lau, managing director of Experia Events, said: 'We are delighted that deals worth over $31 billion were announced at Singapore Airshow 2012, surpassing the $10 billion worth of deals announced in 2010.'
'This reaffirms Singapore Airshow's position as the platform of choice for aviation industry representatives from around the world, targeting the Asia-Pacific markets, to come together, forge new partnerships, conduct business and conclude deals,' he said.
'We are appreciative of the ongoing support of our exhibitors, who continue to find value in showcasing their innovations and technologies at Singapore Airshow. We look forward to delivering an even better experience for our exhibitors and visitors at the next event in 2014.' Indian Air Force chief Air Chief Marshal N.A.K. Browne also visited the show on the opening day, Feb 14.
Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5853799
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Friday, 17 February 2012
The rupee may strengthen further by year-end
Craig Chan, executive director and head of forex strategy & fixed income division (Asia-ex Japan), Nomura Singapore, in an interview with Business Standard's Rajesh Bhayani, shares his outlook on the dollar. He says if a convincing fiscal consolidation plan is presented in the Budget, the Reserve Bank of India could get more freedom to cut rates. We have seen a sharp fall in the rupee over the last six months and now, the rupee has appreciated sharply. Do you think the appreciation is over?
Recent measures by RBI like liberalising extra commercial borrowings, removing the cap on interest rates for deposits of non-resident Indians and measures to stem excess speculation in the forwards market has helped and inflows have resumed.
Along with the RBI steps, policy responses by the Indian government were also positive, leading to a reversal of the weakness in the rupee. In the coming Budget, if there is a convincing fiscal consolidation plan, RBI would have more freedom to cut rates. This type of policy coordination would be positive for attracting portfolio investment into the country and the rupee would certainly strengthen because of that.
Nomura is still looking at the rupee standing at 47.2 against the dollar by the year-end. Which risk factors can make the flow of portfolio money vulnerable? The global backdrop remains a major driver and the importance of this is reflected in India's financing gap.
The main concerns from our financing gap analysis are equity outflows and short-term debt obligations, which may be $25 billion if there is a rollover rate of around 70 per cent. Add to this the large current account deficit, estimated at around $65 billion this year.
Another concern is the liquidity tightness from RBI's dollar selling continuing and having an impact on the economy. This liquidity gap has been accounted for largely by the fall in currency reserves, adjusting for valuation and coupon effects. This data suggests RBI sold around $15 billion in spot and forwards.
These are just some of the factors that could pose risks to portfolio inflows. However, if this is followed by fiscal consolidation and rate cuts, which is likely, the local environment would be more conducive to capital inflows.
Any risk from the euro zone?
India's vulnerability is still intact and would re-emerge if a phase of deleveraging/repatriation emer-ges from the euro zone. That said, if recession and deflation risks deepen in the euro zone, it is likely that the European Central Bank could go for full-blown, US style quantitative easing. From a global risk perspective, this would be positive for India.
What do you think of the rupee's competitiveness vis-a-vis other currencies?
Looking from a trade-weighted perspective, our forex valuation analysis indicates the Indian currency is still around five per cent undervalued, even after considering the recent rally. This means it remains relatively competitive.
The rupee is still around 11 per cent weaker against the dollar, compared to the lows seen around August. This has helped make Indian exports and portfolio investment into India more attractive.
How do you see the dollar performing in the near future?
Nomura expects the broad dollar to strengthen marginally through the second quarter this year. However, this is being led primarily by our view of the euro's weakness.
There could be some divergence in the euro's performance against most of the G10 and emerging market currencies in the first half of the year because of negative idiosyncratic factors for the euro. These include capital flight out of euro zone fixed-income and growth underperformance. Through the second half of the year, the broad dollar weakness is expected to resume.
Do you see central banks globally acting in a coordinated manner?
When most other central banks in the region were easing their monetary policies a few months earlier, India was cautious, owing to high inflation. Now, with a cut in the cash reserve ratio, India has also indicated its easing bias. This has led to a convergence in policy with the region. But India is relatively late in changing its bias, though understandably, given the stickiness of headline and underlying inflation.
Source: http://www.rediff.com/business/slide-show/slide-show-1-inter-the-rupee-may-strengthen-further-by-year-end/20120217.htm
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Thursday, 16 February 2012
India eases merger norms in telecom sector
"Merger up to 35 percent market share of the resultant entity will be allowed through a simple, quick procedure," Communications Minister Kapil Sibal said, reading out the changes in policies governing licences, spectrum and merger norms. Sibal said that all players would henceforth need to stick to the prescribed limit on spectrum and that mergers beyond 35 percent would be allowed only in cases where it did not violate this limit.
The Supreme Court has ordered revocation of 122 licences issued in 2008 affecting a few foreign players such as Olso-based Telenor, the parent firm of Uninor, Russian Sistema which has a joint venture with Shyam Group and runs its India operations under the MTS brand, and Abu Dhabi-based Etisalat, which has 45 percent stake in Indian telecom firm Etisalat DB. Many of the affected players have hinted at exiting from their India businesses that would lead to a consolidation in the industry. The minister said that all future licences will be unified licences and allocation of spectrum will be de-linked from the licence.
"Spectrum, if required, will have to be obtained separately," Sibal said and added that 2G spectrum sharing will be permitted but in the same licence service area and the licences will be renewed after 10 years. Also, licence fee will not be uniform across all telecom licences and service areas, and will be made equal to eight percent of the adjusted gross revenue (AGR) in two yearly steps starting from 2012-13.
Service providers will also be allowed to share 2G spectrum. But the minister ruled out any possibility of allowing the same for 3G spectrum sharing.
Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5850540
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The Supreme Court has ordered revocation of 122 licences issued in 2008 affecting a few foreign players such as Olso-based Telenor, the parent firm of Uninor, Russian Sistema which has a joint venture with Shyam Group and runs its India operations under the MTS brand, and Abu Dhabi-based Etisalat, which has 45 percent stake in Indian telecom firm Etisalat DB. Many of the affected players have hinted at exiting from their India businesses that would lead to a consolidation in the industry. The minister said that all future licences will be unified licences and allocation of spectrum will be de-linked from the licence.
"Spectrum, if required, will have to be obtained separately," Sibal said and added that 2G spectrum sharing will be permitted but in the same licence service area and the licences will be renewed after 10 years. Also, licence fee will not be uniform across all telecom licences and service areas, and will be made equal to eight percent of the adjusted gross revenue (AGR) in two yearly steps starting from 2012-13.
Service providers will also be allowed to share 2G spectrum. But the minister ruled out any possibility of allowing the same for 3G spectrum sharing.
Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5850540
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Want to be an entrepreneur? Here's some good news...
Students and entrepreneurs can take it easy now. A group of 20 people representing the Ministry of Finance, Ministry of Micro Small and Medium Enterprises, Ministry of Agriculture, Department of Information Technology and banks like Small Industries Development Bank of India are devising methods to support their business plans.
"A special group has been formed to promote angel investment and early funding to start-ups and entrepreneurs. The group is looking at the availability of angel investment and venture capital funding, and will give recommendations on how to encourage investments from the government and the private sector and how to build that ecosystem," said a member of the group.
The group has already met four times, and by April-end a final report is expected, he added. "We want to make it easy for people to make investments. While banks, venture capital funds and financial institutions make it easier for people to set up ventures, we are considering if we can grant tax exemption (for a fixed limit) to people providing funding to start-ups," the official added.
While it largely depends on what idea an entrepreneur has, any fresh start-up will be entertained. The funding would be done through the normal channels. There are various venture capitalists, and the government is also contemplating to create some funds.
The success rate is 60-70 per cent, which is comparable to that in America. A successful business, says DST, is one which has managed to survive at least five years. Those 20-30 per cent that manage to make it big are the ones that have a turnover in excess of Rs 100 crore (Rs 1 billion).
Romesh Wadhwani, founder of Symphony Technology Group and chairman of Wadhwani Foundation, which promotes the National Entrepreneurship Network, says, "Apart from bureaucratic problems, early stage funding is hard to come by in India. "Venture capitalists here behave like private equity and private equity behaves like industrial groups. Angel funding is non-existent."
As Wadhwani puts it: "Entrepreneurs need some kind of small business and loan guarantee program which is efficient and easy to get. Venture capital is difficult to find in India even when a product or service is ready for the market.
"Unless you are a proven entrepreneur or you come from a business family or have hard assets like land and machinery, it is difficult to find ways to fund your venture." Deep Kalra, Founder & CEO of MakeMyTrip, is of the view that over the years, the funding situation for start-ups has improved. Already there are a 100-plus venture capitalists and private equity players.
"When I started 11 years ago, the situation was bleak, but now it is quite the opposite. If you have a good idea, there are several channels available for funding it," said Kalra.
Source: http://www.rediff.com/business/slide-show/slide-show-1-want-to-be-an-entrepreneur-heres-some-good-news/20120216.htm
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Wednesday, 15 February 2012
India's most investment friendly states, Gujarat tops
Five out of 20 industrial states led by Gujarat have clearly emerged as preferred investment destinations by attracting 53.56 per cent of total live investments worth Rs 120.34 lakh crore, according to a recent study by Assocham.
The remaining 15 states received Rs 55.89 lakh crore worth of proposals.
1. Gujarat
Investment: Rs 16.28 lakh crore
Gujarat has emerged the most preferred investment destination. Gujarat, of the total proposals worth Rs 16.28 lakh crore, attracted 39.2 per cent in electricity, 24.2 per cent in manufacturing, 16.2 per cent in services, 14.3 per cent in real estate, 5.2 per cent in irrigation and 0.9 per cent in mining.
2. Maharashtra
Investment: Rs 14.14 lakh crore
Maharashtra, of the total proposals worth Rs 14.14 lakh crore, attracted 37.1 per cent in services, 31.7 per cent in electricity, 18.7 per cent in real estate, 11 per cent in manufacturing, 1.1 per cent in irrigation and 0.5 per cent in mining.
3. Andhra Pradesh
Investment: Rs 12.09 lakh crore
Andhra Pradesh, of the total proposals worth Rs 12.09 lakh crore, attracted 32.5 per cent in electricity, 21.7 per cent in manufacturing, 19.8 per cent in services, 11.6 per cent in irrigation, 11.6 per cent in real estate and 2.8 per cent in mining.
4. Odisha
Investment: Rs 12.09 lakh crore
Odisha, of the total proposals worth Rs 12.09 lakh crore, attracted 44.2 per cent in manufacturing, 40.4 per cent in electricity, 7.4 per cent in services, 6.5 per cent in mining, 0.9 per cent in real estate and 0.6 per cent in irrigation.
5. Karnataka
Investment: Rs 9.85 lakh crore
Karnataka has clocked a share of about 8.18 per cent in the total live investments worth Rs 120.34 lakh crore at the end of the year. Of the total investment proposals, Karnataka attracted 38.9 per cent in manufacturing, 24.6 per cent in services, 15.2 per cent in real estate, 5.6 per cent in irrigation and 1.5 per cent in mining.
6. Tamil Nadu
Investment: Rs 9.13 lakh crore
7. Jharkhand
Investment: Rs 7.16 lakh crore
Jharkhand was at seventh position with Rs 7.16 lakh crore investment proposals. Manufacturing has got 63.1 per cent share in total live investments in Jharkhand.
8.West Bengal
Investment: Rs 6.23 lakh crore
9.Madhya Pradesh
Investment: Rs 5.65 lakh crore
10.Uttar Pradesh
Investment: Rs 5.38 lakh crore
11.Haryana
Investment: Rs 4.98 lakh crore
12.Chhattisgarh
Investment: Rs 4.56 lakh crore
13. Rajasthan
Investment: Rs 2.54 lakh crore
14. Bihar
Investment: Rs 2.38 lakh crore
15. Punjab
Investment: Rs 2.16 lakh crore
16.Kerala
Investment: Rs 2.12 lakh crore
17. Jammu and Kashmir
Investment: Rs 1.11 lakh crore
18. Uttarakhand
Investment: Rs 1.07 lakh crore
19. Himachal Pradesh
Investment: Rs 84,062 crore
20. Assam
Investment: Rs 58,179 crore
Source: http://www.rediff.com/business/slide-show/slide-show-1-most-investment-friendly-nations/20120215.htm
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Tuesday, 14 February 2012
Investing In 2012: The Road Ahead
The year gone by
The year 2011 has come to an end and we now embark upon a new year with tis own uncertainties and possibilities. So, what should investors expect going ahead? How should they tackel the unraveling economic downturn? What should be the playbook? Here, we attempt to address this and other peripheral issues.
To say that the past couple of years have been extremely difficult for Indian investors would be an understatement. The global economic situation continues to be fragile. According to RBI’s December 2011 Mid-Quarter Policy Review, the recent European Union Summit agreement did not really succeed in easing the negative market sentiment. And with no credible solution as yet to the immediate sovereign debt problem, risks of persistent financial turbulence as well as a recession in Europe remain high.
At the EU Summit, the European leaders agreed on a stronger coordination of economic policies to strengthen fiscal discipline. While this would be a welcome step for the medium- to long- term sustainability of the Euro area, the current short-term funding perssures still continue. While Q3 Euro-area growth came in at just 0.8%, growth in 2012 is expected to be even weaker. Also, crude oil prices remain elevated. A combination of these factors poses the highest degree of risk to emerging market economies, including India.
Consequently, India and other countries in Asia have witnessed currency depreciation as well as policy rate changes. The news on the domestic front, too, is not very good. Growth is definitely down. Significantly, the Index of Industrial Production (IIP) grew at -5.1% in October 2011. Moreover, GDP has de-grown to 6.9% in Q2FY12 versus 8.6% clocked last year, while inflation at 9.11% continues to be high, at least above the comfort level of the RBI.
To make matters worse, the rupee has fallen considerably. Since August 5,2011, the day when the US debt downgrade occurred, the rupee had depreciated by about 17% against the US dollar (as of December 15,2011). Given the scenario, the RBI has taken setps to attract inflows, including raising limits on investment in government and corproate debt, deregualting savings bank rates as well as NRI deposit rates, and increasing the ceiling on corporate borrowings abroad, among others. However, it remains to be seen whether these are effective in arresting the currency fall. Basically, the outlook going forward remains uncertain.
Lingering uncertainty
They say that when it rains, it pours. As we all know, much needs to be done on the policy and reforms front too. We need meaningful reforms and we need them fast. The bottlenecks as well as manipualtion in food supply are well known. For example, it is common knowledge that the producer/farmer gets only a fraction of the price which the end-consumer eventually pays, with the middle-men pocketing much of the difference. In other words, while we are paying through our noses for the daily food on our table, there have been regular reports of farmers committing suicides due to financial distress. Meanwhile, the supply chain is laughing all the way to the bank.
The irony is that huge quantities of food grains are rotting in government warehouses for lack of proper storage and distribution facilities. The loopholes in the PDS (public distribution system) are well documented. However, successive state and central governments have done precious little to address the issue. Organized retail would benefit the farmer as well as the consumer. Unfortunately, vote bank politics has taken precedence over reforms in a sector that is in dire need of improved infrastructure.
Mining is yet another ‘minefield’. For instance, in regard to our energy needs, we have the reserves, yet we import coal. If public sector miners are inefficient, there is no reason that coal mining should not be opened up to the private sector. However, it appears that politics and reforms do not go hand in hand with each other.
Ina nutshell, when an economy is faced with a situation of continuously rising interest rates, a self-imposed paralysis on reforms, and a falling currency (perhaps the only fator where the government is not entirely responsible), it is but natural that business confidence gets hit and investors, both domestic and foreign, start getting anxious.
Investment strategy going forward
So, amid all this negativity, one has to ask oneself- what are the positives?
Well, fortunately a lot. Although GDP growth rate has decelerated, India remains one of the fastest-growing economies in the world. Our demographic and domestic consumption-led demand is oru strength. At a timewhen the West is in the midst of nationalizing its banking system, our banks are well-capitalized, well-regulated, and most are already nationalized. Moreover, with a savings rate of 35%, India is as insulated as it can be against a global recession.
Therefore, if the RBI manages to control inflation, thereby maintaining at least the domestic purchasing power of the rupee, in an economy that has limited dependence on exports, then growth can be maintained o the back of domestic consumption itself. Moreover, things are not likely to get any worse. Most of the bad news is already discounted in the valuations. So, it would be a mistake to reject equity as an asset class altogether. However, this is precisely what’s happening. Most investors have run out of patience and others are being discouraged and alarmed by media-fed doomsday predictions.
This, in itself, is the crux of the issue. Sell on bugles and buy on cannons. Timing the market is impossible, time in the market is crucial. Buy when everyone else is fearful and sell when everyone else is greedy. These are pearls of wisdom given to us by investment gurus, such as Warren Buffett. But it looks like these teachings are best appreciated on paper- practical applciation of the same is best left to the next guy. Clearly, no matter how good your stock or mutual fund picks are, if you don’t play this investing game with gumption, reason and a measure of level-headedness, winning is almost impossible.
What to do is the simplest part; it’s what not to do that will separate the men from the boys. Stick with your systematic investments. Do not expect to make any money; in fact, in the near future, you may even be in the negative. But that’s what systematic investments are meant for. When (and not if!) the next bull run occurs, it is precisely these very SIPs that will hold you in good stead.
The current scenario reminds us of yet another quote from Warren Buffett – “Five years from now, ten years from now, we’ll look back on this period and we’ll see that you could have made some extraordinary (stock market) buys. That doesn’t mean it won’t get more extraordinary a week or a month from now. We have no idea what the stock market is going to do next month or six months from now. We do know that the economy, over a period of time, will do very well, and people who own a piece of it will do well. Just don’t borrow money to buy yoru piece.” Of course, Buffett’s quote is on the American economy but it can literally be copy-pasted to our situation.
Conclusion
Putting it differently, one of the most effective ways to achieve success in your investments is to stick with the basics and shut out all the noise. Markets will rise and fall based on national, international, political, geo-political, economic and financial events. The trick is not to get sucked into the micro aspects and instead focus on the macro picture. In other words, whether your investments are profitable or not is not up to the external factors but entirely up to you. The question is – are YOU up to it?
A.N. Shanbhag
Leading Tax Consultant
Disclaimer: The views expressed in this article are the personal views of the author. They do not necessarily reflect the views of the Karvy Group or the orgnisation that the author represents.
The year 2011 has come to an end and we now embark upon a new year with tis own uncertainties and possibilities. So, what should investors expect going ahead? How should they tackel the unraveling economic downturn? What should be the playbook? Here, we attempt to address this and other peripheral issues.
To say that the past couple of years have been extremely difficult for Indian investors would be an understatement. The global economic situation continues to be fragile. According to RBI’s December 2011 Mid-Quarter Policy Review, the recent European Union Summit agreement did not really succeed in easing the negative market sentiment. And with no credible solution as yet to the immediate sovereign debt problem, risks of persistent financial turbulence as well as a recession in Europe remain high.
At the EU Summit, the European leaders agreed on a stronger coordination of economic policies to strengthen fiscal discipline. While this would be a welcome step for the medium- to long- term sustainability of the Euro area, the current short-term funding perssures still continue. While Q3 Euro-area growth came in at just 0.8%, growth in 2012 is expected to be even weaker. Also, crude oil prices remain elevated. A combination of these factors poses the highest degree of risk to emerging market economies, including India.
Consequently, India and other countries in Asia have witnessed currency depreciation as well as policy rate changes. The news on the domestic front, too, is not very good. Growth is definitely down. Significantly, the Index of Industrial Production (IIP) grew at -5.1% in October 2011. Moreover, GDP has de-grown to 6.9% in Q2FY12 versus 8.6% clocked last year, while inflation at 9.11% continues to be high, at least above the comfort level of the RBI.
To make matters worse, the rupee has fallen considerably. Since August 5,2011, the day when the US debt downgrade occurred, the rupee had depreciated by about 17% against the US dollar (as of December 15,2011). Given the scenario, the RBI has taken setps to attract inflows, including raising limits on investment in government and corproate debt, deregualting savings bank rates as well as NRI deposit rates, and increasing the ceiling on corporate borrowings abroad, among others. However, it remains to be seen whether these are effective in arresting the currency fall. Basically, the outlook going forward remains uncertain.
Lingering uncertainty
They say that when it rains, it pours. As we all know, much needs to be done on the policy and reforms front too. We need meaningful reforms and we need them fast. The bottlenecks as well as manipualtion in food supply are well known. For example, it is common knowledge that the producer/farmer gets only a fraction of the price which the end-consumer eventually pays, with the middle-men pocketing much of the difference. In other words, while we are paying through our noses for the daily food on our table, there have been regular reports of farmers committing suicides due to financial distress. Meanwhile, the supply chain is laughing all the way to the bank.
The irony is that huge quantities of food grains are rotting in government warehouses for lack of proper storage and distribution facilities. The loopholes in the PDS (public distribution system) are well documented. However, successive state and central governments have done precious little to address the issue. Organized retail would benefit the farmer as well as the consumer. Unfortunately, vote bank politics has taken precedence over reforms in a sector that is in dire need of improved infrastructure.
Mining is yet another ‘minefield’. For instance, in regard to our energy needs, we have the reserves, yet we import coal. If public sector miners are inefficient, there is no reason that coal mining should not be opened up to the private sector. However, it appears that politics and reforms do not go hand in hand with each other.
Ina nutshell, when an economy is faced with a situation of continuously rising interest rates, a self-imposed paralysis on reforms, and a falling currency (perhaps the only fator where the government is not entirely responsible), it is but natural that business confidence gets hit and investors, both domestic and foreign, start getting anxious.
Investment strategy going forward
So, amid all this negativity, one has to ask oneself- what are the positives?
Well, fortunately a lot. Although GDP growth rate has decelerated, India remains one of the fastest-growing economies in the world. Our demographic and domestic consumption-led demand is oru strength. At a timewhen the West is in the midst of nationalizing its banking system, our banks are well-capitalized, well-regulated, and most are already nationalized. Moreover, with a savings rate of 35%, India is as insulated as it can be against a global recession.
Therefore, if the RBI manages to control inflation, thereby maintaining at least the domestic purchasing power of the rupee, in an economy that has limited dependence on exports, then growth can be maintained o the back of domestic consumption itself. Moreover, things are not likely to get any worse. Most of the bad news is already discounted in the valuations. So, it would be a mistake to reject equity as an asset class altogether. However, this is precisely what’s happening. Most investors have run out of patience and others are being discouraged and alarmed by media-fed doomsday predictions.
This, in itself, is the crux of the issue. Sell on bugles and buy on cannons. Timing the market is impossible, time in the market is crucial. Buy when everyone else is fearful and sell when everyone else is greedy. These are pearls of wisdom given to us by investment gurus, such as Warren Buffett. But it looks like these teachings are best appreciated on paper- practical applciation of the same is best left to the next guy. Clearly, no matter how good your stock or mutual fund picks are, if you don’t play this investing game with gumption, reason and a measure of level-headedness, winning is almost impossible.
What to do is the simplest part; it’s what not to do that will separate the men from the boys. Stick with your systematic investments. Do not expect to make any money; in fact, in the near future, you may even be in the negative. But that’s what systematic investments are meant for. When (and not if!) the next bull run occurs, it is precisely these very SIPs that will hold you in good stead.
The current scenario reminds us of yet another quote from Warren Buffett – “Five years from now, ten years from now, we’ll look back on this period and we’ll see that you could have made some extraordinary (stock market) buys. That doesn’t mean it won’t get more extraordinary a week or a month from now. We have no idea what the stock market is going to do next month or six months from now. We do know that the economy, over a period of time, will do very well, and people who own a piece of it will do well. Just don’t borrow money to buy yoru piece.” Of course, Buffett’s quote is on the American economy but it can literally be copy-pasted to our situation.
Conclusion
Putting it differently, one of the most effective ways to achieve success in your investments is to stick with the basics and shut out all the noise. Markets will rise and fall based on national, international, political, geo-political, economic and financial events. The trick is not to get sucked into the micro aspects and instead focus on the macro picture. In other words, whether your investments are profitable or not is not up to the external factors but entirely up to you. The question is – are YOU up to it?
A.N. Shanbhag
Leading Tax Consultant
Disclaimer: The views expressed in this article are the personal views of the author. They do not necessarily reflect the views of the Karvy Group or the orgnisation that the author represents.
Why commodities are must in your portfolio
The year 2011 was all about rising costs and expenses. This year is no different either. The liquidity-driven rally in 2012 so far has pushed up the prices of commodities such as zinc (11%), copper (8.78%), Dubai Crude oil (7%), gold (10%) and silver (21%) in US dollar terms. Firm crude oil prices pose a key risk as it can push up the inflation numbers further in India, as crude oil is the largest item on the import bill.
"India is a commodity-deficient country and a rise in commodity prices can push stock prices downwards. Also, a low correlation between commodities and equities makes commodities a good diversification option for investors. Hence, investors should have an exposure to commodities," says Arvind Bansal, vice-president and head - Multi-manager Investments, ING Investment Management India.
Though many agree on the importance of commodities as an investment option, inadequate information and limited options in this space make many investors ignore commodities. But the schemes launched by various fund houses investing in the 'commodity theme' make a good entry point.
Commodity Funds
Indian mutual funds cannot take direct exposure to commodities, keep aside gold. These schemes invest in commodities-related companies such as metals and oil, in India or abroad. You can choose among the schemes that invest in 'energy', 'agriculture' or 'mining' verticals. Each such fund, dedicated to a particular sector or theme, will help investors to invest in companies that mine, manufacture, process commodities or manufacture inputs such as equipment for commodities mining and processing.
In case of agriculture, fund managers focus on companies that manufacture agriculture inputs such as seeds, fertilisers, equipment. The rationale behind this logic is that these companies will clock profits whenever the underlying commodity prices see a spike.
To choose winners when the tide turns in favour of commodities, one can look at MF schemes that help investors pick and choose companies in this space, both in India and overseas. "Investors should invest 5-15% of their equity allocation in such funds with 3-5 year time frame," adds Bansal.
"Most of these funds relate to international commodity stocks either through the direct or feeder fund route. The one-year performance of most of such funds has ranged between 15% and 36%. Even within these, it is primarily the gold feeder funds which are more prominent," says Jayant Pai, vice-president, Parag Parikh Financial Advisory Services.
Of course, the ride may not be absolutely smooth. You are exposed to risks such as a price correction in underlying commodity, a poor sentiment in stock markets and of course currency risks as you are investing in a global environment.
Gold
There has been a rally in gold prices and industry experts are still bullish on the yellow metal. In 2011, gold delivered a return of 10.72%. Though purchase of physical gold makes many comfortable, gold exchange-traded funds (ETFs) are gaining momentum with Rs 9,201 crore invested in gold through the ETF route due to factors such as ease of transaction, efficient taxation and safety. Units of gold ETFs typically track the gold prices of half or one-gram of gold, as the case be.
Source: http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/why-commodities-are-must-in-your-portfolio/articleshow/11879413.cms
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Valentine's Day Contest
Most of us plan something for the Valentine’s month beforehand. You can go on a romantic date with your special one or you can watch a movie. There are endless number of things that you can gift your valentine. However, the biggest gift one can give to their loved one is life security. So, let this valentine be a lifetime security of love and happiness. Protect your special one by getting them a life insurance premium. You can go for Term plans, Whole life plans, Endowment Plans, Unit Linked Endowment Plans, Pension Plans, Child Plans and others. Check out the various Insurance products by Karvy on http://www.karvywealth.com/insurance.aspx We make sure we provide the right kind of product for you according to your requirements.
Tell us what is the best Valentine gift that you have ever received or given and the best gift will receive some exciting gifts.
Friday, 10 February 2012
Forecast 2012 across asset classes
As the economy shows signs of decreasing GDP growth rate, the Indian real estate industry faces its own share of concerns. Real estate developers are reeling under high debt and FDI inflows have also slowed down.The recent increase in home loan interest rates is expected to dampen sales even further. Amid these macro-economic conditions, the Indian real estate asset classes across the prime cities of India have seen mixed sentiment. Residential sales remained slow in most of these cities in 2011. Residential project launches also showed a marked slowdown by 3Q11. The demand for office and retail space leasing remained healthy in most of the cities.
The year that was
Commercial real estate : Leasing activity in the office space realm remained healthy across major cities in 2011. These cities also saw strong pre-leasing activity in buildings under construction. Occupiers mostly expanded their renewed leases or consolidated office spaces, with an emphasis on the secondary and suburban sub-markets of the prime cities instead of the central business districts because of ample availability of leasable spaces in these areas.
The Special Economic Zone (SEZ) spaces saw stronger demand compared to non-SEZ office spaces in 2011. Due to the prevailing uncertainty about the global economy, a marginal slowdown in leasing activity was seen in 3Q11. Office space rents and capital values also increased marginally in some sub-markets in 2011, sincevacancy levels remained range-bound.
Retail real estate: The retail sector sentiment remained buoyant as retailers continued to expand into both high streets and malls. However, high streets witnessed stronger leasing activity across the prime cities in India. Major retailers continued to expand decisively, not only into the prime cities, but also smaller cities and towns. Malls are also witnessing healthy leasing activity, with pre-commitments in malls under construction remaining healthy. However, demand remained polarized to select good malls.
The Delhi NCR saw the strongest absorption rate, while Bangalore showed strength in high street leasing. Rents and capital values increased nominally in quite a few sub-markets of Delhi and Mumbai saw a rise in capital values. The suburban sub-markets of Bangalore and Mumbai also displayed a rise in rental values in light of the strong demand from retailers.
Residential real estate: The residential real estate market was sluggish in 2011. Sales dropped in the prime cities of India, except in Bangalore, which saw healthy sales. In Delhi NCR, the Noida sub-market had led absorption over the past 11 quarters, but witnessed a decrease in 2011.
Cautious buyer sentiment prevailed macroeconomic factors, such as rising interest rates and surging inflation. The spate of hikes in interest rates by the Reserve Bank of India (12 times over the past 10 months) led to a steep rise in the EMIs of home loan borrowers. While rising home loan rates have exerted pressure on buyers, developers have been constrained by the rising costs of construction and debt. We are now looking at a scenario where both developers and buyers are impacted by adverse macroeconomic factors.
Rising input costs caused developers to slow down on construction and new launches. Most of the new launches in 2011 were in the mid-income and budget homes segment. Capital values increased to a limited extent. Although brochure prices either remained stable or increased marginally in select projects, developers offered discounts on their prices or other freebies during the festive season to improve sales.
Forecast for 2012
Commercial real estate: In 2012, several IT companies are looking to pre-lease office space to take advantage of the favorable commercial terms currently being proposed by commercial office space developers. Demand is expected to remain stable. However, the office space supply is expected to outweigh demand in most prime cities of India. Corporate expansions are likely to decrease due to uncertainties in the global economic situation, which will have an impact on business budgets for next year.
Demand will derive from consolidation in ( and relocation to) Special Economic Zones by large IT occupiers, who will seek to reduce costs and avail of the related tax incentives. Commercial office space rents and capital values are expected to increase across all cities, albeit marginally. Commercial office space investor sentiment will remain cautious in the year ahead. The suburban sub-markets will continue to be preferred by tenants, especially in the case of the IT sector, due to the cost advantage and availability of substantial supply.
Retail real estate: In 2012, enquiries for quality retail space are likely to remain robust as major Indian retialers are seeking to implement their expansion plans in prime cities as well as select Tier-ll and Tier-lll cities. The FDI in multi-brand real estate, when finally permitted, is expected to catalyse a lot of demand from international retailers. That said, international luxury brands will restrict their growth plans to Mumbai, Delhi and Bangalore.
Both large-format and vanilla retailers are expected to chase deals in under-construction projects that provide good branding and business potential. Transactions will be oriented towards a revenue- sharing model rather than straightforward leasing deals. High streets will continue to give strong competition to malls, and there will be significant high street in 2012. Demand polarization towards selected malls wil continue, and this will keep overall vacancy levels high – several poorly-designed and unfavourably located malls will become operational at low occupancy levels in 2012.
Residential real estate: Due to the prevailing uncertainties on the global market and the likelihood of further interest rate hikes by 2012, sentiments on the residential market will remain cautious over the short term. The absorption rate- meaning the ratio of sales over inventory in the market – is likely to be low, and incidence of new launches will decline. Rise in capital values will be marginal because of low sales.
Project-specific price increases can be expected across all sub-markets- this pertains specially to projects that are being delivered or are nearing completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term from a low base. We expect these trends to continue during 4Q11 and 1H12.
Overall macroeconomic conditions will keep investor sentiments at cautious levels, both in terms of FDI and FII. FDI inflows, which are currently muted because of the slowdown in the country’s GDP growth rate, will probably remain sluggish over the short term. However, as the Indian economy continues to show its resilience in 2012, foreign investors will gain in confidence and India will become attractive among competing investment destinations.
Meanwhile, residential developers will continue to tackle the current liquidity crunch due to high interest rates and slow sales. We will see a slowdown in construction activity for the time being. However, as demand improves, improving sales will benefit developers who will focus on execution of their ongoing project portfolios.
Disclaimer : The views expressed in this article are the personal views of the author. They do not necessarily reflect the views of the Karvy Group or the organisation that the author represents.
Ashutosh Limaye
Head – Research & Real Estate Intelligence Service
Jones Lang LaSalle India
The year that was
Commercial real estate : Leasing activity in the office space realm remained healthy across major cities in 2011. These cities also saw strong pre-leasing activity in buildings under construction. Occupiers mostly expanded their renewed leases or consolidated office spaces, with an emphasis on the secondary and suburban sub-markets of the prime cities instead of the central business districts because of ample availability of leasable spaces in these areas.
The Special Economic Zone (SEZ) spaces saw stronger demand compared to non-SEZ office spaces in 2011. Due to the prevailing uncertainty about the global economy, a marginal slowdown in leasing activity was seen in 3Q11. Office space rents and capital values also increased marginally in some sub-markets in 2011, sincevacancy levels remained range-bound.
Retail real estate: The retail sector sentiment remained buoyant as retailers continued to expand into both high streets and malls. However, high streets witnessed stronger leasing activity across the prime cities in India. Major retailers continued to expand decisively, not only into the prime cities, but also smaller cities and towns. Malls are also witnessing healthy leasing activity, with pre-commitments in malls under construction remaining healthy. However, demand remained polarized to select good malls.
The Delhi NCR saw the strongest absorption rate, while Bangalore showed strength in high street leasing. Rents and capital values increased nominally in quite a few sub-markets of Delhi and Mumbai saw a rise in capital values. The suburban sub-markets of Bangalore and Mumbai also displayed a rise in rental values in light of the strong demand from retailers.
Residential real estate: The residential real estate market was sluggish in 2011. Sales dropped in the prime cities of India, except in Bangalore, which saw healthy sales. In Delhi NCR, the Noida sub-market had led absorption over the past 11 quarters, but witnessed a decrease in 2011.
Cautious buyer sentiment prevailed macroeconomic factors, such as rising interest rates and surging inflation. The spate of hikes in interest rates by the Reserve Bank of India (12 times over the past 10 months) led to a steep rise in the EMIs of home loan borrowers. While rising home loan rates have exerted pressure on buyers, developers have been constrained by the rising costs of construction and debt. We are now looking at a scenario where both developers and buyers are impacted by adverse macroeconomic factors.
Rising input costs caused developers to slow down on construction and new launches. Most of the new launches in 2011 were in the mid-income and budget homes segment. Capital values increased to a limited extent. Although brochure prices either remained stable or increased marginally in select projects, developers offered discounts on their prices or other freebies during the festive season to improve sales.
Forecast for 2012
Commercial real estate: In 2012, several IT companies are looking to pre-lease office space to take advantage of the favorable commercial terms currently being proposed by commercial office space developers. Demand is expected to remain stable. However, the office space supply is expected to outweigh demand in most prime cities of India. Corporate expansions are likely to decrease due to uncertainties in the global economic situation, which will have an impact on business budgets for next year.
Demand will derive from consolidation in ( and relocation to) Special Economic Zones by large IT occupiers, who will seek to reduce costs and avail of the related tax incentives. Commercial office space rents and capital values are expected to increase across all cities, albeit marginally. Commercial office space investor sentiment will remain cautious in the year ahead. The suburban sub-markets will continue to be preferred by tenants, especially in the case of the IT sector, due to the cost advantage and availability of substantial supply.
Retail real estate: In 2012, enquiries for quality retail space are likely to remain robust as major Indian retialers are seeking to implement their expansion plans in prime cities as well as select Tier-ll and Tier-lll cities. The FDI in multi-brand real estate, when finally permitted, is expected to catalyse a lot of demand from international retailers. That said, international luxury brands will restrict their growth plans to Mumbai, Delhi and Bangalore.
Both large-format and vanilla retailers are expected to chase deals in under-construction projects that provide good branding and business potential. Transactions will be oriented towards a revenue- sharing model rather than straightforward leasing deals. High streets will continue to give strong competition to malls, and there will be significant high street in 2012. Demand polarization towards selected malls wil continue, and this will keep overall vacancy levels high – several poorly-designed and unfavourably located malls will become operational at low occupancy levels in 2012.
Residential real estate: Due to the prevailing uncertainties on the global market and the likelihood of further interest rate hikes by 2012, sentiments on the residential market will remain cautious over the short term. The absorption rate- meaning the ratio of sales over inventory in the market – is likely to be low, and incidence of new launches will decline. Rise in capital values will be marginal because of low sales.
Project-specific price increases can be expected across all sub-markets- this pertains specially to projects that are being delivered or are nearing completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term from a low base. We expect these trends to continue during 4Q11 and 1H12.
Overall macroeconomic conditions will keep investor sentiments at cautious levels, both in terms of FDI and FII. FDI inflows, which are currently muted because of the slowdown in the country’s GDP growth rate, will probably remain sluggish over the short term. However, as the Indian economy continues to show its resilience in 2012, foreign investors will gain in confidence and India will become attractive among competing investment destinations.
Meanwhile, residential developers will continue to tackle the current liquidity crunch due to high interest rates and slow sales. We will see a slowdown in construction activity for the time being. However, as demand improves, improving sales will benefit developers who will focus on execution of their ongoing project portfolios.
Disclaimer : The views expressed in this article are the personal views of the author. They do not necessarily reflect the views of the Karvy Group or the organisation that the author represents.
Ashutosh Limaye
Head – Research & Real Estate Intelligence Service
Jones Lang LaSalle India
Industrial output grows by 1.8%
Industrial production grew by just 1.8 per cent year-on-year in December 2011 because of contraction in mining and capital goods sectors and a lower manufacturing sector growth. Factory output growth, as measured by the index of industrial production, was at 8.1 per cent in December 2010.
Output of the manufacturing sector, which constitutes over 75 per cent of the index, rose at a lower rate of 1.8 per cent in December, compared to a growth of 8.7 per cent in the same month of 2010, according to the official data released on Friday.
Besides, capital goods sector witnessed a contraction of 16.5 per cent, against a growth of 20.2 per cent in the same month in 2010. Mining output too contracted by 3.7 per cent in December, against 5.9 per cent growth in the year ago period.
However, power generation witnessed a good growth of 9.1 per cent in December 2011, compared to 5.9 per cent in the year ago period. During the month, 15 out of 22 industry groups witnessed a positive growth. During the month output of basic goods went up by 4 per cent, against 7.8 per cent in the year ago period. However, intermediate goods witnessed a contraction of 2.8 per cent, against 8.1 per cent growth in December 2010. During the April-December 2011, the IIP growth stood at 3.6 per cent, against 8.3 per cent in corresponding period a year ago.
Besides, the IIP figure for November, 2011, has been revised to 5.94 per cent from the provisional estimates of 5.9 per cent. Commenting on the IIP figures, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the numbers are expected to bottom out in the third quarter and revive in the January-March period.
"I thought the third quarter would be a kind of bottoming out quarter. We have to see whether that really works out," he said. Asked if the IIP numbers are likely to pick up in the subsequent months, he said, "I hope so". During December 2011, consumer goods witnessed a 10 per cent upswing, as against a low growth of 3.5 per cent in the corresponding month of 2010.
Furthermore, consumer durables production increased by 5.3 per cent, compared to a growth of 7.8 per cent in December, 2010. During the month under review, output of consumer non-durables also shoot up by 13.4 per cent. The segment grew by a mere 0.6 per cent in December 2010.
The lower industrial output growth in the month was on expected lines as the eight core industries had registered a muted growth of 3.1 per cent growth in December, mainly due to slackening output of crude oil, steel and natural gas. The core sector grew by 6.3 per cent in December 2010. The eight industries together contribute 37.9 per cent to the overall Index of Industrial Production.
Earlier this week, the Central Statistical Organisation had estimated the Indian economy to grow at a slower pace of 6.9 per cent in the current fiscal, against 8.4 per cent in 2010-11. The decline in IIP numbers, experts said, will make a good case for further rate cuts by the Reserve Bank. Last month it cut cash reserve ratio by 50 basis points to 5.5 per cent.
Source: http://www.rediff.com/business/report/industrial-output-grows-1-point-8-pc-in-dec-2011/20120210.htm
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Wednesday, 8 February 2012
Over 250 companies to participate in BioAsia 2012
The stage is set for the ninth edition of BioAsia, the annual global bio business forum, beginning here Feb 9.
According to Federation of Asian Biotech Associations (FABA), the organizers of BioAsia 2012, over 250 companies have confirmed their participation in the three-day event. The country partners for this year's event include Sri Lanka, Belgium, Germany and Korea. In all, 35 countries have confirmed their participation with major delegations coming from Sri Lanka, Korea, Iran, Germany, Belgium, US, Singapore, Egypt, Thailand, Nepal and several African nations.
Regulators from 10 countries will also be participating in the event, said a statement from FABA.Bharat Biotech International Limited and GVK Biosciences will be the industry host and co-host respectively.
"BioAsia provides a platform for companies to exhibit, launch and showcase their products and services," said Manni Kantipudi, CEO, GVK BIO. "Over the years, BioAsia has become an industry oriented event while the Bangalore India Bio event has remained research oriented," said Krishna Ella, chairman and managing director, Bharat Biotech.
He pointed out that Hyderabad is the biggest manufacturer of biotech products and vaccines in the country. The partners for BioAsia 2012 include Frost and Sullivan, Confederation of Indian Industries, Alexandria India, Lonza India, Hyde Engineering & Consulting and Yes Bank.
Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5829586
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According to Federation of Asian Biotech Associations (FABA), the organizers of BioAsia 2012, over 250 companies have confirmed their participation in the three-day event. The country partners for this year's event include Sri Lanka, Belgium, Germany and Korea. In all, 35 countries have confirmed their participation with major delegations coming from Sri Lanka, Korea, Iran, Germany, Belgium, US, Singapore, Egypt, Thailand, Nepal and several African nations.
Regulators from 10 countries will also be participating in the event, said a statement from FABA.Bharat Biotech International Limited and GVK Biosciences will be the industry host and co-host respectively.
"BioAsia provides a platform for companies to exhibit, launch and showcase their products and services," said Manni Kantipudi, CEO, GVK BIO. "Over the years, BioAsia has become an industry oriented event while the Bangalore India Bio event has remained research oriented," said Krishna Ella, chairman and managing director, Bharat Biotech.
He pointed out that Hyderabad is the biggest manufacturer of biotech products and vaccines in the country. The partners for BioAsia 2012 include Frost and Sullivan, Confederation of Indian Industries, Alexandria India, Lonza India, Hyde Engineering & Consulting and Yes Bank.
Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5829586
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