Archive for January 9th, 2010

2009 Turned Out To Be Worst for Gilts Funds

2009 turned out to be a worst for gilt funds

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2009 turned out to be one of the worst for gilt funds, which offered the best returns to investors in a gloomy and uncertain 2008.

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On the other hand, 2009 proved to be a good year for diversified equity mutual funds (MFs).

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Most gilt funds gave more than 20% growth in 2008 with the best one topping the performance chart with a 44.8% increase in a year which saw equity funds post 34.2% to 80.4% losses.

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While diversified equity funds are back on top this year, gilt funds have slipped considerably due to the sharp rise in yields on government securities (G-Secs).

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The yield on the 10-year government bond has moved up by about 2.5% in 2009 bringing down bond prices.

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Prices of the 6.05% 10-year government bond issued in February 2009 is about Rs 11 lower than its opening price.

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Bond prices and bond yields are inversely related.

Rising yields have pushed down bond prices affecting the performance of gilt funds, which invest primarily in G-Secs.

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Only seven out of the 40-odd medium-term and long-term gilt funds have shown growth in 2009 while the 15-odd short-term gilt funds have shown only a marginal increase.

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While the market was expecting net government borrowings at Rs 1.1 lakh crore, it came at over Rs 3 lakh crore.

The gross borrowings for financial 2010 would be around Rs 4.51 lakh crore.

🙂

US Economy to Surge Up in 2010 : Economists

World Largest Economy to Expand in 2010

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Market forecasters and analysts have put forth the view that US economy will most probably turn in its best performance this year since 2004 owing to the factor that companies have increased the investment and hiring.

With the increase in the spending of perks, also, it seems a near probability.

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Many US economists have  said that the world’s largest economy may expand 3-4% in 2010.

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As per the top economists, the rebound in stocks and rising incomes will prompt Americans to do what they do best — consume.

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Faced with dwindling inventories and growing demand, companies will soon become confident the expansion will be sustained.

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Market experts and economists believe that Household spending would pick up the steam as US economy would move into the second half of 2010.

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The overall picture for 2010 will be an economy growing rapidly enough to bring down the unemployment rate to an average of 9.6%.

The rate will reach about 9% by the end of 2010, major economists quoted.

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US employers expect to hire more new workers in 2010 than they did in 2009, a sign the US recession may be easing its grip, a research showed.

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One-fifth of employers plan to add full-time, permanent employees this year, up from 14% in 2009, according to an online job site that surveyed considerable number of hiring managers and HR professionals.

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Just 9% said they plan to cut headcount in 2010, down from 16% in 2009, according to the nationwide survey.

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The number of employers who say they’re going to add full-time workers is up from last year, and that is very good news. There’s definitely an uptick.

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