Citizens' Issues
Moneylife Foundation submits memorandum to BEST, CM appealing to start air shuttle for Mumbai Airport

Transport experts handed over the memorandum to the BEST to start an air-conditioned public bus service for the Mumbai airport, who has called a meeting on 24th October with its transport department

Moneylife had campaigned to start a dedicated public bus transport with adequate luggage space to the Mumbai Airport. Moneylife Foundation, a not-for-profit organisation, drafted a memorandum with the help of experts on transportation, who unanimously supported the idea of starting an air-conditioned public bus service on priority basis.

Today, the memorandum was submitted to Sunil Shinde, chairman of BEST (Brihanmumbai Electric Supply & Transport) and to the office of BEST’s general manager OP Gupta. The meeting was attended by transport experts Sudhir Badami and Ashok Datar, who played a key role in drafting the memorandum. The same memorandum has also been sent to the chief minister of Maharashtra, Prithviraj Chavan.

“We had a detailed deliberation and brain storming session on the viability of starting such project. Mr Shinde took keen interest in understanding the memorandum,” says Mr Badami.

The BEST chairman has also called a meeting on 24th October with its transport department to the work on the fine details of starting such dedicated service. Another presentation will be given to BEST on that day.

Mumbai is the only major city in the world and within India that does have such service even as Bengaluru, Hyderabad and Kolkata successfully run such service. Experts say that starting such service is a ‘doable’ project. This is mainly because the project would be of small size and the target audience is clearly identified.
Considering the issue of traffic congestion and frequent strikes by auto rickshaw drivers, such a service would be efficient from the usability point of view.




5 years ago

Brilliant, thanks, and hope this provides regular scheduled connectivity to Bombay central, CST/VT, Dadar TT, Panvel, nariman point, vashi Market, and points en route. Another set to the northern suburbs,thane, Pune.

Quite by chance I was attending a UNEP MoUD IIT IIM type seminar workshops on carbon reduction and much was being made of the role of JNNURM sponsored buses in this context.

Please place a copy of the letter and correspondence with BEST in open domain and maybe an RTI in Delhi to MoUD and MoT would prod things.

Humbly submitted/vm

Deepak R Khemani

5 years ago

Way to go MDT, keep up the good work.

IndusInd Bank Q2 net profit up by 45% to Rs193.09 crore

IndusInd Bank had recorded a net profit of Rs133.15 crore in the corresponding quarter last fiscal

Private sector lender IndusInd Bank today posted 45.1% increase in net profit at Rs193.09 crore for this fiscal's second quarter ended 30 September 2011.

The bank had recorded a net profit of Rs133.15 crore in the corresponding quarter last fiscal, IndusInd Bank said in a filing to the Bombay Stock Exchange.
The total income of the lender also increased to Rs1,563.07 crore during the quarter from Rs1,029.20 crore over the corresponding period last year.

During the first half of 2011-12, the bank clocked 48 per cent rise in net profit to Rs373.27 crore, compared to Rs251.70 crore in the same period a year ago.
The bank reported a total income of Rs2,943.05 crore in the first six months, compared to Rs1,961.69 crore in the previous financial year.

The shares of IndusInd Bank were down 0.24% at Rs269.25, from the previous close on the BSE, which has been in the red throughout the day.


Fund managers lose investors’ money in RIL stock as part of a “strategy”

A total of 57 of the 100 largest equity schemes have Reliance Industries as a top 10 holding. Not because RIL has been a great stock, but because it is a Sensex and Nifty heavyweight. Funds don’t want to stray too far away from the benchmarks!

In 2007, when I was interviewing a low-profile but reasonably good fund manager, he gave me a rare peek into the core investing process followed by fund houses. “When the money comes into the fund, we quickly allocate the bulk of it according to the stocks in the benchmark we have chosen.” He added with a smile, ”We don’t want our performance to lag the benchmark.” What this means is that if the scheme has the Sensex as the benchmark, the fund would allocate most of the money according to Sensex heavyweights— usually in the same weights as the stocks have in the index. Therefore, investing a substantial amount of money in index heavyweights is part of a “strategy”—even if this means that these index heavyweights may not be the best of picks at that particular time.

This is exactly why Reliance, which has been grossly underperforming for over two years since June 2009, is a top 10 holding of more than 100 fund schemes among a total of 230-odd equity schemes and 57 of the 100 largest schemes. The stock was at Rs1,140 at the end of May 2009, after rising from a low of Rs560 in March to over Rs1,200 in mid-May following the big upmove after the general elections. From that point onwards, RIL has wilted, belying its size, profile and new initiatives, to fall to Rs713 in August 2011. In the process it grossly underperformed the Sensex as its retail initiatives hit several roadblocks and the gas reserves turned out to be hard to exploit. Just how badly the stock has fallen can be judged from the fact that the Sensex was at just 9,700 when Reliance was Rs760 sometime in March-end 2009. When the Sensex was 15,700 at its low in August 2011, Reliance had hit Rs714. For the first time ever, Reliance had contributed nothing to a 60% Sensex growth over two years.

However, this continuous weakness in price, followed by weakness in fundamentals, has not been able to shake off the fund managers’ confidence in the stock.   

This is simply because mutual funds are primarily managed with an objective to “stay as close as possible to the benchmark.” As a mutual fund salesperson told me once: losing money is not a big issue in the mutual fund industry—after all it is a function of market prices. But what is really a big issue is grossly underperforming the benchmark.” One way not to underperform the benchmark is to be substantially invested in benchmark heavyweights. This “strategy” has cost fund investors dearly.

In November 2010, when the market was at its peak and Reliance was at around Rs1,150, as many as 25 funds of the largest 50 had more than 5% of their portfolio in RIL, controlled by Mukesh Ambani. By this time, all of RIL’s fundamental troubles and gross underperformance of the stock were clear. All major funds houses like Birla, Fidelity, Franklin, ICICI, HDFC, SBI, UTI and even Reliance Mutual Fund (controlled by Mukesh Ambani’s estranged brother Anil Ambani) were heavily invested in Reliance Industries in most of their schemes. The lone exception was DSP BlackRock. The number of large funds which had Reliance as a top 5% holding swelled to 33 by September, when the stock had fallen off the cliff.

Indeed, when checked at three different dates (November 2010, April 2011 and September 2011), the schemes which had more than 5% in Reliance Industries had not changed much. They simply preferred to inflict massive losses on their investors and stay with this heavyweight. If dozens of top funds all keep holding a stock that has fallen by 40% or more from the peak and has continuously underperformed the index massively, it can only mean deep collective wisdom across all fund houses about the future returns from the stock. Or, it could mean active investing of the worst kind, because it is really amounts to closet passive investing.



Nagesh Kini FCA

5 years ago

The so- called "investment strategies" and "losing money in the mutual fund industry", my left foot.
These guys seem to be playing about with peoples' hard earned monies. They simply shouldn't indulge in speculations plain and simple.
I got rid off my RIL holdings that I had acquired during the year, after collecting the 2011 dividends. I advise others to do it before it goes down any further.
Right thru the beginning as a conservative auditor I'm scared about "Dhirubhai method of Accounting", esp. Interest Capitalization and other subtle Creative Accounting tricks that his Auditors seem to go along with..


Sachin Purohit

In Reply to Nagesh Kini FCA 5 years ago

Reliance (both versions included) is a semi-ponzi scheme


5 years ago

Such actions by the Fund managers make investing in Index Funds seem a better option-at least what you see is what you get!

Narendra Doshi

5 years ago

Dear Debashis,
You are perfect on dot in your analysis. The last sentence IS THE TRUTH - PASSIVE INVESTING in a scheme where the fund manager ought to do just the opposite and ensure consistent, continuous positive returns.

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