Moneylife Events
Money Life of management students
Moneylife Foundation conducted a financial literacy seminar for the management students of NL Dalmia College
 
It is ironic that there is little in management education that can prepare you for the intricacies and the realities of managing your money. Before students go out to join the corporate world, it is important for them to have a good understanding of what it takes to protect their money and invest smartly. 
 
Moneylife Foundation has conducted many such events in the past for students. This time the Foundation conducted a special programme for the students of NL Dalmia College, Mumbai. 
 
The first session was conducted by Sucheta Dalal, managing editor of Moneylife and founder trustee of Moneylife Foundation. She focussed on how students can avoid financial mistakes and falling prey to scammers. The second session was addressed by Debashis Basu, editor and founder trustee of Moneylife Foundation. Students do not only need to protect their money, they need to invest it wisely to beat inflation and fund their future goals. Mr Basu spoke on the pros and cons of different investment vehicles through which they create wealth.
 
The numbers of scams reported are infinite. In her session, Ms Dalal discussed that one should keep one’s financial life simple and one should invest in just a few products—products that are safe and well regulated. Ms Dalal spoke about the dubious schemes like QNET, Pearls, City Limouzine, Japan Life, which could be clubbed to category called Pyramid scheme or chain money schemes. These schemes claim to provide extremely high returns luring the unsuspecting savers and then vanish into thin air. Many have lost huge amounts of money in such schemes.
 
The six mantras, articulated by Ms Dalal, include - not to lose money, insure for securing future, avoid credit and investment traps, focus on few safe products, avoid emotional traps and maintain financial hygiene. Ms Dalal explained credit history, credit score and reports which are becoming increasingly important. She said, all your borrowings and repayments for credit card, student or education loan and other loans, are tracked by credit information companies, like CIBIL, Experian, CRIF Highmark and Equifax. 
 
In the second session Mr Basu explained the importance of saving regularly to secure one’s future financially. He took the students through different life stages and the common financial goals at each stage in life. It is important to plan in advance for such goals. Everybody can make financial decisions, he said if they stick to some simple principles.
 
He explained the principles of compounding under different scenarios. The effect of compounding is slow in the initial periods, but as time passes on, the power of compounding takes over and the wealth created is huge. The key rule is to save as much as possible and as early as possible in good financial products. Many students look to earn a good income when they start work. Mr Basu highlighted that savings has little to do with income. It is more important to spend smartly.  
 
Where does one invest? While not going in to detail on the various investment products available, Mr Basu gave the suggestion of just a few products that should do the job. As college students have time on their side, he advised them to invest in equity mutual funds and stocks with an investment horizon of 15 years or more.
 

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COMMENTS

Agyat Vyakti

9 months ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Banking system is under serious pressure on both NPAs and capital
According to CARE Ratings, the risks to the banking sector increased since the publication of the previous Financial Stability Report, mainly on account of deteriorating asset quality, lower soundness and sluggish profitability, says the RBI in its latest FSR
 
The performance of the Indian banking sector remained subdued as it experienced a slowdown in balance sheet growth in 2014-15, according to the Financial Stability Report from RBI (Reserve Bank of India). While the PSBs (public sector banks) registered deceleration in credit growth, the private sector banks (PVBs) and foreign banks (FBs) showed higher credit growth. Retail loan portfolio of the banks continued to grow at around 20% during 2014-15. Reflecting the overall trend, credit growth to priority sector also declined during 2014-15. The return on assets (RoA), a common indicator of financial viability, did not show any improvement in 2014-15.  While the PSBs accounted for 72 per cent of total banking sector assets, they accounted for only 42% in total profits during 2014-15, with the PVBs surpassing the PSBs in the share of total banking sector profits. The deterioration in the asset quality of banks in general, and PSBs in particular, continued during the year.
 
While the first Fed rate hike since 2006 appeared to have been factored in by the markets, the pace of further increase may have a significant bearing on market behaviour, forecasts the RBI report. This along with the developments in China and sluggish global trade growth would define the global economy going forward. While India’s macro-economic fundamentals are relatively stronger, domestic demand and private investment are still not picking up, underscoring the need to step up public investments. Although India’s current account balance has benefitted from the fall in international crude prices and reduction in gold imports, exports have been adversely affected due to weak external demand.  While the ratio of short term external debt to forex reserves has been moderating, attracting robust capital flows to finance the current account deficit will require continuous thrust on structural reforms an improving the ease of doing business. In the corporate sector, declining profitability, high leverage and low debt servicing capacity continue to cause concern with their attendant adverse impact on the financial sector, notwithstanding a marginal improvement observed during the first half of current financial year.
 
CARE Ratings in its analysis of the RBI report points out that the banking system is definitely under pressure on both NPAs and capital with PSBs being particularly affected. Resolution of NPAs will depend on how we address issues through the bankruptcy code. A change in the growth trajectory of the economy should help to alleviate the situation. Banks will become more wary of lending given these pressures. Companies may have to go to the corporate debt market for funds to finance large investments. We need to have more structural reforms to get the economy on track again. The remark on PSBs dividend policy is significant as this also affects the government in terms of non-tax revenue it earns. The profits should be used for addressing NPAs.
 
While steps taken for developing corporate debt markets in India are showing some results, the dependence on bank finance continues even as the banks, especially the PSBs face challenges on asset quality, profitability and capital. In addition to the improvement of governance processes through initiatives like ‘Indradhanush’, the PSBs may need to review their business models, and examine strategic decisions like capital structure and dividend policy, points out the RBI report.

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Further rally in Nifty, Sensex to depend on global clues – Wednesday closing report
Nifty will remain bullish as long its stays above 7,780
 
We had mentioned in Tuesday’s closing report that the short Nifty, Sensex rally may have ended and that Nifty will turn bearish again, if it goes below 7,740. Due to optimism in global stock markets and improvement in the political situation in India, the major indices in the Indian stock markets closed in the green with gains of just over 1% over Tuesday’s close. However, the gains were with thin trades and low volumes. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
 
Positive global cues, coupled with the government's efforts to build consensus on the bankruptcy bill, cheered the Indian equity markets on Wednesday. Initially, the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers. Besides Asian markets, Tuesday's rally in the US stocks after a key macro-economic data indicated healthy growth in the world's largest economy cheered investors in India. In addition, government's efforts to build a consensus to pass the crucial bankruptcy bill restored investors' confidence. Furthermore, the bill has been referred to a joint parliamentary committee which will iron out any differences on the legislation before the budget session which is slated for February.
 
Bankers and insurers in different parts of the nation are gearing up for a long weekend, beginning December 24. Between December 24 and 27, branches of government-owned banks and insurance companies would remain shut due to festivals and weekly closures. Owing to Milad-un-Nabi and Christmas, Thursday and Friday will be holidays. Second and fourth Saturdays of a month are holidays for government-owned banks while it is a five-day week for government-owned insurance companies. In this context, the stock markets are unlikely to be overbought till Monday.
 
The US dollar fell against most major currencies on investors' profit-taking and negative housing data from USA. Total existing home sales fell considerably 10.5% in November, the slowest pace in 19 months, according to the National Association of Realtors Tuesday. Meanwhile, the US Commerce Department announced on Tuesday that the "third" estimate of real gross domestic product (GDP) increased at an annual rate of 2.0% in the third quarter of 2015, slightly down from the second estimate of 2.1%. A weaker dollar is likely to favour the bulls in emerging markets like India.
 
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minster Narendra Modi on Tuesday approved a Rs3,000 crore umbrella scheme for integrated development and management of fisheries. "The central sector scheme covers development and management of inland fisheries, aquaculture, marine fisheries including deep sea fishing, mariculture and all activities undertaken by the National Fisheries Development Board (NFDB)," said a cabinet communique. The scheme has six broad components: National Fisheries Development Board (NFDB) and its activities; development of inland fisheries and aquaculture; development of marine fisheries, infrastructure and post-harvest operations; strengthening of database and geographical information system of the fisheries sector; institutional arrangement for fisheries sector; and monitoring, control and surveillance (MCS) and other need-based interventions. The umbrella scheme also provides linkages and convergence with the shipping ministry's Sagarmala Project, the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Rashtriya Krishi Vikas Yojana and the National Rural Livelihoods Mission. The government with favourable policy decisions is also encouraging the bulls in the stock markets.
 
The Cabinet Committee on Economic Affairs on Tuesday approved an investment of Rs5,000 crore to be made by public sector explorer ONGC into the equity share capital of its foreign arm ONGC Videsh. "The Cabinet Committee on Economic Affairs has given its approval for investment of Rs5,000 crore by Oil and Natural Gas Company Limited (ONGC) into the equity share capital of ONGC Videsh by conversion of existing loan of equivalent amount into equity," a cabinet communique said. The approved investment will strengthen the capital base of ONGC Videsh, the statement said. "It will enhance the ability of ONGC to undertake overseas exploration and production business, thereby improving the energy security of the country," it added. ONGC shares closed at Rs235.40, up 2.04% on the BSE.
 
Shares of Tata Steel gained 3% intraday on Wednesday after the company’s subsidiary entered fresh negotiations to sell long products division in Europe. The move will allow partial deleveraging of the balance sheet and enhance profitability. “Tata Steel UK, an indirect subsidiary company of Tata Steel Europe signed letter of intent with Greybull Capital to enter exclusive negotiations for the potential sale of its Long Products Europe business. The memorandum covers several UK-based assets including TS UK’s Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities,” a company statement said. Tata Steel shares closed at Rs263.70, up 2.53% on the BSE.
 
Shares of Sun Pharma continued to rally for a second day after it lost almost 7% on Monday following a warning letter by US Food and Drug Administration (FDA) on Halol manufacturing unit. The drug major rose on Wednesday after analysts found no serious compliance breach in the warning letter. On December 22, the USFDA made public the warning letter which states that inspection 483 mentioned 23 observations. Out of the 23 observations, 10 were related to the injectables facility, 4 were on the oral solids facility, 8 were related to quality control labs and 1 was on warehousing. In its letter, the drug regulator said that Sun Pharma failed to establish and follow appropriate written procedures and all lapses are examples of serious current good manufacturing practice (cGMP) violations. It also added that the company's responsibility to ensure third party audit includes full evaluation of systems, operations and procedures. Sun Pharma shares closed at Rs791.05, up 3.52% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
The closing values of the major Asian indices are given in the table below:
 

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