Citizens' Issues
Indian ship-owners make their own arrangements to fight piracy

Despite the Indian Navy’s success in combating the dreaded Somali pirates yesterday, leading players from both private and public companies are putting their security measures in place

Increasing intensity of Somali pirates' activities in the Gulf of Aden, one of the busiest trade routes in the world, and Indian waters has alarmed the government and ship-owners, and they have started taking various concrete steps to protect assets, and most importantly, save the lives of seafarers.

"Piracy is an international issue and it has been menacing the international shipping industry as well as the Indian shipping industry," S Hajara, chairman & managing director, Shipping Corporation of India Limited, told Moneylife.  

Now, Somalia pirates have spread their operations in the west coast of the Arabian Sea, making Indian ships more vulnerable to their piracy operations. In a major development which proves the extent of piracy, yesterday, the Indian Navy arrested 61 pirates and rescued 13 sailors from captivity in the Arabian Sea, about 600 nautical miles west of India.

However, the nationalities of the pirates have not been disclosed yet. According to a report, in 2009, Somali pirates collected around $600 million in ransom.

To tackle this issue, ship-owners are taking some small but concrete steps such as increasing speed of vessels and creating strong-rooms for sailors when they are attacked.

"Whatever best market practices we have got, we are putting it to protect ships such as putting barbed wires on ships. Another step is (creating a) 'safe house'. One of the engine rooms or bridges is designated as a safe house, where, in case pirates board the ship, crew members gather and lock themselves, out of the reach of pirates, and guide the Navy to undertake a rescue operation," Anil Devli, chief executive officer, Indian National Shipowners Association (INSA) told Moneylife.

"We are not seeing any drop in shipping activities through piracy affected areas," added Mr Devli.

The government is also taking some serious security measures to protect ships from pirates. However, some intensive actions are needed, feel industry experts.

"Various measures have already been discussed in the Ministry of Shipping," Dr Satish B Agnihotri, Director General of Shipping, told Moneylife. However, he refused to offer any further comments.

"The Indian Navy has become very active in patrolling the seas. The Indian government should set up a north-south corridor along the Indian coasts, which will ensure that the corridor and exclusive economic zones (EEZs) are manned by our security force," added Mr Devli.      

However, private owners' demand to allow guards with weapons has not been approved.
"The government is taking their own steps. We have asked the government for armed guards to be deployed on those ships which travel though piracy-affected areas, but nothing has come yet," Anjali Kumar, a spokesperson for Great Eastern Shipping Co Ltd, India's largest private sector shipping firm, told Moneylife.

"The company is also taking all safety measures for our ships," added Ms Kumar. However, she refused to share detailed information on the safety measures.

Piracy is not just a threat for the ship or its sailors; it is also proving expensive for companies as insurers are increasing premiums for insurance coverage.

"By taking safety and security measures on a large scale, we can demonstrate to the Joint Water Committee that the Indian Navy is extremely proactive and therefore, we can lower insurance premiums," said Mr Devli.   

As piracy is an international concern, all countries, which have been facing the problem, should come together and tackle the issue, say industry sources.

"We look forward not to our government, but all countries' governments (being involved). The United Nations should ensure that international navigational passages are safe and secured," said Mr Hajara.

Though piracy activities are increasing, Indian seafarers have not been discouraged from pursuing this profession.

"Despite threat to lives, seafarers are venturing into pirate infested areas on the back of the high patrolling by the Navy," Abdulgani Y Serang, general secretary, National Union of Seafarers of India told Moneylife.
India should also take some lessons from Israel. Israeli ships are usually not attacked as they are always prepared to face pirates.

"Israeli seafarers, at their young age, are taught how to fight with pirates with weapons and protect oneself," added Mr Serang.



Suresh Sadagopan

6 years ago

It is absolutely necessary to allow armed guards on the ships operating in the pirate infested waters. Israel & Russia are already doing it. We don't do anything proactively. But at least, we can follow the lead of these countries. Our government believes in fire fighting - it will consider acting probably after many more lives are lost - after all, these are the lives of common people - not the politicians... so, it does not matter...


6 years ago

It would have been good if some real seafarers could also have been asked to comment here on what they have to say about the whole thing. Sea mans club ballard estate, lbs college sewri , Or even on the various merchant navy egroups online.

WPI inflation likely to be about 8% in March: Dun & Bradstreet

The research firm stated that although food inflation has moderated in recent weeks, the ongoing surge in crude prices and the uptick in international food prices have increased the upside risks to inflation

New Delhi: India's wholesale price index (WPI) based inflation is likely to be around 8% in March on account of rising global crude prices, much above the government estimate of 7%, reports PTI quoting research firm Dun & Bradstreet.

The research firm "expects the WPI inflation to be around 7.9%-8.1% during March."

Overall inflation rose marginally to 8.31% in February, 2011, from 8.23% in the previous month. The government expects it to fall to 7% by March-end.

Food inflation has been declining for the past few weeks on account of a fall in prices of vegetables and fruits. It fell to a single digit for the week ended 26th February, after a gap of nearly three months, at 9.52%.

However, while international crude oil prices have softened recently, they are still hovering around $100 a barrel.

"Despite the moderation in food inflation in the past few weeks, upside risks to inflation have mounted, given the continuous surge in global crude oil prices and the uptick in international prices of food articles," the report noted.

The easing of food inflation, however, may not prompt the Reserve Bank of India (RBI) to halt monetary tightening as some essential commodities are still dearer and rising commodity and crude oil prices will have a bearing on the rate of price rise.

"The RBI is expected to continue with its current policy and hike short-term lending and borrowing rates by 25 basis points each in the next quarterly review later this month," according to an economist. The RBI will conduct its mid-quarterly policy review on 17th March.

The RBI has hiked short-term rates seven times since March 2010 to contain inflationary pressure.


Only 50% of equity funds with 5-year record have outperformed their benchmarks

At least 20% of the 121 funds made only single digit gains—worse than FDs, but for the tax advantage enjoyed by equity funds. This underscores the need to buy the right fund at the right time

As we enter the financial year 2011-12, it's a perfect time to take a hard look at your mutual fund holdings. While mutual funds are a great financial product for creating long-term wealth creation, it would be disastrous for you if you get stuck with a wrong scheme. The generalised saying that "mutual funds are a good investment product" has no value if you make mistakes in what you choose, when you buy, and when you sell.

One way of getting a fix on what to buy is fund performance over a long period of time. Moneylife has done an analysis of funds which have completed five years since inception. That means that the fund with the shortest duration is in existence from 2006. The Sensex was 10,802 around mid-March 2006 and it is now at around 18,440 in mid-March 2011. Thus it has risen by 11%, compounded in the last five years. These five years have been topsy-turvy.There has been a sharp rally, a huge decline and then a sharp rebound again.

Funds with an even longer duration than five years have gone through multiple cycles. They have gone through a number of bear, bull, volatile and stagnant cycles. They have had ample time to choose the correct stocks and show their performance over a long period. So let's look at the performance of 121 equity schemes, which have been around for five years and more.

These funds on an average fetched 17% returns. But averages can be deceptive. Out of 121 equity growth schemes, only 50% (that is 62) have outperformed their benchmarks; 52 schemes have underperformed; and 7 have just managed to equal their benchmark returns.

The top performing three schemes are Reliance Growth, HDFC Equity Fund and Sundaram Select Midcap. Reliance Growth was up by 28% while the other two fetched returns of 23% and 36% respectively. There is no trend among the top performers. So how should you interpret the data? Look for steady performers. Also look for fund houses that throw a lot of good performers year after year.  

For instance, among the outperformers there were six funds from HDFC Mutual Fund- HDFC Capital Builder Fund - Growth, HDFC Core & Satellite Fund - Growth, HDFC Equity Fund -Growth, HDFC Growth Fund-Growth, HDFC Premier Multi-Cap Fund - Growth, HDFC Top 200-Growth, with an average return of 21%. These funds have beaten their benchmarks by 7% on an average.

 If HDFC was the best fund house, UTI and JM funds drained out investors' wealth. Among the 20 worst performers UTI and JM had 4 each. JM funds have underperformed their benchmark by 14% on an average. These include JM Basic Fund (1%), JM Emerging Leaders Fund-Growth (-7%), JM Large Cap Fund-Growth (9%), JM Mid Cap Fund-Growth (12%).

Whereas for UTI, its funds have underperformed their benchmarks by 11% on an average. These include UTI Equity Fund-Growth (9%), UTI MasterShare-Growth (7%), UTI Top 100 Fund-Growth (6%), and UTI Variable Investment Scheme-Growth (6%).  All these funds are more than five years in existence.

Among the other 20 worst performers are Franklin India Smaller Companies Fund-Growth (6%), SBI Magnum Bluechip Fund-Growth (6%), L&T Multi Cap Fund-Growth (9%), Tata Midcap Fund-Growth (8%), SBI Magnum Equity Fund-Growth (7%), Taurus Discovery Fund-Growth (4%), HSBC Progressive Themes Fund-Growth (1%) and L&T Global Advantage Fund-Growth (-1%).

Disclaimer: All our mutual fund analysis is based on the data purchased from Mutual Funds India database, controlled by rating agency Moody's of US. While the analysis is our own we cannot guarantee the that Mutual Funds India has reported the data correctly.




paul dmello

6 years ago

You have said hdfc is the best mutual fund manager but i have insvested since august 2010 and as of now i have lost wquite a few thousands since then in hdfc tope 200/hdfc equitee


6 years ago

Please do share the detailed analysis report or the web link where available - thanks.

bharat shah

6 years ago

wish moneylife do research on 5 years' or more old diversified mutual fund schemes for minimum turnover over a period, and given optimum return, so that the investor could know who is investing in businesses, and not in price.


6 years ago

I would like to know, how one can write at Moneylife. i.e. an Article.


6 years ago

great eye-opener for our distributor community. we always try to advise good fund to the investor but the key is regular review. we must stress this need to the investor also. very good work. thanks.

Pankaaj Maalde

6 years ago

Performance of most of the LIC MF 's schemes is also pathetic. There is no reference to this. request you to give details of all the schemes.

K B Patil

6 years ago

I agree with a reader's comment about HDFC. In 2009, I invested in HDFC Equity Fund through Kotak Securities. When I received a statement from HDFC, the address of the investor was totally wrong i.e not my address but something totally different. On sending several emails to HDFC and calls, I got only stereotyped replies that I must take up the matter with Kotak Securities since it has come through them. So, for a routine matter like address correction, I had to struggle for a month.



In Reply to K B Patil 6 years ago

A few years ago, when investors purchased through online sites like kotak, the Mutual Fund got only the addresses from the online distributors who were responsible for the address. Now sebi has changed this and you can go directly to the fund for address corrections

R Balakrishnan

6 years ago

This is brilliant. Globally less than ten percent of fund managers beat their benchmarks. We should be delighted that nearly half the fund managers outperform their benchmarks.


Debashis Basu

In Reply to R Balakrishnan 6 years ago

In a bull market...
Lets see what they do now.
Well, read our story today about the early MFs that's coming up in about 2 hours on this site


6 years ago

wt about the HDFC tax saving plan & HDFC long term advantage fund??


Prakash Hebalkar

6 years ago

Why don't you give the full chart so we can all spot our wins and our mistakes! BTW choice of an appropriate benchmark is often a problem as there are more investment ideas than benchmarks, especially with sector funds or internationally focused funds.


6 years ago

I am a distributor of almost all AMCs since last 7 years. Most unfriendly, most unresponsive, in a personal touch manner caring for their problems & trying to sort out the queries, is HDFC. This expression is a result of personal experience especially over last 1-2 years since automation has been overused e.g. there is only one toll free no, one common board phone no for head office, all branches, one common email for investor/distributor and the chief investor grievance redressal officer. The email is auto replied with an assurance for a reply within 2-4 working days. The email reply may come in time but the contents will NOT do full justice to the query.There will NEVER be a personal call to the investor/distributor to solve the issues at hand. They are willing to spend on courier STANDARD FORMAT letters but NOT willing to talk or make client/distributor understand the problems & result in timely solutions.


Debashis Basu

In Reply to endee 6 years ago

thanks very much for sharing this information.


In Reply to Debashis Basu 6 years ago

Thanks Debashis.
I request for an appointment with you for about 10 minutes between 3-4 pm or after the Seminar, on 22/3/2011 when I am coming to Moneylife Foundation Seminar. Pl confirm. Tks in advance.


In Reply to endee 6 years ago

i had thought that the hdfc amc was one of the best! then who is better?


In Reply to mary 6 years ago

There is none the best for 2-3 years or more and may remain so , also in the future. But DSP, Fidelity, Birla, DWS, Sundaram etc have fared better at some point of time.But the main thing is A SCHEME from an AMC which GIVES SUPERIOR RETURNS on a risk/returns parameter. One MUST continuously keep monitoring every 3-6 months & modify one's portfolio, based on the conclusions / performance then taken.


6 years ago

Please compare gold price, select mutual funds, fixed deposits. Your article though informative is not comprehensive


6 years ago


very informative analysis.
but where is the complete list?

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