 |
 |
| You are here: Home
> PERSONAL
FINANCE
|
| |
| NEWS |
| The future
of an alliance |
|
|
|
Rachna Monga
|
|
|
CALL it the coming together of "yesterday's
stars". Birla Sun Life Mutual Fund's acquisition
of 14 of Alliance Capital's schemes brings with
it a legacy. Just five years back, Birla Advantage
and Alliance Equity were star performers, with
their respective star fund managers - Bharat Shah
and Samir Arora.
Today, Alliance's fund managers face the prospect
of not being called over to Birla with the schemes.
Do Alliance investors need to worry?
The performances of the funds had slipped during
the stars' time, but sharper comparisons emerge
from the time after they left (Shah in late 2002,
and Arora, a year later). During some of the bull
and bear phases since, Alliance Equity posted
a superior record. For instance, between April
2003 and January 2004, Alliance Equity delivered
a 140 per cent return, while Birla Advantage gained
133 per cent. After that, till May 17, Birla suffered
a sharper fall. Since then, both have posted equally
good returns. During this while, Birla's investment
management team has been reshuffled many times,
while Alliance has stuck to the same team, more
or less.
On the debt side, Alliance has been a conservative
manager, while Birla has been disciplined. So
Alliance's debt investors have little to worry
about.
The new entity, with 17 equity and 30 debt funds,
will have some duplication. It will be a challenge
for Birla to have a clear positioning and keep
up performance, especially for the equity funds.
That would need a stable team. So it would be
best for Alliance investors to wait and watch
awhile. On the brighter side, they can choose
from a bigger basket and enjoy a larger distribution
network.
|
|
|
| TRAI's audit
billing initiative |
|
Anup Jayaram
|
|
|
THE Telecom Regulatory Authority's (TRAI) new
initiative may put an end to your phone bill woes.
It will introduce audit of billing systems of
various service providers by the year-end.
Trai seeks to tackle the problem of billing, following
a series of complaints. The audit of billing systems,
a practice that telecom regulators around the
world have put into place, will help iron out
flaws and discrepancies. It will look into a variety
of areas. All faults will have to be cleared within
24 hours, the call drop rate should be under 3
per cent, more than 95 per cent of connections
should have good voice quality, and billing complaints
per 100 bills should be below 0.1 per cent.
Trai's monitoring of service providers showed
that the billing parameter is far below the quality
of service norms, and operators need to focus
on this aspect. An IMRB survey shows that almost
all operators have problems. While all of them
have billing problems, BSNL has the most problems
across circles, according to the survey.
|
|
|
| Pay IT online |
|
Ashish Aggarwal
|
|
|
IDBI Bank has launched India's first-ever online
tax payment facility with the support of the Central
Board of Direct Taxes (CBDT) and the National
Securities Depository. To pay taxes, log onto
https://tin.nsdl.com/etax. Once there, choose
whether you want to pay income tax, corporate
tax, or wealth tax. That isn't all - other than
self-assessment tax, you can also pay advance
tax and tax on regular assessment.
But first, you need to be registered for IDBI
Bank's Internet banking facility. To sign up,
IDBI customers need to submit a form and they
are promised a user ID and a password within 10
days.
On 30 September, in a first-of-a-kind outsourcing
effort, the CBDT allowed chartered accountants,
advocates, employers who deduct tax from salaries,
and registered companies to function as e-return
intermediaries. At first, registered e-return
intermediaries in 60 cities will be authorised
to receive paper returns, digitise them, and electronically
transmit them to the Income Tax department under
digital signatures.
Other banks, too, are expected to offer the e-tax
facility soon. But given that the last date for
filing returns this year is 31 October, it seems
IDBI customers will be the only ones availing
of this facility this time around.
|
|
|
| Get
Unique ID |
|
Ashish Aggarwal
|
|
|
FROM 1 April 2005, investors carrying out deals
of Rs 1 lakh or more will have to quote their
Unique Identification numbers (UIN). It's part
of Sebi's efforts to build a database of investors
and brokers. As on 20 October, 49,590 persons
had been allotted UINs. The database lets investors
see if an intermediary is facing disciplinary
action.
Applications forms are available at https://mapin.nsdl.com.
The fee of Rs 300 is payable by demand draft to
'Sebi a/c mapin database'. Investors will have to
visit points of service (PoS) to provide fingerprints
for registration. |
|
|
SIP's
the way
Rachna Monga
From 1 October, equity-oriented mutual funds have
come under the ambit of securities transaction tax
(STT). The finance ministry had initially said that
the STT of 0.15 per cent would be levied every time
an equity fund investor trades in units, and has
to be shared equally between the buyer and the seller.
This would have meant an additional 0.30 per cent
cost for the investor. However, a clarification
says that an STT of only 0.15 per cent would be
levied and that too only when you redeem your units.
This, in a way is bad news, because you pay a lower
STT, but on an enhanced value (assuming your investment
in the fund appreciates).
There is a smart way out: systematic investment
plans (SIP). Here, most equity funds don't charge
entry load. But any redemption within a year attracts
an exit load of 2.25-2.50 per cent, plus the STT
charge. Stay invested for more than a year and avoid
exit load or capital gains tax - yes, that's exempt
too. |
|
|
|
Who
is investing?
That's the question anyone
looking at the assets invested
in our stockmarkets would ask.
Well, the RBI data on 'Financial
assets of the household sector'
answers it partly, but it also
throws up more questions. It
shows that Indian households
invested just 1.81 per cent
of their financial assets in
2003-04 in equity. In the preceding
financial year, they had invested
2.12 per cent. And this fall
in the share is despite buoyancy
in the stock markets.
So who opened so many demat
accounts? Who subscribed to
the big IPOs? Who actually invested
in the mutual fund IPOs that
showed increased participation
of the retail investor? The
answers aren't in the same data.
What is known is that bank fixed
deposits, despite their meagre
returns, remain the first choice
for household investors.
It shows that the regulator,
advisors and intermediaries
have a lot to do if a broad-based
equity investment culture is
to be founded in India.
|
NSE
reduces cash payments
The National Stock Exchange
has decreed that all its trading
members will have to receive
payments by account-payee, crossed
cheques or demand drafts, or
by direct credit to their bank
account through an electronic
fund transfer facility.
This would be also applicable
for payment of mark-to-market
settlements for futures. Only
in exceptional cases can a trading
member receive cash. But then,
under the income tax laws, that
is to be capped at Rs 20,000.
|
|
|
|
More
home loan options
Confused between fixed and floating
rates? Banks are announcing
options that allow you to go
for both. After HDFC's latest
plan, with which you can break
the loan into fixed-and floating-rate
parts depending on your outlook
and risk-taking ability, LIC
Housing Finance has also come
out with another option.
In its latest plan, borrowers
can decide if they want to stay
with a fixed rate or shift to
the prevailing floating rate.
The rate of interest will be
fixed at 8 per cent for a 20-year
loan, while corporate clients
can avail a 20-year loan at
a fixed rate of 7.75 per cent.
Currently, LIC Housing Finance
is offering loans at a floating
rate of 7.5 per cent for individuals
and 7.25 per cent for corporate
clients.
|
|
|
|
BSE's
weekly options
BSE recently launched India's
first-ever weekly options. A
fresh contract of two weeks'
maturity is now available every
week. Hence, an investor will
have, on any Monday, a choice
of either a
1-week option or a 2-week option.
Weekly options command a lower
premium compared to the longer-duration
ones. But BSE has not offered
simultaneous weekly futures
and that is affecting their
popularity. Investors generally
trade in futures and options
in combination - like buying
a future and selling a call
option.
To start with, the trading is
available for only Sensex and
select scrips.
|
|
|
Banks
must disclose more
RBI has asked banks to
publicly disclose the penalties
and strictures or any other adverse
finding it passes after inspection,
or otherwise. To make sure you
know what is happening at your
bank, the RBI will issue a press
release detailing the circumstances
in which the penalty has been
imposed.
Further, the bank has to disclose
the same in the 'Notes on Accounts'
published in its next annual report.
Even foreign banks will have to
make similar disclosures in their
balance sheet for their Indian
operations. |
|
|
|
|
| |
|
|
