Choosing a good mutual fund is a tricky business, especially when many factors such as the ur timing,  the fund manager, his mandate, the investment style, the track record etc affect their performance. Even if u invest now there is no guarantee of getting a great return after the 3 yrs lock-in as per 80C.

Please note that investing in equity or equity mfs in these uncertain times can be a bit risky. Please break up ur investments and dont invest in lumpsome especially when markets are up. I also recommend that one  invest in a basket of MFs, especially at market dips.   The funds are chosen on the basis of a decent portfolio and consistant returns rather than very high returns. That said here are my top  Tax Saving Mutual Funds.

HDFC Taxsaver

NAV 191.858 (18/12/09)  EXPENSE RATIO 2.06

NET ASSETS  (Cr)2,002.26 (30/11/09)

This is  a relatively good safe performer over the long run  with a decent consistent track record for the past 3 years.

Canara Robeco Equity Tax Saver

NAV 21.14 (18/12/09)  EXPENSE RATIO 2.50

NET ASSETS 71.19 (30/11/09)

This is a slightly aggressive fund managed by Mr Anand Shah since Sep - 2008, and shows good returns.

Magnum Taxgain

NAV 55.85 (18/12/09)EXPENSE RATIO 2.5

NET ASSETS  (Cr) 4,999.93 (30/11/09)

One of the best Tax savings funds over the long term, this fund is a behemoth that has A group scripts as its top holdings, and a large cap heavy pf.  This is a good fund for investors that choose diversification and  safety over returns.

Sundaram BNP Paribas Taxsaver

NAV 40.9593 (18/12/09)  EXPENSE RATIO 2.24

NET ASSETS 1,214.02 (30/11/09)

Fund has a good performance record for the last 3 years, has a good portfolio/sector mix  and has come out yet again as a leader in its class.

Watch this…

didnt expect this quality from Africa.. did u ?

this should clear out some of ur misconceptions about Africa, the cradle of music that has shaped much of music around the world. (thanks Mahendra )

Its winter and the way food prices have been climbing in recent times warrants panic in govt circles.  One wonders what the price of food articles will be in the lean period ie summer. One needs to worry about the urban lower /middle middle class, not just the poor as many food article prices are going beyond peoples reach, and the onion crises that  caused the fall of the BJP govt seems tiny in comparison to the steep overall price increase.

One wonders about where all the record breaking procurement for PDS in the previous yr has disappeared as the price of every food item has tripled in some cases at the retail end. People are already sniffing a huge scam in the sugar export and import done by the agri ministry, but one thing is for certain , the govt has been incompetent and failed massively to control prices. The way things stand this is sure to start effecting manufacturing through increasing labor and input costs.

Food prices in the week-ended November 21 have shot up by 17.47% from their year-ago levels. Week on week, they rose by over 1% pushed largely by a 12% rise in onion prices. This is the sharpest rise in 11 years — that is since 1998.

some experts say that while poor kharif harvest explains the 13% year on year jump in cereals and the 3% jump in pulses, they can’t explain the 100% rise in potato prices, the 30% jump in onion prices and the 29% jump in eggs, meat and fish.

Chances are that higher minimum support price (MSP) and programmes like the NREGS are also responsible. More importantly the high food inflation coupled with the 7.9% GDP growth led to two key policy makers hinting that RBI may have to resort to rate action.

CNBC

But the fact is that the govt is looking towards the RBI to deal with it, when it knows fully well that monetary measures can do little to sort out this hot potato, something that the current gov Subba Rao has repeated more than once.

Politicians including the agri minister and finance minister  freight helplessness, while outwardly showing worry and have in typical upa style  postponed the fall in agri commodity prices to post rabi crop.

The nation is not just suffering food inflation it is facing a doubling of  in  fiscal deficit yet again. It would be very difficult for the govt to cook its books this time around with creative accounting as the fisc deficit has gone up 93%and the revenue deficit111 %.If the Disinvestment program does not start soon the govt will be in a bit of a jam as most rating agency s will most certainly downgrade our ratings which stand at  BBB- (S&P) to junk status.

Here are some figures as per TOI. Net net looks like the days of high inflation, high deficits and high growth numbers (gross) are going to continue.

Not only that , there is more cooking of books to benefit cronies and vested interests as many PSU banks are cleaning up their books using One time settlement or OSTs.

According to government data, in 2007, against a recovery of Rs 9,200 crore, these PSBs had written off more than Rs 9,400 crore. The story was repeated in 2008 when against a recovery of Rs 9,300 crore these banks had written off Rs 8,000 crore. The net recovery in 2009 was about Rs 11,000 crore while write-offs exceeded Rs 7,400 crore.
The government’s claim that it has managed to bring down NPAs from 18% in 1997 to 2% at the end of March 2009 sounds hollow and highlights an alarming trend of “cooking” books to present a healthy status. Though in the previous year, a portion of write-offs also included agricultural loans, the net NPAs of these PSBs at Rs 44,000 crore at the end of last fiscal against an outstanding of Rs 21 lakh crore is likely to see a surge given these banks exposure to commercial real estate.

Total outstanding credit to the commercial real estate of Indian banks, both government-owned and private, at the end of March 2009 was Rs 91,500 crore as against Rs 63,000 crore till March 2008. …(TOI)

Inflation is price rise , or is a rise in the general level of prices of goods and services in an economy over a period of time.

India uses WPI figures to gauge inflation trends , while world over CPI inflation data is used . It is but natural that the govt prefers this system, because it is far easier to manipulate wpi index than cpi index.

Inflation (WPI) that had turned negative, thanks to a fall in commodity and metal prices, is now positive and rising fast, thanks to galloping food inflation.

Though people, seeing throught the deceipt, are now calling the govt figures as bogus, they  have no real alternative as the BJP is hardly an opposition any more while the Commis are suddenly low profile thanks in turn to a solid defeat. Hey do Politicians ever care ?

Read Politics and Prise rise

World over CPI inflation has fallen/ is falling but in India it rules still in double digits. A simple look at the prices of a few commodities tells a tale of doubling of prices of most agri commodities during the first UPA term or Cidambaram FM term ,  Wheat from 16 to 25 a kg , Basmati Rice from50 to 110 a kg , Milk from 12 to 26 Rs a litre, Eggs from 18 to 36 a dozen, French beans/Peas  from 16/20 kg to 40 a kg. Potatoes from 8 to 12a kg, Onions from 8 to 20a kg.

International data shows a falling trend in food item prices. As per yahoo — Cpi inflation on food has been actually going down internationally – everything from pasta to cereal to olive oil — fell by 0.4 percent.

Politicians including the agri minister freight helplessness, and have postponed the fall in agri commodity prices to post rabi crop.

What amazes me however, is the Pre election dip in food prices that happens before almost  every election, especially in agri commodities in Mumbai. I was amazed at how the prices of fruits and vegis pre elections fell around the  Maharashtra state elections .

Two weeks post Maharashtra state elections, we still dont have a govt and some  food article prices seem to have trippled from the pre election dip .

Dals and pulses which have tripled are expected to go higher as demand has all but increased thanks in part to the deficit financed schemes such as NREGA and MSP.

Politicians  control mandis and love to put abnormal amt of controls on future trading at the MCX though this is turning out to be counter productive .  But in hindsight, i wonder… Are they in a deep nexus with market participant traders who anyways manipulate the arcaic system?

Eating out has seen a real sharp rise too and my dosa index says that a sada  dosa which costed Rs 10, costing Rs 20 pre elections , has gone to 24 now while a lunch plate costing 22/24 is costing Rs 36 to 40 pre is costing Rs45 ~50 post Mah elections.

The Inactive government.

While canvassing for the central election, the current govt has been taking credit both for the abnormal growth during its first term and for not liberalizing the economy and taking precautions to avoid the financial crises, while comparing India with the west. But has our govt really done a good job?

The truth is that the  abnormal growth during the first term of MMS was mainly thanks  to the steroid  economics of US fed, which kept interest rates far too low for far too long creating asset bubbles world over especially in Asia.

India whose post inflation growth during his first term was minimal was partially protected from the financial crisis thanks to Y V Reddys tight leash on the banks, not due to Chidambarams policys, some of which have been disastrous in some aspects.

Both previous and current Fm have been postponing their promised  fall in food prices at regular intervals.

Crude has gone up from $55 a barrel to between $75 and 80.

The dollar has fallen appx 20% against the euro, but the rupee has fallen against the dollar, euro and probably the yen . Eventually creative accounting and massive defecits are bound to show up somewhere.

Sugar prices are on a firm uptrend here and international prices are inching up mainly due to speculation based on  India’s shortfall.

Expect the powers to be to inflate their way through any future crises, and expect more price rise in rice,  sugar, dals and pulses.

India just bought a whole lot of gold from the IMF auction,  200 tonnes to be precise. Though a step taken in the right direction, it seems to be a bit delayed as most BRIC and developing countries especially China seem to have already diversified their reserves away from the dollar.One also wonders if the price is right as the yellow metal is selling at $1086… Wonder if the perma bulls of gold have it right when they expect gold to double from here.

Secondly im rather uncomfortable with the FMs talk contrasting India’s strength with weakness elsewhere: “Europe collapsed and North America collapsed.” . He forgets, we have plenty of problems of our own. No wonder a  Livemint headline says Markets-bearish-but-FM-bullish

Agree with Chris Woods  view on markets.

I was just wondering when the interest rate cycle would turn and interest rates would go up.Consensus says Rbi might increase rates by March. But one always wonders how things would turn out especially when traders world over are jittery, inflation at the retail end is in double digits and still going up, and the govt is in no mood to usher in some fiscal prudence. All that the ministers seem to do is talk austerity, mostly from the confines or their mini palaces in Leutons Delhi.

Recently Salman khurshid talked about Class action suits. But as this article suggests there might be very little progress on it as it can open a can of worms both for the govt and for the corporates that fund parties running it.

Ihe IPO markets as expected have have remained dull and most IPOs have given negative returns.

When i saw the rushes of the new to be released movie Blue with Sanjay Dutt, Akshay Kumar, Zayed Khan and of course  Lara Dutta, it distinctly reminded me of Bessons much talked about   Le Grand Bleu which i had seen almost a yr ago.

Blue is touted to be one of bollywoods most expensive movies (130 Crore?). My initial impression is that it seems to be a repackaged desi story , far far away from the original based on real life free divers. The shots, camera work, styling and angles from all the promos and pre release materials remind me of many many a movies  including the original,  french movies inc B 15 and music videos  and our own DevD. Turns out it is a bollywood remake of Into the Blue.

So if u want to see some blue water fish and lots  of designer  bikini action, with an added kylie minogue, do watch Blue.

Else you can always watch discovery / planet and living etc for more substantial content.

When SEBI announced allowing direct applicants too apply for mfs without any load or cut, it was seen to be a revolutionary step much resented by agents and fund houses alike. Though a rare few do direct purchases the trend will take some time to catch on.

What most people wondered then was about why IRDA, an agency meant to regulate the insurance industry did not take similar steps to protect small investors, from the ulip and insurance swindles  involving misselling of ulip products by agents as safe bets with fancy market based returns assumptions, having a lockin of only 3 yrs.  The commissions and loads mfs paid out, was minuscule say 2.5% max in comparison to some first premium commissions especially in case of ulips (including or excluding other costs  and charges) that were between 40% and even to 75% in one instance if i remember right.

Thankfully Livemint reports

“Irda recommended in July that following the amendment of the Insurance Act, the regulator must get the power to make it mandatory for life insurance companies not to charge agent’s commission to a customer who buys a policy directly,” said the Irda official, who did not want to be named.

“There is a clear case that customers who apply directly to buy a policy should not be charged the same way as others who come through agents. Lowering the charges for direct customers will also ensure a healthy relationship between the customers and their insurance companies,” said R. Kannan, member (actuary), Irda. “The matter is before Parliament at the moment.”

Investments in Ulips involve several charges such as an initial administration charge or premium allocation charge, a regular administration charge, a policy administration fee and an investment management charge. Collectively these charges may eat up to 70% of the premium paid in the first year, including up to 40% of the premium as agent’s commission.

Hope it is implemented soon, as it will benefit the insurance companies the most , as most intelligent investors will start taking insurance seriously (sorry as things stand insurance is still an investment and tax savings vehicle).

]]> http://techntrek.wordpress.com/2009/09/16/irda-going-the-sebi-way/feed/ 2 Prax http://techntrek.wordpress.com/2009/09/02/ipo-season-q2-2009/ http://techntrek.wordpress.com/2009/09/02/ipo-season-q2-2009/#comments Tue, 01 Sep 2009 21:12:40 +0000 Prax http://techntrek.wordpress.com/?p=1402 ]]>

The current IPO season started with a few Ipos including Mahindra holidays and two talked about power listings NHPC and Adani power.

ADANI POWER BSE: 533096  |  NSE: ADANIPOWER

IPO ISSUE PRICE 100 1St Day close 100.10 Today  100.85

NHPC BSEId :533096    NSE Id :ADANIPOWER

IPO ISSUE PRICE 36 1St Day/ Today close 36.70

Both have barely given ANY returns to their investors as they were fully priced, thus most small and leveraged investors must be a disappointed  lot. Another Raj oil mills has been hammered well below listing price(27%).

The lead managers Enam have justified/defended the pricing by asking investors to take a long term view, that too in an edgy flippers market, when past experience has been mixed to negative.

It is common knowledge that both the management and managers to some issues use different tactics  from making/using unknown front companies to bit in the qib segment, to cultivating HNIs and renting demat accounts to offering grey market premiums to retail investors etc to make sure that the issue is oversubscribed .

What i have noticed in these ipos is that though the QIBs demand  is very high even on the first day(even after SEBIs new rules), the HNIs and the Retail subscription Eg NHPC  comes in very late.  Thank God, over subscription has become much more sane, especially in the retail category as most investors have seen through the game / not forgotten that they have made at least 50% losses on various ipos like Edelweiss , Reliance Power, Kolte Patil, Brigade etc.

NHPC IPO Oversubscription

Qualified institutional buyers (QIBs)  subscribed 29.16 times.
Non institutional investor category, was subscribed 56.70 times.
Retail investor category was subscribed 3.87 times.

I am still unsure as to why even after such high oversubscription 29/56  times why a solid psu script lacked demand  and languishes at almost ipo levels on day one .

All in all things will be very interesting as the Oil India IPO has been announced at Rs. 950 to Rs. 1,050 per share, that too when a fully valued secondary market (NSE 4700) is waiting to correct.

Today is the 7th day, of the festivities and a popular day when some choose to immerse their idols. As i was returning from  my friends house after seeing his Ganpati, i decided to walk it down, due to the road blocks and the creeping traffic and poor BEST frequency.  I saw  a few people who went about doing the whole thing without the noise but with a lot of dignity. They stood out from the crowd, though they neither had nashik dhols nor bands with keyboards, but had the passion,  zeal and that true spirit of bhakti as they carried their idol in their hands and chanted Ganpati Bappa Moraya!   Somehow it reminded me of a bygone era when i accompanied my uncles for immersion puja. What comes close,  are the barefoot bhakts who are known to walk miles to offer prayers to Siddhivinayak and the dignity with which the Lalbaugs mandals go about their activities .

The zeal shown by many of the pandals and their bhakts especially  in collecting donations and in the immersion procession with the nasik dhols and the organ, the tamasha and the noise making,  along with the drinking and the likes, of course violating the 12pm deadline rather than attending/doing a proper puja of the deity during the 7/10 days,  makes me wonder about their true motives.

When i was discussing with my friend about the Ganpati at my uncles and friends house , the first question he asked was – so what was their choice Nasik dhol or band? just reinforces my belief that humans are very social animals.

Image courtsey Lalbaugcharaja

Hope the good lord Ganesh blesses us all.