As the first step towards carrying the torch of financial literacy to the rest of the country, Moneylife Foundation held an interactive seminar in Pune on Saturday
Pune, 14 August, 2010: Moneylife Foundation has taken significant strides forward since its launch in February this year. Within a period of just six months, the foundation has received an overwhelming response from the public, with more than 2,700 members already registered. However, much more needs to be done, especially in the light of the dismal health of the retail investor population in India.
Notwithstanding the government's claims to the contrary, India's investor population has fallen to 80 lakh from 2 crore over the past two years. According to CMIE, even mutual fund investment is restricted to just 20 lakh households. This only drives us in our efforts to spread further the message of financial literacy and awareness. We are looking to enrol 10,000 members by the end of this fiscal year in our bid to spread advocacy for the masses.
As the first step towards carrying this torch of financial literacy to the rest of the country, Moneylife Foundation on Saturday held an interactive seminar in Pune.Mr Debashis Basu, Editor of Moneylife and Ms Sucheta Dalal, Managing Editor of Moneylife held an interactive working session on finance titled 'How to be safe and smart with money'. Ms Dalal spoke on how to avoid losses by staying away from certain kinds of investments like chain marketing and pyramid schemes. She explained how these scamsters operate and advised investors to stay away from such frauds.
She also spoke about the implications of credit card transactions and the implications of default and its impact on an individual's credit history and ability to borrow. Mr Basu told people that investment does not have to be difficult and complicated if one was clear about the basic objectives, avoided obvious pitfalls and followed a sensible and consistent investment policy. "Many a times, investors are lured by fast and big returns and opt out for short-term investment. To avoid such risks, investors should think about the long term and fix goals accordingly," said Mr Basu. He showed how one could keep things simple, avoid complications and make steady returns without becoming an expert on markets.
This workshop was followed by another interesting seminar organised with the help of Karvy Mutual Fund Services and Computer Age Management Services (CAMS), India's top two registrar & transfer agents (RTAs). The two have got together to develop and offer some amazing online free tools that permit investors to access details of their mutual fund holdings and to track their entire portfolio.
Moneylife Foundation, along with Axis Mutual Fund, introduced these tools through presentations by senior executives of CAMS & Karvy.
As Prabal Nag, Vice President (business development) at CAMS, pointed out, the two RTAs have gone well beyond what is required of them in terms of facilitating and making the entire process of investing a more pleasant and easy experience. He urged investors to take advantage of the website services. These easy-to-use tools only require investors to register their email address with each mutual fund folio, which in turn, helps them access their account by creating a one-time password. Once in, an investor can get a consolidated view of his/her mutual fund investments, across different funds, fund houses or distributors, with information about returns, dividends, switches, etc; and generate transaction statements and update information across folios through a PAN-based service.
Apart from demonstrating the online tools, executives of CAMS and KARVY gave the audience some useful tips on how to ensure that the entire process is smooth and easy. They also mentioned the dos and don'ts to keep in mind while investing in mutual funds.
Anand Varadarajan, Head, Business Development of Karvy for Investor Relations Business spoke at length about the automation brought in by RTAs and its relevance for the investors.
Manesh Thakur (Vice President & Zonal Manager - West & East) Axis Mutual Fund, spoke about various issues facing the industry at large.
Investor feedback on the tools demonstrated was extremely positive; they said it freed them from the drudgery of tracking various account statements and calling mutual fund help-lines to inquire about statements from one of the 35-odd asset management companies. Now you can get all the information you want at the click of a button, 24x7. "You can actually get a combined account statement of all your investments across all funds served by the three R&TAs - Karvy, CAMS and Franklin Templeton," pointed out Mr Nag. Malati Majumdar, General Manager-Customer Relations at CAMS, made a detailed presentation of the various tools offered by the registrar through a live demonstration.
The market started the week with modest gains despite a high degree of volatility. Selling pressure ahead of the US Federal Open Market Committee (FOMC) meeting resulted in a flat closing for the domestic market with a negative bias on Tuesday. Assertion by the Federal Reserve that it would take more steps to boost the sagging American economy did not go well with investors and indices ended in negative terrain. The market witnessed lacklustre trading for the remaining two days of the week. For the week ended 13th August, the Sensex and the Nifty settled flat with a positive bias, up 23 and 12 points respectively.
The top Sensex performers on a weekly basis were Tata Motors (up 14%), State Bank of India (SBI) (up 9%), Jindal Steel & Power (up 6%), DLF (up 5%) and Hindustan Unilever (HUL) (up 4%). The top laggards of the index were Sterlite Industries (down 9%), Wipro (down 4%), Mahindra & Mahindra, Infosys Technologies and Reliance Communications (RCom) (down 3% each).
The top gainers in the sectoral space on the BSE were Realty (up 7%), Consumer Durables (CD) (up 4%) and Bankex (up 3%). The top sectoral losers were IT and TECk (down 2% each) and Healthcare (HC) (down 1%).
Snapping an eight-month trend of double-digit rise, industrial growth slid to 7.1% in June from 8.3% a year ago. The lower growth rate has been attributed to the high base rate effect.
However, despite a single-digit growth in the month, factory output expanded by 11.6% in the first quarter from 3.9% a year ago. Industrial growth figures for May were revised downwards to 11.35% from 11.50% estimated earlier.
The decline in industrial expansion will further increase the Reserve Bank of India's (RBI) dilemma on rate hikes to check inflation, experts said.
After being in single-digits for two weeks, food inflation shot up again to double-digits at 11.40% for the week ended 31st July as prices of cereals, milk and fruit went up.
Food inflation, which was 9.53% for the week ended 24th July, had remained in single-digits for a fortnight before bouncing back. Food inflation, which was over 20% in December 2009, slipped to single-digits in the third week of July.
The overall inflation, which includes change in prices of manufactured goods, was 10.55% during June.
Domestic passenger car sales jumped by 37.95% to 1,58,764 units in July compared to 1,15,084 units in the same month last year. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in the country grew by 30.09% to 7,10,621 units during the month under review from 5,46,233 units in the same month last year. Total two-wheeler sales in July increased 30.41% to 9,38,514 units from 7,19,656 units in July 2009.
Total sales of vehicles across categories registered a growth of 31.50% to 12,37,461 units in July against 9,41,070 units in the same month last year, the industry body added.
The FOMC on Tuesday said that it would take more steps to boost the sagging US economy. Besides, the Fed left the overnight interbank lending rate target in a range of zero to 0.25%, where it has been since December 2008, and repeated a pledge to keep rates low "for an extended period."
The Reserve Bank of India (RBI) has brought out a discussion paper on giving out new banking licenses to business houses and non-banking financial companies (NBFCs), and regulations for the same to foster greater competition.
The central bank also sought to know "whether industrial and business houses could be allowed to promote banks." It also posed the question whether NBFCs should be allowed to convert into or promote banks. The central bank sought feedback on these issues along with the business model for new banks by 30th September.
Currently, India has 27 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks, four local area banks, 1,721 urban co-operative banks, 31 state cooperative banks, and 371 district central co-operative banks.
On the corporate front, Scottish oil explorer Cairn Energy Plc said that it is in talks to sell part of its stake in its Indian unit, Cairn India, which owns the massive Rajasthan oilfields. Though Cairn Energy did not identify the suitor, speculation is rife that it could be India-focused miner Vedanta Resources Plc.
Indian auto and farm equipment major Mahindra & Mahindra (M&M) has been selected as a preferred bidder for South Korea's Ssangyong Motor Company (SMC) in a deal valued at up to $500 million. The preferred bidder status would require M&M to enter into a memorandum of understanding (MoU) with SMC, followed by a detailed due diligence process.
M&M said it would sign the MoU with Ssangyong in the next two weeks, followed by due diligence in September and a definitive agreement by November. The bid price is to be announced when the MoU is signed.
New Delhi: Finance minister Pranab Mukherjee will meet chiefs of public sector banks here tomorrow, at a time when industrial growth has decelerated to a 13-month low of 7.1% and interest rates have moved northward, reports PTI.
The finance minister will also take stock of the financial performance of the banks and their projections for the current year, sources said.
At the same time, the meeting is expected to discuss the impact of rising benchmark prime lending rates (BPLRs), which will affect auto, home and education loan costs for existing borrowers.
Lenders like Punjab National Bank, Bank of Baroda, Oriental Bank of Commerce, Corporation Bank and IDBI have hiked BPLRs following the RBI move to raise key short-term borrowing and lending rate by 50 and 25 basis points, respectively.
Since July, the system of BPLR has been replaced by a base rate, which is a floor for lending rates. However, existing customers are linked to BPLR unless they decide to switch over to the base rate system.
Mr Mukherjee will also dwell upon credit flow to productive sectors as well as to priority sector, sources said.
The meeting takes place at a time when most of state-owned banks have announced their first quarter results.
The agenda of the meeting also includes review of credit growth, including to the agriculture and infrastructure sectors, sources said.
Among others, capital adequacy over the medium-term and housing and education loans would also be taken up in the meeting, sources said, adding that even the capital infusion by the government to banks could be discussed.
One of the key points of discussion in the meeting would be financial inclusion to provide appropriate banking facilities to habitations having a population above 2,000 by March, 2012.
It is to be noted that the finance minister had a meeting with bankers and chief ministers of four regions. The fourth and last in the series of regional meetings held by Mr Mukherjee was on 20th July.