CONTENTS
LETTER
ISSUE CONTENTS
FROM THE
1 December 2011
EDITOR
MONEYLIFE | 1 December 2011 | 10
Issue 52 Public without Going Public Sahara companies show the way SAVING AND INVESTING
DIFFERENT STROKES
T
Debashis Basu
LEGALLY SPEAKING
Resurgere Mines: How does this company escape investigation? Niira Radia: An extraordinary run; Is media aware of what its audience thinks?
Traditional Returns raditional insurance products, like moneyback and endowment plans, are making a comeback. The acting chairman of Life Insurance Corporation of India wants them to be the dominant part of the LIC’s new sales as opposed to unit-linked insurance plans (ULIPs). But are they safe and smart for you? Not exactly. There are multiple problems with the traditional plans. They are opaque. Moneylife throws light on them, in what is the most comprehensive analysis of such plans. Has the whirlwind coverage of the F1 races in Noida left you confused? Now, get the inside picture of the star-studded affair from our correspondent who points out how the tax-payers’ money went up in smoke; without providing warmth to those who needed it. As global markets become more volatile, it is natural that parents will look for good investments to secure their children’s future. But how good are these investment products? Our analysts find that select equity diversified funds have offered better yields compared to mutual fund schemes meant for parents. As we always say, simplicity is golden. In the insurance section, be sure to learn about new ULIPs, term insurance plans and revised pension guidelines. Also, keep track of developments in the motor insurance space. Puzzled over mediclaim? Moneylife brings you an interview with the doyen of general insurance industry, Fali Poncha, who offers invaluable insights into cashless treatments, and on dealing with TPAs (third party administrators). Moneylife Foundation held informative seminars on senior citizens’ issues and mutual funds, which opened to jam-packed audiences. While discussing traditional financial products like fixed deposits, insurance and stock investing, we also talked about new options like reverse mortgages and special services like retirement homes. Watch out for more such useful events and don’t forget to become a Moneylife Foundation member (it’s free) so that we can let you know about them in advance.
20 Away 22 Getting Easily
STOCKGRADER 43
Investigation into financial scandals never leads to logical punitive action
Momentum
SMART MONEY
28 Cover Story Just 2% from your life insurance?
Cost of 24 High Higher Interest RBI’s action of pushing up interest rates on savings accounts is fraught with peril
After ULIPs fell from grace, traditional plans are selling fast. In another first from Moneylife, Raj Pradhan exposes the terrible returns from traditional plans that customers seem oblivious to
13
14 Your Money Banks not to honour cheques beyond 3 months; Banks must issue savings account passbook; RBI raises housing loan limit for UCBs; New rules for NRIs; MFs to disclose big distributors on websites; Employees prefer mobility over money in jobs; Lower hiring in October; More mobiles than humans; Online shopping survey; New Launches: E-payment gateway; Birla Sun Life’s Khushaali ki Gaadi; BSE to launch Nasdaq EFT soon
18
Current Account
Christmas-tree Tax: Be Prepared for More
19 LOOSE CHANGE Moneylife Quiz; Soundbites Disclaimer: Moneylife has a policy of not allowing its editorial staff to buy and sell stocks that are written about in the magazine. All personal transactions in individual stocks are subjected to internal disclosure rules.
US bonds beat stocks over 30 years. Was it a freak happening? Debashis Basu throws some light OPINION
Medium Term
Insurance 58 Noagainst Mis-selling
Long Term
Mis-selling is rife in all financial products, mainly insurance. Regulation to rein in ‘advisors’ is long overdue
Akzo Nobel jumped 4% and Petronet LNG climbed 2%, while Sun Pharma tumbled 4% HUL surged 12% and Asian Paints rose by 2%, whereas Diamines and Chemicals plunged 15%
EVENTS
INSURANCE
Your Interest
Killing costs of healthcare; High scores to blame for suicides? Uniform stamp duty for stock transactions; Consumer court holds doctor guilty; I&B wants declaration of TV show calls/SMS
Prime Focus soared 9%, Indraprastha Gas rose 5%, while PI Industries tumbled 10%
Vs 53 Stocks Bonds
48 Insurance Trends FUNDS
26 Fund Pointers – Children’s Schemes: Mutual funds specifically targeted at parents have not worked – Axis Focus 25: Theoretically right, practically tough STOCKS
– Edelweiss Tokio Life’s new plans – DLF Pramerica’s ‘U-Protect’ – “We don’t suggest cashless policies” — Fali Poncha – Fine Print: Nominee name needed; Revised pension guidelines; Will motor insurance go up?
50 F1:WhoWhoLost?Won, BEYOND MONEY
66 Education as Mission
Gujarat Gas: A proven long-term story; Bajaj Finance: Retail finance is expected to grow at a healthy pace; South Indian Bank: Strong financials and good growth prospects
A teacher who doesn’t hesitate to beg, to provide free education, Shukti Sarma reports
DEPARTMENTS
WHICH WAY
Will the Sensex keep gyrating in a 2000-point range for a long time?
– The Foundation had a special seminar for senior citizens – The Foundation conducted a workshop on “How to choose the right mutual fund scheme”
AUTO
38 Street Beat 42 Frustrations Rise
Foundation 61 Moneylife Events
If the F1 races were supposed to have been an exhibition of India’s coming of age in motorsports, think again, says Veeresh Malik
Letters............................. 4 Book Review.....................56 Living .............................60 Money Facts.....................63