CONTENTS
LETTER
ISSUE CONTENTS
FROM THE
15 December 2011
EDITOR
T
Debashis Basu MONEYLIFE | 15 December 2011 | 10
Legally Speaking
in 51 Delays Filing
Cyrus Pallonji Mistry: Ratan Tata’s successor is no surprise; Kingfisher Airlines: Why is Mallya unfazed? Is SEBI’s consent order system illegal?
Safe, but Smart? hey come with promises to deliver a steady income after your retire. That’s what you want too, right? But are pension plans offered by life insurance companies and mutual funds worth buying? Read Moneylife’s detailed and unbiased research on the topic on page 26, one of the first of its kind. The turmoil in the financial world is affecting us deeply. Within a year, homeloan rates have jumped from 9.50% to 11%-12%. This has put many borrowers in a dilemma. Do you extend your loan tenure, or would you rather go for an increased EMI? Moneylife suggests the wiser option. The stock markets are sharply down. Should you step in to buy or play safe and put your money in fixed-income products? Our columnist, R Balakrishnan, who has seen many market cycles, is clear in his advice: it’s still not the right time to invest in stocks. Fixed-income products are better options. On another note, the government has just announced higher interest rates for public provident fund. One can safely put away a lakh of rupees each year and earn tax-free returns of 8.6%. Is there a rationale for investing in ‘dynamic bond funds’? Moneylife’s analysis of such funds since inception reveals that their performance is nothing to write home about. Another myth busted. In the insurance section, we review several new products and bring you the truth about them which no intermediary or media company is interested in telling. Moneylife Foundation’s seminar on cooperative housing societies was a roaring success. There was standing room only. Veteran property lawyer Vinod Sampat demystified several issues pertaining to re-development projects, conveyance and legal compliance and patiently answered individual questions for more than an hour later. Our screening of the documentary “Brokering News” drew well over 250 people and the hall was packed to capacity. Read about these events on page 58 and make sure you don’t miss out on our forthcoming seminars and events. If you want us to conduct seminars at your premises (at least 200 people) do let us know.
20
What is ‘sufficient cause’? The law is liberal as the circumstances of each case are different
Different Strokes
Case of the 22 The Curious Litigation The PIL on top SEBI appointments raises too many questions
FUNDS
26 Cover Story Do You Need Pension Products?
24 Fund Pointers Dynamic Bond Funds: Is there a reason to invest in them?
Everyone wants to have adequate funds in their retirement years. Raj Pradhan explores whether pension products offered by life insurance and mutual fund companies are safe and smart options
13 Your Interest
Use of cards; MFs: Consolidated statement; Equity schemes net dips 85%; Bajaj Finserv to enter MF business; 15% workers invest for retirement; Online forex trade payments; Deregulation of savings rate; Pre-payment charges on home loans waived; 50% of Indians feel inheritance is a burden; Credit score: Online authentication; SBI, Moneygram to offer cash remittances facility; New mobile wallet; New Launches: F&O for CNX PSE, CNX Infra; BSE’s Index for Climate Change; Fast Gold Loan
18
Current Account
Companies that Gisele Bündchen endorses, beat the Dow hollow
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.
Momentum
Federal-Mogul Goetze gained 1%, while Shree Renuka Sugars dived 40% and Power Grid fell 9%
Off Shares 36 Keep for Now Fixed-income products are far more attractive
– A film on paid news leaves the audience shocked
Idea Cellular ended flat, while Titan plunged 12% and Petronet LNG fell 7%
Long Term
Marico rose 2%, whereas Gujarat Fluorochemicals tumbled 20%
46 Insurance Trends SMART MONEY
58 Moneylife Foundation Events
Medium Term
INSURANCE
UIDAI & its endless problems; SBI: Highest unhappy customers; Ayurvedic medicine: Is it safe? Circuit filter on listing day; Gear up for high power tariff
14 Your Money
STOCKGRADER 41
EVENTS
– Bharti Axa Future Invest: When zero is not zero – Future Generali Secure Income: Almost a whole life plan – “Online term insurance has become a commodity” — Max New York Life – Fine Print: Future Generali Life warned; Senior agents to mentor? Comparison sites killed
– On conveyance & re-development of cooperative housing societies – The Foundation conducted a seminar on mutual funds
Travel
of 60 Crossroads Cultures Situated on the north-west of the Indian subcontinent, the picturepostcard beauty of Kashmir valley is breathtaking, finds Jaideep Mukerji
BEYOND MONEY STOCKS
37
AUTO
Street Beat
Karur Vysya Bank: One of the finest Indian banks; Shriram City Union Finance: Big growth from small businesses
WHICH WAY
48
Made in China
Indian firms have been quick to beat the Chinese brands, finds Veeresh Malik
Borrowing: Home Loan
40 Going Nowhere
Rising 50 Combating Interest Rates
As suggested, the market rally did flatter to deceive
The safe and smart way to reduce your home loan burden
Water, 66 Save Save Nature Gangajal Nature Foundation spreads awareness about water pollution, through the medium of ‘Gangajal photo exhibition’
DEPARTMENTS Letters............................. 4 Book Review.....................54 Living .............................56 Money Facts.....................63