PNB Metlife has returned Rs25,000 to the correct policyholder to make up for their error in earlier refund to wrong policyholder, following an article in Moneylife on 2nd May.
On 2nd May Moneylife had put out article about a PNB Metlife policyholder who was given a run around for Rs25,000 that it collected through its flawed online premium payment system. Ms Asha Kapoor (name changed) had approached Moneylife insurance helpline seeking help to get her money back, which PNB Metlife, surprisingly had given to some other policyholder. The system has no check of the entered data of policy number, date of birth, mobile number and email address and so the payment of Ms Kapoor was applied to a wrong policy number due to a typo with one digit switched (e.g. policy number 37012645 instead of 37012654).
Following our article, Ms Kapoor got a call and an email from head – grievance redressal team of PNB Metlife the next day (3rd May). According to Ms Kapoor, “He said in his conversation that he was sorry about the whole thing and that PNB MetLife would be looking into the lacunae in their system. They promised to deposit Rs25,000 into my PNB MetLife account within 3-4 days as premium paid for 2012-13 (original payment was done in Jun 2012 ).” The premium amount of Rs25,000 was deposited into Ms Kapoor’s account on 6th May morning.
Moneylife had written to PNB Metlife on 25th April and 30th April and a call was made on 26th April, but there was no response. PNB Metlife was probably waiting to see if we really write about it and may be hoping that the issue gets sidelined.
Customers would now look forward to an improvement in PNB Metlife’s online premium payment system. In fact, we wonder why PNB Metlife online premium payment system even asks for the date of birth, email and mobile number when it is not cross-checked with the policy number for which the payment is made. It is not just the absence of cross-check of policy number to date of birth, mobile number and email address. The system accepts payment to even non-existent policy number. In short, you can even pay for a junk policy number.
PNB Metlife has recently launched TV ads that proclaim to “Be Double Sure” in life. A bank customer who receives money from the cashier does the counting of the money, when the cashier is counting and counts it again after receiving the money. The punch line is that “Paisa ho ya life insurance, hamesha double sure hona hi accha hain. Punjab National Bank and Metlife ne milke banaya PNB Metlife. Hua na double sure.” We certainly hope PNB Metlife can live up to same standard for their online premium payment system to make it “Double Sure” for a policyholder who may make an error in keying a long number. A policyholder may key in incorrect policy number, but he or she is unlikely to make mistakes with their own date of birth, mobile and email address. There is the need to cross-check all the entered data.
While imposing the cost, the apex court also rapped state governments for taking its directions 'very lightly' and filing affidavits as per their convenience
The Supreme Court on Monday imposed an exemplary cost of Rs5 lakh on Maharashtra government for delay in filing its affidavit relating to compliance of the apex court's directions on police reforms and constituting State Security Commission(SSC).
A bench comprising justices GS Singhvi, Ranjana Prakash Desai and Sharad Arvind Bobde said, "Maharashtra government filed the affidavit on Monday and its counsel has given different explanation and submission for delay in filing the affidavit and non-compliance of its directions by bureaucrats. For this delay in filing affidavit, we are imposing a cost of Rs5 lakh".
The apex court also said some of the state governments are taking its directions 'very lightly' and it has now become a habit for them to file affidavits late.
It said there was a direction for Chief Secretaries of Rajasthan, Haryana, Uttar Pradesh, Andhra Pradesh, Maharashtra and Goa to file affidavits by 3rd May in this matter.
The Supreme Court also made it clear that it was not for state governments to extend the time of filing affidavits suo motu.
Bubbles happen all the time in frontier markets. The index in Ghana is up 50% in four months. Assuming you wanted to take the risk, what are the safest investment vehicles and do their returns really represent the mouth-watering headline numbers?
While I was waiting for my interview on a radio program, I overheard the interview of the guest before me. I assume that he was from some sort of sell side firm, because he was touting the benefits of investing in frontier markets. From my viewpoint this was silly.
Frontier markets are volatile, divorced from fundamentals, lack supervision and corporate governance. If you want to invest in the growth of frontier markets there are much better ways to do it. But, I started to questions my convictions. I had just read another article about some small market showing increases of 50%. In this case, it was the Ghana Stock Exchange.
The GSE-Composite Index (GSE-CI) has now risen 50% since the start of the year. I believe that this rise is one of the unintended consequences of central banks’ monetary policy rather than a reflection of fundamental growth. Still someone made money.
So rather than just look at the risks, I asked myself a different question. These bubbles happen all the time in these small markets. Assuming you wanted to take the risk, how could you invest? What are the safest investment vehicles and do their returns really represent the mouth-watering headline numbers?
I started with a website sponsored by CNN This had a graphic that allowed you to point at various markets to determine their gains. One of the best performing markets was not a developed country at all, but Japan. Again, the promise of unlimited free money forever resulted in a 46% increase in the Nikkei 225 since the beginning of the year. The increase might be great for the Japanese, but for others might not so much. The reason has to do with the yen. The actions of the Japanese central bank have debased the yen. An investment in dollars would not have been so successful. A popular ETF, iShares MSCI Japan Index (EWJ), quoted in dollars has risen but only by 16%.
The next best performing stock market was that of the United Arab Emirates (UAE). Its market increased by 28%. The problem with investing in the UAE is that to match the market you would have to physically own all of its components. There is a similar problem with other frontier markets. There are not any ETFs that represent the particular country’s market. However, there are ETFs that do invest a region, which includes the target country’s market.
The closest one for the UAE is the DFM General Market Vectors Gulf States Index ETF (MES).
Fortunately, there is another Gulf States market that has performed very well this year. The Kuwait market has risen 23%. MES does have holdings in both the UAE and Kuwait, but it has not performed anywhere near as well as either market. This year it went from $20.58 to $23.76. This is only 16% increase. The ETF is also tiny. Its capitalization is only $11 million shares. Its average trading volume is only 2,700 a day. Therefore, a block trade could move the market, at least temporarily. The ETF trades in a very tight range. In October 2009, it was trading at $23.91 just a bit lower than it is today. So, the idea that these markets are good diversifications for term investors is not true.
In contrast to the Gulf States markets, is one of the recent stars of the Frontier markets: the Philippines. It stock market has risen from 5,860 to 7,070 in this year alone, a rise of 20%. Since last April, it has risen 35%. Investing in the Philippines is easier than investing in the Gulf. It does have a dedicated ETF: MSCI Philippines Investable Market Index Fund (EPHE). Even better EPHE has tended to match the performance of the index. It has risen almost 20% this year. Since last April, it did even better than the index returning a 41% gain. It has a large capitalization of $414 million and good volume. It trades an average of 370,000 shares a day.
EPHE also represents some of the problems with these markets and these investments. These markets, even large emerging markets like Brazil, Russia and China tend to be very concentrated in a few companies. For example in the Brazilian market, the top five companies make up 48% of the total market value. On the Russian market, the top five make up about 45% of the market and in China, the top 5 make up about 30% of the market. The markets are not only concentrated by companies, they are concentrated by sectors. Russia’s market is dominated by commodities companies. China is more like most frontier markets. It is dominated by financial companies. EPHE is like China, 40% of its holdings are financial with 10% in telecommunications.
Like the Gulf States, three other of the best performing markets are not represented by ETFs: Argentina, Nigeria, Kenya and Botswana. Each of these markets did well this year: Argentina 27%, Nigeria 19%, Kenya 15% and Botswana 16%. However, if you want to invest in Africa there are only two ETFs SPDR S&P Emerging Middle East & Africa (GAF) and Market Vectors Africa Index ETF (AFK). Both of these ETFs lost money since the beginning of the year.
Two contrasting markets are Vietnam and Indonesia. Both markets have gone up this year by about the same amount: Vietnam by 13% and Indonesia by 14%. Their ETFs have not. Both ETFs are very similar. They both have a capitalization of about $450 million. There is a large difference in performance. The Indonesia ETF has increased by 13% this year exactly reflecting the increase in the Indonesia index, while the Vietnam ETF has increased by only 4.8% a fraction of the index.
Cashing in on the headline numbers is a bit of a challenge. It is possible in some markets, while others should simply be avoided. The one thing that is consistent in analysing these investment vehicles is that like anything else, they entail risk often quite a lot. Growth in developing countries is far from a one-way bet. Right now, some of the free money from Japan will probably leak into countries like the Philippines and Indonesia, which might make them attractive investments assuming you trust central bankers will continue the largest economic experiment in history.
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages.)