CONTENTS
LETTER
ISSUE CONTENTS
12 January 2012
FROM THE
EDITOR
W
Debashis Basu MONEYLIFE | 12 January 2012 | 10
EVENTS
53 Moneylife Foundation Events
Politicians continue to strengthen their grip over media; Pro-Bhave PIL will probably be buried now; How SEBI sleeps over obvious connections
A New Era e ring in the New Year with our annual issue of Wealth Creators in which we identify and evaluate the top wealth creating firms. What makes a wealth creator? Our team dissected 10 years of data and came up with interesting findings. We learn that the key ingredients for you are: buying cheap and having a long-term view. Complementing the Cover Story, our columnist, R Balakrishnan, offers insights into what kinds of returns to expect from different asset classes. Are our media becoming too powerful and corrupt? With politicians and powerful figures taking large swathes of ownership of certain media properties, it won’t be long before the news we consume becomes untrustworthy. It already is. Find out more in our Crosshairs section. Auto aficionados will be surprised to learn from Veeresh Malik, that the Auto Expo, to be held in the first week of 2012 in New Delhi, isn’t really about cars (and pretty women). Turn to page 50 to find out what really happens behind the scenes. Itching to travel to the wild frontiers of China? Jaideep Mukerji discovers Yunnan Province, which is known as ‘City of Eternal Spring’, situated in the relative unknown south-west of the country, and shares with you its fascinating culture, history as well as its picturesque landscapes. We have witnessed some extraordinary events at SEBI (Securities and Exchange Board of India) over the past one year, most of which have embarrassed the government. Sucheta Dalal explains in detail and concludes that the watchdog has a lot of work on its hands to clean up its act. Moneylife would like to wish all its readers a very happy and prosperous New Year! Moneylife Foundation crossed an important milestone of hosting 100 seminars in December. We thank you for supporting us, literally from concept to creation, in our efforts to empower you—the savers—through the Foundation’s initiatives in financial literacy. And providing unbiased information and insightful analysis through Moneylife remains the bedrock of this effort. We hope you enjoy our first issue of 2012. Happy Reading!
22
– Tax expert Anil Harish, spoke on investing smartly abroad
DIFFERENT STROKES
24 Muddling Along
STOCKGRADER 43
SEBI faced its worst credibility crisis last year. Will 2012 be different?
Momentum
SMART MONEY
28 Cover Story
26
Wealth Creators: 2002-11
What works best over the long term?
Creating Wealth
The past 10 years show that companies that have created immense wealth were in capital goods, commodities and consumer goods sectors and were going cheap
Mobile wallet service; Guidelines regulating advisors; Cheque transactions dip; Contribute to company benefit schemes; Household inflation 13%; Any Time Money Card; CBI waives pre-payment charges; Credit card deals up; 2011 Highlights: Sub-brokers to do ‘in-person’ check; M-wallet limit raised; NRIs can hold money in any currency; Credit card complaints top list; Refund failed ATM transactions in 7 days; Housing loan limit Rs30 lakh; Abolish pre-payment penalty; Penalty on early closure of FDs; TDS certificates should be sent to bank customers
Aventis Pharma rose 1%, Gujarat State Fertilizers dipped 20% and Repro India declined 7%
Long Term
INSURANCE
Airline made to pay for missing luggage; 39,123 corrupt officials punished in 3 years; $700mn annual bribe for land-related services; Consumer confidence fell in September; RTI invoked to expose bank fraud; Investors not to pay for maintaining KYC data
14
Medium Term
Hindustan Unilever rose 4%, Berger Paints India fell 16% and Munjal Showa fell 12%
13 Your Interest Your Money
Ipca Laboratories rose 3%, Siyaram Silk Mills slipped 17% and Chambal Fertilisers declined 15%
48 Insurance Trends STOCKS
40 Street Beat Foseco India: Robust growth, reasonably priced; Munjal Auto is bucking the trend
– Kotak Invest Maxima: Expensive ULIP – Bajaj Allianz Guaranteed Maturity Plan: Almost like an FD – “No time limit for filing motor accident claims, but delays require explanation” — Advocate SR Singh – Fine Print: Brokers as claims consultants; LIC policies to continue sovereign guarantee; National Insurance fined Rs5 lakh
AUTO
20 Current Account
50 Number of Issues
Art investing: Pop artists outdo US stocks
High security number plates are a good idea but would it be implemented well?
21 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.
WHICH WAY
42 Struggle for Value What would be the right Sensex level for the bulls to get excited?
LEGALLY SPEAKING
52
No Alternative
Does arbitration simply raise costs?
– Rohan Dukle and Girish Malik spoke on the intricacies of mediclaim and life insurance – Seminar on how to be safe and smart with your money – Journalists discuss the insidious growth of paid news
TRAVEL
A Gateway to 58 Kunming: China’s Yunnan Province Also known as ‘the City of Eternal Spring’, Kunming is characterised by a diversity of cultures and varied topography, Jaideep Mukerji explores
BEYOND MONEY
Healing 66 ATouch Narmada Kidney Foundation not only provides information about kidney diseases but also explains how they can be prevented, Shukti Sarma reports
DEPARTMENTS Letters............................. 4 Book Review.....................56 Living .............................62 Money Facts.....................63