Steve Jobs

Steve Jobs, the visionary who transformed the worlds of personal computing, finally lost his years-long battle with pancreatic cancer.

Six years ago, Jobs had talked about how a sense of his mortality was a major driver behind that vision.

It truly takes real courage to swim against the current and smile even when you are writhing in pain.

"Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life," Jobs said during a Stanford commencement ceremony in 2005.

"Because almost everything -- all external expectations, all pride, all fear of embarrassment or failure -- these things just fall away in the face of death, leaving only what is truly important.”

"Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

Cash remittance from Gulf

Indians working abroad, particularly in the Gulf countries, are rushing to send money home to take. advantage of a depreciating rupee. In the last couple of months, inward remittances from Gulf countries have increased more than 30 per cent over the same period last year. At present, remittances from Gulf countries account for more than 30 per cent of the total money transfers to India. There were significant increases in NRI remittances from the Gulf region, Europe and Africa whereas those from North America and East Asia declined. For example, one could hardly get more than Rs 120 in exchange of one Oman rial. With the Indian rupee now trading at Rs 128 a rial, it means my family will get nearly 7 per cent more in rupee terms on the same amount of rial transfer. Remittances from the Gulf region have been steadily increasing since 2008-09. The trend has spiked since August after the rupee started weakening against the greenback. Remittances to India from Gulf countries have grown more than 30 per cent in the July-September quarter compared with the previous quarter.  Large-ticket money transfers have increased, particularly in the last couple of weeks. These people send money for investments rather than domestic commitments. According to money exchangers, the increase in the volume of money remitted has been more than the number of transactions, suggesting that high-income expatriates are taking advantage of the depreciating rupee. The UAE’s dirham and Kuwait’s dinar have all gained against the rupee. Banks in India such as the SBI, Bank of Baroda (BoB) and HSBC, which have money transfer network in these Gulf countries, are witnessing a heavy inflow of remittance.

Happy Durgapuja

                     Wish all the readers a Happy Durga Puja'2012. May the Holy mother bless all of us.

2G scare for Anil Ambani

Stock prices of the Anil Dhirubhai Ambani Group (ADAG) companies plumbed new depths on Friday after the Central Bureau of Investigation (CBI) said it was investigating the role of the group chairman in the 2G telecom scam.

The federal investigators spooked the markets even more after raising the prospect that three ADAG executives currently being held in Tihar jail could turn approvers in the case.

The Reliance Communications and Reliance Power (RPower) scrips hit new lows, falling 8 per cent to Rs 71.75 and 4 per cent to Rs 76.80, respectively, at Friday’s close on the Bombay Stock Exchange.

Reliance Capital, the group’s financial arm, dropped as much as 12 per cent to Rs 315.20, while Reliance Infrastructure fell 7 per cent to Rs 373.55 and Reliance Mediaworks by 6 per cent to Rs 90.95.

The 30-share Bombay Stock Exchange (BSE) Sensex fell 244 points to 16453 points on Friday.

ADAG stocks have been battered in the stock markets this year and have lost nearly half of their market capitalisation.

The Anil Ambani group scrambled to limit the damage. In a statement, the ADAG group denied its involvement in the 2G telecom scam but that did not stop investors from selling the stocks.

The statement said none of the ADAG companies, including Reliance Telecom, had illegally benefited from the sale of the 2G licences in 2008.

ADAG also denied that the three arrested executives — group managing director Gautam Doshi and senior vice-presidents Surendra Pipara and Hari Nair — had expressed any intention to turn app rovers.

“The CBI is now raising (these) new issues to oppose bail to the three Reliance executives,’ the statement said.

The three Reliance executives have been accused of breaking rules by using Swan Telecom as a front company to bag additional licences and spectrum from Reliance Telecom.

However, it was not all bad news for the Anil Ambani group on Friday.

The RBI gave its approval for RPower to raise $2.2 billion, or Rs 11,000 crore, from the US Exim Bank and Chinese banks that will go towards funding the company’s 3,960MW Sasan power project in Madhya Pradesh.

Fraud credit card of Kumar Mangalam Birla

Once again, a cloned credit card made its rounds in Bangalore shopping arcades. This time, the victim is none other than Kumar Mangalam Birla, Chairman of the $35-billion Aditya Birla Group.

Fraudsters cloned the Standard Chartered Platinum credit card of the high-profile industrialist and went on a six-day shopping spree — from September 15 to 20 — in malls across the city. They splurged Rs 2.86 lakh on jewellery and electronic gadgets. All this while, Birla was in Mumbai and the original credit card was with him.

A complaint was lodged at the Worli police station, Mumbai, September 24 by an executive of the Aditya Birla Group. The fraud came to light on September 23, when the bank sent a statement to Birla’s office detailing the credit card transactions made in Bangalore.

One of the finance wing executives was the first to detect the anomaly. “How could our boss go on a shopping spree in Bangalore when he has been in Mumbai,” he asked. Cross-checking with Birla, his staff found that the original credit card had been with him throughout.

The Worli police registered an FIR (crime number 298/11) under section 420 of the Indian Penal Code and other provisions of the Information Technology Act. Inspector Sudhir Mahadik, who confirmed receipt of the complaint on behalf of Birla, told Bangalore Mirror, “Preliminary investigations have revealed that fraudsters have used Birla’s credit card for shopping in Bangalore. We have formed a special team to probe the matter, and have alerted our counterparts in Bangalore.” According to the police, the fraudsters swiped Birla’s card around 10 times in six days.

G K Tulsiyani, a representative of the Birla Group, said, “Kumar Man-galam Birla had not been to Bang-alore during the time the purchases using his card were made. It seems his card has been cloned as he has the original card with him. The cops are probing the matter.”

In similar cases reported a couple of months ago, the Bangalore Police arrested two people who went on a shopping spree at the UB City mall with some cloned credit cards.

The tip-off had come after Crime Branch sleuths of the Mumbai Police arrested Suhail, Afsar and Nadeem, both Bangalore residents, and Bhaskar, from Kalyan near Mumbai, on charges of cloning credit cards and allegedly using them for shopping.

Moving into action, the Bangalore Police arrested Jayakumar Samuel of Bangalore and Harish Steven of Mysore, recovering 205 cloned cards from them.

The Mumbai Police too had recovered 77 fake credit cards.

CCTV grabs had showed the culprits, led by Suhail, visiting several showrooms of leading mercantile brands at UB City, Indiranagar, Brigade Road, buying goods worth more than Rs 25 lakh.

Courtesy- http://www.bangaloremirror.com

Calculate your ULIP NAV

As stipulated by IRDA, the Net Asset Value (NAV) computation formula for Linked Funds stands modified effective August 18, 2011

I wish to intimate all readers that pursuant to the Insurance Regulatory and Development Authority circular dated 29th July 2011 the formula for computation of the Net Asset Value Per Unit (NAV) for Linked funds stands modified as under: Old Formula: (As prescribed by IRDA and as Stated in the policy document) The basis used for calculation of NAV would be the Appropriation Price and Expropriation Price. The Appropriation Price shall apply in a situation when the company is required to purchase the assets to allocate the units at the valuation date The Expropriation Price shall apply in a situation when the company is required to sell assets to redeem the units at the valuation date. The NAV per unit of each Investment Fund will be calculated as per the prevailing IRDA guidelines mentioned below When Appropriation Price is applied: The NAV shall be computed as: (Market Value of Investments held by the fund + The Expenses incurred in Purchase of the Assets + Value of Any Current Assets + Any Accrued Income Net of Fund Management Charges - Value of any Current Liabilities - provisions, if any) Divided by the number of units existing at valuation date (before any new units are allocated) When Expropriation Price is applied: The NAV shall be computed as: (Market Value of Investments held by the fund - The Expenses incurred in Sale of the Assets + Value of Any Current Assets + Any Accrued Income Net of Fund Management Charges - Value of any Current Liabilities - provisions, if any) Divided by the number of units existing at valuation date (before any new units are allocated) Modified Formula: (As stipulated by IRDA effective August 18, 2011) (Market Value of Investments held by the fund + Value of Any Current Assets - Value of any Current Liabilities & Provisions, if any) Divided by the number of units existing at valuation date (before creation or redemption of any units) Please note that the above change is effective 18th August 2011 and all the policy contracts issued by us (linked funds) stands modified to the above extent.

Two sides of a coin

The sharp fall in the rupee is likely to hit oil imports and add to inflationary pressures, but exporters hope to benefit from the weakening of the Indian currency when they enter into fresh contracts.

The rupee has depreciated nearly 10 per cent in the last two months.

State-owned oil firms are worried as the country imports 80 per cent of its crude requirement. For every rupee depreciation, the under-recovery increases by around Rs 9,000 crore. This will put pressure on the finances of oil firms.

In the first quarter of this fiscal, the country imported fuel worth $46.15 billion. High oil import bill is a major cause of worry.

The country will not be able to take advantage of the fall in global crude prices because of the rupee depreciation. The oil burden will affect inflation.

A weak rupee would provide competitive advantage to exporters to the newer markets such as Africa, Latin America and South-East Asia when they entered into new contracts.

Importers cowered in fear as the rupee slumped to a 28-month low at 49.58 against the dollar, which rose to a seven-month high against major currencies as an aversion to risk swept across the world’s financial markets. Importers are rushing in to buy dollars, the rupee were under pressure throughout the session. The rupee had been at its weakest at 49.78 on May 14, 2009. It had registered the biggest fall of 152 paisa, or over 3 per cent, on May 18, 2009. .

The rupee went into a free fall as importers scrambled to scoop up dollars and the RBI made a less than half-hearted intervention attempt to prop up the tumbling currency.The rupee’s close marks a steep fall of 124 paisa from Wednesday’s close. This is the biggest single-session fall in nearly two years.Wary forex experts aver that if the current global uncertainty continues (igniting a further dollar rally) and there is more demand for the greenback from importers, the rupee could easily breach the 50-mark. Few pessimists are pointing out that the unit may cross the 53-mark as well.Dealing room circles said with risk aversion sweeping across markets because of worries over the global economy, investors were betting in safe haven assets such as the dollar.With equities witnessing savage cuts and foreign institutional investors selling, dollar supplies dried up.This resulted in the rupee resuming sharply lower at 48.79 a dollar from the overnight close of 48.34.

Two sides of a coin

 The sharp fall in the rupee is likely to hit oil imports and add to inflationary pressures, but exporters hope to benefit from the weakening of the Indian currency when they enter into fresh contracts.

The rupee has depreciated nearly 10 per cent in the last two months.

State-owned oil firms are worried as the country imports 80 per cent of its crude requirement. For every rupee depreciation, the under-recovery increases by around Rs 9,000 crore. This will put pressure on the finances of oil firms.

In the first quarter of this fiscal, the country imported fuel worth $46.15 billion. High oil import bill is a major cause of worry.

The country will not be able to take advantage of the fall in global crude prices because of the rupee depreciation. The oil burden will affect inflation.

A weak rupee would provide competitive advantage to exporters to the newer markets such as Africa, Latin America and South-East Asia when they entered into new contracts.

Sensex closes 704 points down, biggest drop in over 2 yrs

Indian shares fell 4.13 per cent on Thursday; the sharpest single-day drop in two years, mirroring global markets after the US Federal Reserve gave a grim outlook for the US economy. 

The benchmark 30-share Sensex index closed down 704.0 points at 16,361.15 at the BSE

 its second straight day of losses. 

Investors sold heavily after European markets opened sharply down and the sentiment remained downbeat with US futures trends indicating a further fall later on Thursday. 

The rupee also fell to a new two-year-low of 49.01 rupees to the dollar -- a level last seen in September 2009 -- as demand for the safe-haven greenback rose. 

The fall in the rupee will fuel India's inflationary woes, making imported goods such as foreign crude oil, on which the country is reliant, more costly. 

India's annual inflation is currently near double digits, the highest amongst most leading global economies. 


The Reserve Bank of India raised rates for the 12th time in 18 months last week to combat inflation, despite signs of slowing growth. 

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All this and much more on a Single Page!

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Govt set to pick new LIC chairman

The government is set to appoint a full-time chairman of the Life Insurance Corporation of India within 10 days, a top finance ministry official said.

“It will take place very shortly… could be a week or 10 days,” financial services secretary D.K. Mittal said. He blamed the delay on the long selection process.

The LIC has been without a full-time chairman since May after the then chairman T.S. Vijayan’s five-year term ended.

As an interim arrangement, additional secretary in the finance ministry, Rakesh Singh, was appointed as the chairman. Subsequently, D.K. Mehrotra, the incumbent managing director was asked to officiate as the chairman of the country’s largest financial institution.

A selection panel, headed by economic affairs secretary R. Gopalan, had invited four candidates in June, but a decision could not be taken, as two of the contenders did not have central vigilance clearance.

On the names being discussed, Mittal said, “That’s for the selection committee to decide. What I am saying is that this process is on and very shortly you will get a final (decision).”

According to earlier reports, the shortlisted candidates — all from within the LIC — include current acting chairman D.K. Mehrotra, managing director Thomas Mathew and three executive directors — A.K. Sahoo, T.T. Mathew and K.B. Saha.

Several questions have been raised about the government’s inability to find a full-time leadership for the LIC, which has assets of over Rs 10 trillion, especially at a time it faces competition from private players since the opening up of the sector a decade ago.

SBI home loan

The State Bank of India today extended its 25 basis point concessional home loan scheme until December after facing stiff competition from its rivals offering dual interest home loan products.

Under the scheme, the SBI offers a 25 basis point discount on interest rates on its card rate across the tenor of a floating loan

BSNL feeling the heat for stuff

State-run Bharat Sanchar Nigam Ltd is working on a revised plan to reduce its workforce as salary payments have affected its revenues. The PSU telecom firm’s net loss of Rs 5,997 crore during 2010-11 can be attributed to hefty payments made towards salaries and the purchase of 3G and BWA (broadband wireless access) spectrum, company officials said. BSNL had suffered a loss of Rs 1,823 crore in 2009-10 for the first time since its inception in 2000.  Around 47 per cent of BSNL’s revenue go towards staff salary.

The company is working on plans such as voluntary retirement scheme (VRS) to reduce the headcount.

The department of telecom (DoT) had rejected BSNL’s proposal to trim its workforce by 21,000 as the number was too low considering the financial burden. The DoT had suggested that the company should reduce its workforce by about 1,00,000, as proposed by the Sam Pitroda panel set up by Prime Minister Manmohan Singh to improve the financial health of the firm. The PSU, with an employee base of about 2,80,000, has been struggling to survive in the industry because of high employee cost, declining revenues and low tariffs. The VRS scheme may require the company to make a one-time payment of about Rs 2,000-3,000 crore, while the DoT will shoulder the remaining financial burden.

Foreign brokerages edge out locals

Foreign brokerages are swarming into India sending several local entities to the wall as the white heat of competition crimps margins that have already been mauled by the sharp fall in trading volumes. Many Indian outfits have shut down shop; others are scaling down their business or taking a hard look at their business model. Several big boys of global finance have beefed up their trading desks in India over the past few months, including Barclays and Jefferies, a US-based full-service securities and investment-banking firm. A slew of boutique brokerages from countries as diverse as Portugal and Korea have also waded into the Indian market. Market sources say the newbies who are keen to expand their role in the sub-continent include Portugal’s Esprito Santo and South Korea’s Samsung Securities and Mirae Securities. The upshot of this is that several local brokerages such as Mangal Keshav Securities and Alchemy Share and Stock Brokers have had to shut down their arms catering to the institutional business. Unconfirmed reports indicate that many other homegrown outfits that had sprouted in the past decade have started to trim their head count as they wilt in the heat of the competition. Faced with cutthroat competition and the slump in trading volumes, local entities are under pressure to raise compensation packages, including bonuses for the talent that operates their trading desks. The tough plight of the domestic brokerage houses was evident in the first quarter of this fiscal when most of the listed financial service entities reported lower income from the broking business. The slide has been triggered by the 14 per cent decline in the average daily market turnover on a sequential quarter basis. The turnover is down both in the cash market and the futures and options (F&) segment. Brokerages are worried because the turnover in the cash segment —, which has always been more profitable and remunerative — has fallen sharply.  Even as the share of the cash segment has declined, options now constitute a major share (over 65 per cent) of the market volumes. This segment gives very low yields to brokerage firms. The presence of a number of players in the segment has also affected brokerage rates, which are at abysmal levels. The margins in the brokerage business are as bad as the telecom sector where market leaders have to fend off an extremely aggressive bunch of new players. However, industry experts aver that brokerage houses are not in a position to raise rates like the telecom sector, where tariffs were increased recently.

Bet on equity, by picking the right ones

Equities are in the doghouse right now — and it is the best time to go stock picking. Nevertheless, investors need to make the right bets when they go bottom fishing. one has to  focus on specific companies rather than sectors even though several verticals have looked very attractive in the current meltdown in the markets. The current market is safe for investing. However, the real pay-off will come from your ability to pick the right bunch of mispriced bets. Even though several sectors look interesting, it’s all about picking the stocks of the right companies. The retail investor must bring his own competency to figure out how much a company will make in the next five or seven years and whether he is paying a price higher than that or significantly lower than that. Since the start of this calendar year, the BSE Sensex has plummeted nearly 18 per cent from 20500 levels. One outcome of this fall and the recent volatility is that the character of market and investing has changed with investors now more focused on index movements even as they have withdrawn from the equity markets. Earlier, it was more of an investing market where investors did not bother much about index movements. Now the whole talk is about where global markets or local markets are headed. Investing is not about markets, but finding businesses or companies who can make a lot of money and buying a small piece of it. To me, Indian equities will remain one of the best-performing asset classes over the next decade, and the arguments are far more compelling now that the markets have corrected sharply from their highs. The lower the market goes the better for investors. This comes even as price-wise the markets have entered an “under-valuation zone”. The price to earnings ratio (P/E) for the Sensex has eased from a multiple of 26 to 27 to a multiple of under 14 at present. The long-term average PE (for Sensex) has been 14.5. Therefore, we have now entered a historical under-valuation zone and we have breached the average PE multiple.  However, are we close to the bottom? I cannot say that. However, if it tumbles to a PE multiple 10, we will have reached an absolute bottom. Investors have been spooked by the slump and are clinging to the sidelines, waiting for the storm to blow over. They are afraid to make a mistake and suffer big losses. In investing, you have to learn to pardon yourself for committing mistakes. Please do commit mistakes; an individual who commits more mistakes eventually becomes a sane investor.

A brief review of monetary policy of RBI

RBI announced its mid-quarter review of monetary policy today. The central bank has increased the repo rate by 25bps to 8.25% with immediate effect. With this increase, the operating policy rate is higher by 500 bps since the beginning of RBI’s current rate hike cycle.

Stance of Monetary Policy:

RBI has re-iterated its anti-inflationary stance. RBI stated that it is imperative to persevere with the current anti- inflationary stance since a premature change in policy stance could risk hardening inflationary expectations.

The tone of the monetary policy commentary however, appears much less hawkish compared to the previous policy. 

On the growth front, GDP decelerated to 7.7% in Q1FY12 from 7.8% in Q4FY11 and 8.8% in Q1FY10. IIP too posted a severe slowdown to 3.3% in July from 8.8% year ago. 

Monsoon so far has been normal.

The first advance estimates for 2011-12 kharif season point to a record production of rice, oilseeds and cotton, while the output of pulses may decline. In the next quarterly review, RBI is likely to revise its FY12 GDP forecast of 8% downwards to 7.7%-7.8% levels.

RBI remains concerned on potentially adverse global macroeconomic developments.

Inflationary pressures on account of persistent food inflation and some elements of fuel inflation will continue to keep headline inflation higher. 

However, going forward, demand-side inflationary pressures are seen moderating on account of several factors such as cumulative impact of past policy actions, improved monetary transmission levels and moderating growth momentum.

Given that non-food manufacturing inflation (which is closely tracked by RBI as a measure of core inflation) has a higher weightage in WPI as well as limited ability of monetary policy to address structural food demand-supply imbalances, the repo rate appears to be close to peak levels. 

While RBI may keep some buffer for possibly another hike in case demand impulses do not act as per expectations in the latter part of this fiscal, it is also widely expected that, in case of any potential external shocks, RBI would move swiftly and choose to focus on financial stability versus inflation.

Outlook: 

RBI stance of monetary action will continue to be based on the inflation trajectory going ahead as well as the trends in global macro-economic scenario.

 We expect an average WPI inflation of ~8.5% during FY12 and FY12 GDP at ~7.75%. Another 25 bps hike is not ruled out during FY12. The steady pace of monetary tightening last year has resulted in moderating capex and investment demand.

A sustained continuation of previous, current and future monetary transmission into higher lending rates could affect both consumption and investment demand, with lagged impact of the same spilling over into FY13 as well.