CONTENTS
LETTER
ISSUE CONTENTS
FROM THE
17 November 2011
EDITOR
20
LEGALLY SPEAKING
Your 48 Choose Advocate Carefully
Gag order: SEBI vigilance note shows the rot within; Consent orders: Pay a pittance, get away; Jindal: 10-year itch: Bellary ban—final straw?
If your barrister fails you, judicial redressal is a viable option
Superfund DIFFERENT STROKES
W
e have some excellent equity-diversified funds in India; they have done very well for investors over the past decade. But their portfolios look pretty similar, full of blue-chip stocks like Infosys, ITC and HDFC. Many of these stocks would not fetch great returns. We wondered what if we were to use our stock-picking methods to eliminate some of these and pick the better quality stocks from among the portfolios of these funds. Information about the portfolios of mutual fund schemes is available to the public at the end of each month. We picked the top 10 holdings of each and then selected the stocks that look excellent to us. The result is the Cover Story of the current issue. We would track this concentrated portfolio to see whether they do better than the average of the top funds. This portfolio will help you weather what looks like a looming storm. Global headwinds are a little too strong for a sustained market rally; it’s time to fortify yourself and gear up for a long entrenched battle. The story of Pune-based RTI (Right to Information) activist Vijay Kumbhar, who literally risked life and limb to bring the mighty to heel, has been described in this issue. There are many such unsung heroes in our country; Moneylife would like to know more about them. If you don’t (or can’t) write in, do call us at our Mumbai numbers so that we can feature many more such cases in our forthcoming issues. The Moneylife Foundation has been conducting a number of events—so wide in scope—that we may actually have to bring out a separate publication which features only the Foundation’s activities! A number of pages have been devoted to the packed fortnight that we have had. I end with a special call to HR managers. We are looking out for interns who can complete a pre-summer placement assignment with us, preferably in personal finance—budding economists and market specialists are also welcome. We’ll give interns detailed, time-bound projects, and a certificate to students who complete the assignment successfully. Since we have ventured beyond print, and we have a vibrant Web platform and Moneylife TV too, young media professionals in all fields are welcome. Debashis Basu MONEYLIFE | 17 November 2011 | 10
Strings 22 Purse Attached We should think twice before attacking Kiran Bedi for having taken donations ‘improperly’ SMART MONEY
30 Cover Story
Best Stocks from Top Funds
What if you could pick the best of stocks from the holdings of top-performing funds? Debashis Basu with Megha Vora and Pratibha Kamath draw up such a list
13
24
SEBI’s Muddled Idea
The current regulations may sound the death knell for the mutual fund industry
Your Interest
14
18
Current Account
Vietnam transport minister swings at his officials; Russia: Will the bald-hair succession rule hold true?
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.
HDFC Bank and Titan ended flat, while Chambal Fertilisers plunged 11%
Medium Term
3M India gained 1% and Titan ended flat, while Supreme Petrochem tumbled 9%
Long Term
Lupin gained 6% and Marico rose 3%, while AkzoNobel India declined 11% and Emami lost 2%
44 Insurance Trends FUNDS
Savings interest rate: Deregulation to benefit depositors; Hiring down; SEBI’s advisory panels; Web surfers search the most for phones; Indians’ average wealth triples; Post offices to offer more services; Loans: No prepayment charge; India’s second-most fraud-prone nation; New Launches: SBI launches NRI services; DCB Bank’s Payless Credit Card; RuPay in March; OBC-SBI Card; Allahabad Bank to offer online services; IDBI Bank’s fixed interest loan; SBI Foreign Travel Card; 1st gold & diamond ATM
Momentum
INSURANCE
Small savings to get a boost; Use cell phone to check if your medicines are genuine; India: The most corrupt nation; Quash consent orders; Equal property rights for married women; 2.1 million bogus students
Your Money
STOCKGRADER 39
26 Fund Pointers – Putting a lot of money in liquid funds? Think again – Will Baroda Pioneer Sensex Plus do better than the Sensex?
AUTO
STOCKS
35
– L&T Insurance’s novel scheme – You can now revive ULIPs within two years – Oriental Bank’s low-cost option – Nielsen’s dubious study – “There are grey areas in mediclaim portability guidelines” — Bharti AXA General – Fine Print: PAN for Rs50,000 cash payment of insurance premium; HDFC Life fined Rs5 lakh
Street Beat
Hyundai 46 The Eon
Asahi Songwon Colors Ltd: Sustained performance improvement, good clientele; Everest Industries: Good growth plans in a profitable industry
38
The market rally may flatter to deceive
50 Relentless Crusader Dogged campaigns by Pune-based activist Vijay Kumbhar have made a tremendous impact, finds Vinita Deshmukh TRAVEL
and Spiti: 52 Kinnaur Back in Time Jaideep Mukerji gives a glimpse of an ancient culture that is fast disappearing SAVING AND INVESTING
57 Risk Profiling No one has a fixed tolerance for risk ML FOUNDATION EVENTS
the 58 RTIWayandForward “Public authorities have failed at voluntary disclosures of information because there are no guidelines,” says Wajahat Habibulla, former CIC BEYOND MONEY
66 Creating Achievers Sujaya Foundation teaches underprivileged children and helps youth get jobs, reports Shukti Sarma
DEPARTMENTS
WHICH WAY
The More It Changes…
POWER OF ONE
It may notch up the numbers, but competition is going to be fierce, says Veeresh Malik
Letters............................. 4 Book Review.....................60 Living .............................62 Money Facts.....................63