FMP are low-risk, close-ended debt funds, with maturity of three months to five years. FMPs are the best tax efficient way of investment in the month of March. Investors in the highest tax bracket can invest in 13 months FMP growth schemes (not the dividend payout). The maturity will be in the month of April of next to next financial year and the capital gain will be long term in nature. Investors will get benefit of double indexation (indexation for two years). The current FMP schemes will give yield of about 9% and with the benefit of double taxation, the tax implication will be practically zero. Hence, investors can earn about 9% tax free returns.

High interest rates push FMPs in limelight
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Source: The Economic Times

UTI Mutual Fund today launched UTI Gold Exchange Traded Fund (Gold ETF), an open exchange traded fund, becoming the second fund house in the country after Benchmark AMC to offer ETF.

The gold ETF would be a ‘passively managed’ open-ended fund, through which investors can buy or sell gold units on the exchange. Each unit would be backed by physical gold held by the custodian.

The load structure will vary from 2.5% to nil for increasing investments during the NFO period.

The fund will invest 90-100% of the corpus in gold and 0-10% in money market instruments and other debt securities.

The New Fund Offer (NFO) of the UTI Gold Exchange Traded Fund will be open from 1st March 2007 to 12th March 2007.

UTI to launch Gold Exchange Traded Fund NFO
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Source: Equity Bulls

UTI Mutual Fund launches Gold ETF
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Source: Moneycontrol.com

UTI Mutual rolls out gold ETF
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Source: Business Standard

Gold BeES is an open-ended passively managed Exchange Traded Fund (ETF), launched by Benchmark Mutual Fund. The fund is designed to provide returns (before expenses) that closely correspond to the returns provided by the domestic price of gold.

Summary
Type: Open-ended ETF – Gold
Min. Investment: Rs 10,000
Face Value: Rs 100
Entry Load: 1.50%*
Exit Load: Nil
Issue Opens: February 15, 2007
Issue Closes: February 23, 2007

* 1.5% entry load for investments between Rs 10,000 – Rs 4,999,000; 1% for Rs 5,000,000 – Rs 19,999,000; 0.50% for Rs 20,000,000 – Rs 49,999,000; Nil for Rs 50,000,000 and above.

Personalfn.com’s view on Gold BeES (ETF)
Here’s our view on the country’s first Gold Exchange Traded Fund as it makes its entry into the mutual fund industry
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Source: Personalfn.com

As per ther recent research report by Merrill Lynch, with the growth of around 150% year-on-year, the valuations of most insurers have silently grown by between 20% and 60%, and are poised to more than double by 2010.

The share of life insurance sector premiums is expected to rise from 2.6% of the GDP to 5.5% in the next three to four years.

The report ranked ICICI Prudential Life on top of the valuation’s list of private life insurers.
By 2010, valuation of ICICI Prudential is estimated to go up to $9,304 million, HDFC Standard Life to go up to $2,724 million, Max New York Life at $1,638 million and Bajaj Allianz at an estimated $2,035 million.

Indian promoters of almost every private life insurer – be it ICICI Bank, HDFC Bank, Bajaj Auto or Aditya Birla Nuvo – are enjoying better valuations because of their shares in life insurance joint ventures.

Insurance valuations set to double by 2010
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Source: Sify Business

Insurance valuations set to double by 2010
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Source: DNA

Too high a premium on life
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Source: The Economic Times

With the Reserve Bank of India (RBI) raising the cash reserve ratio (the funds which banks are supposed to maintain with RBI in the form of cash) by 50 bps to 6%, the lending rates are expected to shoot up further, at least, by another 25-50 bps.

As a result of this, home loan rates may go up and consumer credit may slow down. Experts believe that as a result of RBI move, stocks like PSU banks, real estate and autos will see a fall.

RBI move could dampen equity markets: JP Morgan
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Source: Moneycontrol.com

CRR hike may kill your home and car dreams
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Source: The Economic Times

RBI steps on brake again
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Source: Financial Express

RBI acts to rein in inflation
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Source: The Hindu Business Line

CRR: Avoid interest rate sensitive sectors
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Source: Moneycontrol.com

Market is euphoric about demerger story. Simply because, the sum of parts usually turns out larger than the combined entity, as in the case of Reliance Industries, Zee & TV 18.

Bajaj Auto is planning to separate its auto and other (insurance, financial services & part of investments) operations into separate entities.

Analysts are valuing Bajaj Auto’s insurance business at Rs. 750 per share, its investment portfolio at market value as on December 2006 at Rs. 837 per share. This leaves the balance Rs. 1460 as the value for core business at current levels.

Rahul Bajaj, chairman of Bajaj Auto has denied the news report saying that the Bajaj brothers are in a fight.

Demerger decision likely after May only: Rahul Bajaj
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Source: Moneycontrol.com

Unlocking value
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Source: DNA Money

Summer rollout likely for Bajaj Auto demerger plan
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Source: The Economic Times

Bajaj to park Rs 6,000 cr in new investment firm
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Source: Business Standard

Rahul Bajaj’s sons go own ways
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Source: The Indian Express

Samir Arora, fund manager, Helios Capital Management wants to push India to the investors around the world. In spite of high PE and slowdown in privatisation, he feels that the listed stocks on Indian stock markets are of much higher quality & much more diversified than the choices in the other market. He justifies India’s high PE to the fact that India has the lowest weightage of generically lower PE sectors like oil & gas, commodities, paper & chemicals and the highest weightage of generically higher PE sectors like consumer, pharma & software vis-à-vis the other emerging markets.

India Bull
A self-confessed ‘India bull’, Samir Arora, fund manager, Helios Capital Management, wants to push India to investors around the world.
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Source: Value Research

India’s wholesale price index rose 6.58 percent in the 12 months to Jan. 27, the biggest rise in more than two years.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it has covers a higher number of products and is published weekly.

Finance Minister P Chidambaram said on Thursday that the government was committed to moderate the rising inflation.

Inflation hits two-year high at 6.5%
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Source: CNN-IBN

Inflation’s highest rise in 2 yrs
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Source: The Financial Express

Govt to let Re rise to bring inflation down
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Source: The Economic Times

As per the latest figures released by the Central Statistical Organisation (CSO), India is set to join the big league of trillion-dollar economies as early as next year. There are nine countries in that club now. India’s $854 billion economy is poised to grow 9.2%, after touching 9% last year.

India projects economy to grow 9.2 pct.
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Source: BusinessWeek.com

GDP growth of 9.2% projected for 2006-07
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Source: The Economic Times

India is on threshold of trillion-dollar club
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Source: DNA – Money

The bright side of growth… and the dark
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Source: Financial Express

With the introduction of Fringe Benefit Tax, what employers can do to make friendly salary package for their employees?

Subhash Lakhotia, tax and investment consultant at New Delhi, in his article in Moneycontrol.com provides guidelines for every corporate to plan salary and perquisite packages for its employees.

Ask your boss for a tax friendly salary package
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Source: Moneycontrol.com