New Delhi: Finance minister Pranab Mukherjee today said dip in food inflation for the week ended 8th January, was not "much consolation" and the government would continue to take steps to tame rising prices, reports PTI.
"Some of the vegetable prices are still high... I do not know what would be the impact of the recent increase (in petrol price) because these figures are two weeks old", he told reporters here.
Although food inflation during the period declined by 1.38 percentage points to 15.52%, vegetable and onion prices continue to remain high.
Moreover, the inflation figures do not capture the impact of the recent increase in petrol prices by Rs2.50 per litre.
"But the fact of the matter is (that) from 16.91% it (food inflation) has come down to 15.52%...it is not much consolation but declining trend is there," the minister said.
"We shall have to watch the situation. All necessary, effective steps are being taken including improving of supply management," he added.
On an annual basis, prices of pulses for the week ended 8th January have declined by 14.92%, followed by wheat (6.11%) and potato (2.91%).
Vegetable prices, however, are still up; they are 65.39% more expensive in comparison to the year-ago period.
The process is quite simple. It just involves sending an SMS, and submitting an application form
The fund offers some diversification, not-so-high returns and a high correlation with the direction of the Indian market
Seoul-based Mirae Asset has launched 'Tiger Kospi', its first exchange-traded fund outside South Korea. Tiger Kospi is based on the Kospi 200 and the ETF was listed on the Hong Kong Stock Exchange on Wednesday. It is also the first ETF in Hong Kong to track the Kospi.
Mirae's investment objective for Tiger is to seek to provide investment results which before deduction of fees and expenses, closely correspond to the performance of the Kospi 200 index. The index is based on 200 blue chips and its top five constituents by weightage being Samsung Electronics, Pohang Iron and Steel, Hyundai Motor, Hyundai Heavy Industries and Shinhan Financial Group.
The fund is also being promoted in India. But does it make sense for an Indian individual to invest in the fund? Let's go back to the basics. What does an investor look for when he buys a particular fund? He looks for a higher return, diversification and exposure to an uncorrelated asset class.
For instance, an Indian investor would invest in a foreign fund only if it had a low correlation with the Indian markets. But, while investing in the South Korean market offers a means of diversification, this is marred by the fact that the fund will invest only in stocks of a single country, that is South Korea, and this leads to concentration. A majority of the Fund's assets will be invested in securities that are denominated in Korea Won, which will mean exchange rate risk.
What about returns? Kospi's return for the past nine years has been lower than the Sensex. The compounded annual return of Kospi over the past nine years is about 14% while that of Sensex is almost 18%. Tiger Kospi passes one of the tests; it gives exposure to a new asset class. But is it uncorrelated?
The correlation of Kospi's up and down years to the Sensex is very high. Every year the Kospi was up, the Sensex was up too, and every year the Kospi was down, the Sensex was down as well. Thus what we are getting is some diversification, not-so-high returns, and high correlation with the direction of the Indian market. So why get exposed to it and take additional risk?