Archive for the ‘Wealth’ Category

BUDGET PREVIEW 2011 – Final Part :)

Continuing The Final Part Of The Budget Preview 馃檪

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We believe that this year Finance Minister will take a gradual move towards fiscal consolidation by聽increase in Excise duty. Excise duty forms around 40% of Indirect Tax collections. Excise duty collections were聽down by 13% in April to December period to close to Rs. 70,000 crore comprising around 66% of Budgeted聽Estimates of Rs. 1,06,477 crore. The factors that contribute to our belief are; 馃榾

路Though the growth in corporate sales is not astonishing but profitability has improved to due to various聽cost control efforts which is quite evident by the corporate tax collection that have shown a growth of聽44% in December 2009. Cumulatively Net direct tax collections increased by 8.5 per cent during April-聽December 2009.

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路India being a consumption story has shown healthy growth in sales of consumer durables. For instance Automobile industry’s sales聽went up by 32 per cent in December over the same month in 2009. It is believed that a gradual hike in duty will get absorbed聽without affecting medium term prospects of the industry.

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路Partial rollback would also help the finance ministry effect a calibrated integration of excise duty with the services tax by the end聽of the next financial year, when the proposal for a Goods and Services Tax is likely to be implemented.

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路Finance Minister had indicated that he would like the fiscal deficit for 2010-11 to be around 5.5 per cent of GDP. The proposal to聽raise excise duty by two hundred basis points is being endorsed also to help the finance ministry raise more revenue and stick to聽the projected fiscal deficit target.

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Disinvestment would be the key focal point in the Budget. We believe that the Finance Minister would place high targets from the PSU sale proceeds. The factors that contribute to our belief are:

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路In order to bring Fiscal deficit under control that would subsequently ease upward pressure on interest rates.

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路This will help Investment in social sector projects which promote education, health care and employment & will also help in聽Capital investment.

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On the Corporate Tax front, we believe that the Finance Minster is unlikely to lower tax to 25% from the current 30% as per Industry demands. The rationale behind our belief is:

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路The direct tax code that proposes corporate tax to be 25% will be implemented in fiscal 2011 鈥 2012 & Industry have to wait till its聽implementation as it will replace the existing Income Tax act.

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路Already, government is trying to make up more tax revenue & is unlikely to take step in this direction as it may come as an聽obstacle in order to control fiscal deficit.

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On deregulation of Petroleum sector, we believe that in order to cut down on subsidies government could provide the road map for partial deregulation of the petroleum sector. The road map may provide OMC’s to review the prices of petrol and diesel on a聽regular basis however, LPG and kerosene could continue to be administered by the government. Factors that complement to our belief:

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路In view of the commitment of the UPA regime to flagship social security programmes聽that require huge allocations, Mr. Mukherjee has told Mr. Deora that it would not be聽possible to provide huge subsidies to the OMCs in future.

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On the External Economy side, we expect that the Finance Minister may continue to聽provide certain concessions like interest subsidy and extension of other export oriented聽schemes. The rationale to our belief:

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路In the recent two months i.e. November & December, merchandise exports registered a聽positive growth of 18.2% & 9.3% respectively. But in the period of April to December聽2009, the exports were still negative to the tune of 20% as compared to the聽corresponding period.

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路The world economic recovery especially in US & Europe is still questionable & the regions constitute approximately 15% & 21%聽respectively of our merchandise exports, thus directly affecting the trade.

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路Sectors such as engineering goods, jute, carpets, handicrafts and leather goods are continue to be in bad shape, others such as聽gems & jewelry drugs, plastics and petroleum products are showing improvement.

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路Concluding, the main point is that it may not be a good time to take back the stimulus so soon that may derail the recovery.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please聽click here

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

Domestic Economy Rolls as Corporate India Offers 40% More Bonus Shares

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Issue of bonus shares by Corporate India to its shareholders in the first 10 months of the fiscal has shot up 40% over the total during the fiscal ended March 鈥09, after declining for two straight years.

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This interesting jump in bonus issues indicates positive sentiment of the corporate sector to serve a larger equity base.

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Companies like Britannia, TCS, Reliance Industries, Adani Enterprises, Jindal Steel, Divi鈥檚 Lab, JP Associates etc聽 have聽 issued bonus shares in the April 鈥09-January 鈥10 period.

There are as many as 61 companies which have done so.

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Jagannadham Thunuguntla, equity head with Delhi-based merchant bank SMC Capitals, said:聽 鈥淭he increase in companies doling out bonus equity to its shareholders reflects that the domestic economy is on the path of recovery.鈥

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Corporate India has got the confidence to expand equity capital base and issue bonus shares owing to the fact that they have performed very well this fiscal.

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Bonus issue is an offer of free additional shares to existing shareholders.

This is one of the ways of rewarding shareholders, who largely benefit from capital gains.

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A company may decide to distribute further shares as an alternative to increasing the dividend payout.

It is also known as a “scrip issue” or “capitalization issue”.

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The number of companies issuing bonus shares declined more than a quarter after hitting a peak in 2006-07 to 72 firms in 2007-08 and shrunk further to just 44 companies for the year ended March 鈥09.

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This came after three consecutive years of rise in number of bonus issues, when more listed firms announced a bonus bonanza in line with the bull run of the stock market.

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Bonus shares are issued by companies through capitalization of their free reserves.

When a company announces bonus issue, it is an indication of its management鈥檚 confidence to serve a larger equity base.

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Moneywise…Be Wise ;)

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If you find yourself asking the question 鈥

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Why should I Save ?

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Why should I Invest ?

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Where do I Invest ?

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Who would Guide me to take informed decision on my Investments ?

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鈥hen look no further !

Why SMC?

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SMC Group, a leading Financial services provider in India, a vertically integrated investment solutions company, with a pan-india presence is there to guide you and provide complete investment solutions to you.

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SMC Group, having rich experience of more then two decades in financial markets, is one of the largest & most reputed investment solutions company that provides a wide range of services to its client base of more than 5, 50,000 clients with presence in more then 1500 cities.

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SMC Online, an unit of SMC Group, is one stop financial investment portal for investor’s all financial needs.

Investors can trade online in Equities, FNO, Currency Futures, Commodities, apply online for IPOs, and invest online in Mutual Funds.

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SMC is :

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a) 4th Largest broking house of India in terms of trading terminals (Source: Dun and Bradsheet, 2008)

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b) 5th largest distributor of Initial Public Offering (IPOs) in retail (Source: Prime Data Ranking)

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c) Awarded 鈥Fastest Growing Retail Distribution Network in Financial Services鈥 (Source: Business Sphere, 2008)

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d) Recipient of 鈥Major Volume Driver Award鈥 from BSE for last three years consecutively.

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e) Nominated among the top three in the CNBC Optimix Financial Services Award 2008 under National Level Retail Category.

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f) One of the largest Proprietary Arbitrage Desk doing risk free arbitrage in equities & commodities.

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g) Commanding turnover of more then 3% in equity market, 4% in commodity market and 10% in DGCX.

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h) Transparent and professional management.

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j) Relentless focus on investor care.

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k) World class in-house research facilities providing research support to investors.

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l) All financial products and services under one roof.

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Next Blog we would try to read more about the other SMC’s investment products and services.

Stay Tuned for more on this 馃檪

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To know more about the SMC Products and Services, click here.

Set Up New Financial Plans After A Divorce !!

Set Up A New Financial Plans After A Divorce

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You need to do long term financial planning when you are going through a divorce.

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It鈥檚 important that you recover from the split by assessing your situation as singles and setting up new financial plans with a focus on longevity.

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Here are five simple steps for building your financial future after a divorce:

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1. Start with a plan.

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Take a look at your finances before the divorce and then subtract what you鈥檝e lost to give you a good perspective on your fiscal situation.

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Be realistic with yourself and set a budget that you can easily manage with your new single status.

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2. Check your credit.

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Maintaining your credit is an important step in walking away from a divorce financially intact.

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Examine your credit reports and ensure that any name changes or card closures are accurate and taken care of.

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3. Ensure your retirement.

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Confirm that all of your retirement arrangements are intact and that any assets or funds you are entitled to have been taken care of.

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Division of savings and accounts should be paramount in your review.

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4. Obtain the necessary insurance.

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Examine your insurance policies and make sure that you and your property are still covered.

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5. Review your taxes.

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Understanding the tax ramifications of your divorce is a key part of planning for your financial future.

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Confirm that all tax responsibilities between you and your spouse are coordinated appropriately.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Weekly Update of The Market (1st – 5th February) Part 1

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and along with the latest global business and industry updates.

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Weekly Update of The Market (1st - 5th February) Part 1

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A bout of volatility was witnessed in the domestic market throughout the week due to

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1.聽 F&O expiry,

2.聽 unfavorable global cues because of gloomy earnings forecast,

3.聽 anxiety about China‘s monetary tightening,

4.聽 the deteriorating finances of countries ranging from Greece to Japan and

5.聽 India’s central bank‘s decision to raise the CRR to 5.75.

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But on later days of the week, US Federal Reserve’s decision to keep interest rates unchanged boosted sentiments of global markets.

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Closer home, investors also heaved a sigh of relief as the central bank kept key interest rates unchanged at the quarterly policy review indicating that it would maintain a balance between price stability and growth and raised its GDP growth projection for the current fiscal to 7.5 %.

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The RBI at its quarterly monetary policy review raised CRR by 75 basis points to suck out excess liquidity from the banking system to the tune of Rs 36000 crore.

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On the flip side, the challenges that RBI foresees for the economy is fiscal consolidation.

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The central bank lifted its wholesale price index inflation forecast for the end of the fiscal year in March 2010 to 8.5% from its earlier forecast of 6.5%.

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RBI also said it expected inflation to moderate starting in July 2010, assuming a normal monsoon and global oil prices holding at current levels.

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Moreover, US Federal Reserve too maintained interest rates at near zero levels and vowed to do so for an extended period of time.

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Additionally, it also signaled its intention of unwinding the massive monetary stimulus that it had undertaken during the peak of the crisis.

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Stay Tuned for More on weekly updates.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Mutual Funds : Marginalise Your Investment Risk

Hello Friends here we come up with another write up on 鈥淪MC Gyan Series鈥.

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Mutual Funds : Marginalise Your Investment Risk

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Topic is “Mutual Funds : Marginalise Your Investment Risk
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Mutual funds are the best investment tool for the retail investor as it offers the twin benefits of good returns and safety as compared with other avenues such as bank deposits or stock investing.

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Choose the wrong fund and you would have been better off keeping money in a bank fixed deposit.

Keep in mind the points listed below and you could at least marginalize your investment risk:

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1) Past performance –

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While past performance is not an indicator of the future it does throw some light on the investment philosophies of the fund, how it has performed in the past and the kind of returns it is offering to the investor over a period of time.

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Also check out the two-year and one-year returns for consistency.

How did these funds perform in the bull and bear markets of the immediate past?

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Tracking the performance in the bear market is particularly important because the true test of a portfolio is often revealed in how little it falls in a bad market.

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2) Know your fund manager

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The success of a fund to a great extent depends on the fund manager.

The same fund managers manage most successful funds.

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Ask before investing, has the fund manager or strategy changed recently?

For instance, the portfolio manager who generated the fund鈥檚 successful performance may no longer be managing the fund.

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3) Does it suit your risk profile?

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Certain sector-specific schemes come with a high-risk聽 high-return tag.

Such plans are suspect to crashes in case the industry loses the market men fancy.

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If the investor is totally risk averse he can opt for pure debt schemes with little or no risk.

Most prefer the balanced schemes which invest in the equity and debt markets.

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Growth and pure equity plans give greater returns than pure debt plans but their risk is higher.

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4) Read the prospectus

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The prospectus says a lot about the fund.

A reading of the fund鈥檚 prospectus is a must to learn about its investment strategy and the risk that it will expose you to.

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Funds with higher rates of return may take risks that are beyond your comfort level and are inconsistent with your financial goals.

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But remember that all funds carry some level of risk.

Just because a fund invests in does not mean it does not have significant risk.

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Thinking about your long-term investment strategies and tolerance for risk can help you decide what type of fund is best suited for you.

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5) How will the fund affect the diversification of your portfolio?

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When choosing a mutual fund, you should consider how your interest in that fund affects the overall diversification of your investment portfolio.

Maintaining a diversified and balanced portfolio is key to maintaining an acceptable level of risk.

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6) What it costs you?

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A fund with high costs must perform better than a low-cost fund to generate the same returns for you.

Even small differences in fees can translate into large differences in returns over time.

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Finally, don鈥檛 pick a fund simply because it has shown a spurt in value in the current rally.

Ferret out information of a fund for at least three years.

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The one thing to remember while investing in equity funds is that it makes no sense to get in and out of a fund with each turn of the market.

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Like stocks, the right equity mutual fund will pay off big 鈥 if you have the patience.

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Similarly, it makes little sense to hold on to a fund that lags behind the total market year after year.

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SMC Global Securities : Money Wise Be Wise !

India Inc Set to Raise Rs.50k Crores Through IPOs in 2010: SMC Capital

India Inc Set to Raise Rs.50k Crores Through IPOs in 2010:SMC Capital

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Domestic companies seems set to get on with the huge fund raising exercise this year with plans to raise over Rs 50,000 crore via public offers, driven by the sharp recovery in the stock market.

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Almost 50 companies have already filed the draft prospectus with the market regulator, the Securities and Exchange Board of India (SEBI).

This depicts at the healthy prospect of the strong IPO market after the encouraging revival of IPO market in 2009.

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Indian companies had raised about Rs 20,000 crore through IPOs in 2009.

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Market Experts feel that fund raising can go up to Rs 50,000 crore this year since Government has already planned to sell shares in a host of public sector companies by way of IPOs and follow-on public offers (FPOs).

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Five companies aiming to raise over Rs 300 crore have already received the regulator鈥檚 clearance for the IPO, if draft prospectus filed with the SEBI is anything to go by.

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鈥淭he IPO pipeline looks strong in 2010.

Also the way the government is pushing ahead with the disinvestment plan, fund raising can go up to Rs 50,000 crore by the end of the year,鈥 SMC Capitals Equity Head Jagannadham Thunuguntla said.

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As part of its disinvestment plans the government intends to raise over Rs 20,000 crore by way of FPOs of NMDC, SAIL, NTPC, and REC.

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Some of the prominent private companies which have their IPOs lined up, beside this, include Jindal Power, BPTP, Reliance Infratel, Emaar MGF etc;

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鈥淥f the total IPOs that are in the pipeline, as many as 16 are from real estate sector. However, their success is a bit doubtful as the appetite for realty IPOs are currently less,鈥 Thunuguntla added.

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Primary market fund raising in 2008 saw 30 IPOs mopping up Rs 17,000 crore, but shares of many these companies gave the investors modest-to-good returns.

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