CONTENTS
LETTER
ISSUE CONTENTS
1 4 June 2012 14
FROM THE
EDITOR
T
Debashis Basu MONEYLIFE | 14 June 2012 | 10
POPULAR PICKS
Vanishing Investors: Will SEBI Take Radical Decisions?; Tax Laws: Making Up with Vindictive Action; PSU Listing: A Game Plan To Exploit Investors?
Sideways he markets are experiencing extraordinary times. Valuations look attractive. But the rupee has gone for a toss; the European Union is going through a tumultuous time; and the global economy isn’t looking great either. The market is down to the same levels as witnessed in 2011. Is there a bull or bear market in the offing? What if it is neither? Investors are confused and lost. What can they expect now? We explain what to do when the market moves sideways over long periods of time. In our Fund Pointer section, we evaluate the portfolio we had constructed, in November 2011, comprising a selection of the top-picks from the portfolios of top performing mutual funds, and see how it has fared. The portfolio has outperformed, in line with the Sensex; so we review it afresh. We have increased the number of stocks; that brings in more diversification— and hopefully better performance. In our previous issue, we had commenced two new sections—Value Picks and Stock Review. We have started another section, titled ‘Popular Picks’, which consists of widely held stocks that our readers might be interested in, even if we ourselves do not consider these to be the best stocks to buy. Turn to page 44 to find out more about this new section. In the Different Strokes section, Sucheta Dalal discusses, in the light of the Hampi rail disaster, how our politicians have callously ignored safety issues of the Indian Railways which affects the aam admi, for whom their heart otherwise bleeds. Moneylife Foundation successfully hosted an event with the Insurance Development Regulation Authority (IRDA) chairman J Hari Narayan. The Foundation and its members held frank discussions with him and submitted a memorandum to him on behalf of our members and readers. We have a write-up on this event and interactions with the chairman for those who could not attend it. The fact that he has agreed to look into our memorandum is a testimony to the strength of Moneylife Foundation’s members. We request you to ask your friends and relatives to join Moneylife Foundation to make it even stronger. Please spread the word to strengthen the voice of savers.
18 DIFFERENT STROKES
40 Popular Stocks
Films: 50 Tinted Clean Up Job
Our views on the most widely held stocks
– Toyota: India Strategy – Fuel adulteration: Smoke & Fire – Vehicle Sales: Clear Slowdown
STOCKS REVIEW
20 Death Trap
Our 41 Track Selections
Is railway safety ignored because it is a middle-class issue?
Introduced two new stocks tocks in our Stock Review portfolio o
SMART MONEY
26 Cover Story Investing in Sideways Markets The Sensex today is the same as it was in September 2007. This is frustrating but a common occurrence. Unless something dramatic happens, the equity market can move sideways for years. Debashis Basu & Aditya Govindaraj analyse how to invest in these situations
13 Your Interest Airtel tops in poor telecom services; Defined share in residential property for women after divorce; HDFC penalised by consumer court; UP government official awarded jail term by consumer court; Government to act as Big Brother?
14 Your Money Second-hand Property Preferred: Study; Homes Most Affordable Now ; Gold Demand Falls 29%; Drop in Numbers: Survey; NBFCs Giving Gold Loans; Double Home Loan Cap
16 Current Account European banks are busy selling put warrants
17
LOOSE CHANGE
22 Faith Accompli Credit rating serves a useful purpose but its severe limitations need to be understood
STOCKGRADER 42 Medium Term
Foseco gained 6%, Kansai Nerolac Paints rose 2%, while Amara Raja Batteries, Atul Auto both fell 4%
Long Term
FUNDS
Stocks 24 Best from Top Funds A review of how the portfolio has performed by Jason Monteiro and the new suggested portfolio STOCKS VALUE PICKS
32 InsOuts& Rural Electrification Corporation and Jammu & Kashmir Bank are new entrants to the list
Divi’s Laboratories shot up 14%, while GSK Consumer fell 5% while Piramal Healthcare dropped 4%
INSURANCE
46
The IRDA Chairman at Moneylife Foundation
IRDA chairman, J Hari Narayan, spoke on a wide variety of issues at a packed Moneylife Foundation event on 16 May 2012. Excerpts of the interaction by Raj Pradhan AIR TRAVEL
STOCKS
36
Street Beat
– Hyderabad Industries: Strong Sales – Gujarat Reclaim and Rubber Products: Highly Elastic
t from 48 Bene Airline Alliances Airlines frequently band together to offer flyers of another airline facilities and benefits they’d usually offer to their own customers. How can you benefit from it?
39
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.
The economy will not improve on its own; and this government can’t do much
More Pain Ahead
HEALTH
& 52 Prayer Healing – There are remarkable benefits to human health from praying, especially praying for others – Pulse beat: Medical developments from around the world TRAVEL
54 Interlaken: Soul-Stirring For countless visitors to Switzerland, Interlaken is both the finale and starting point of their dream holiday, says Naveena Israni LEGALLY SPEAKING
Is Your 57 ItMoney Senior citizens often get duped for not taking enough care. Here are two instances ML FOUNDATION EVENTS
of health 60 “50% insurance claims are
settled within 60 days”
IRDA chairman J Hari Narayan shared his thoughts on ‘Sensible Health Insurance for All’ BEYOND MONEY
Fight 66 Helping Multiple Sclerosis Multiple Sclerosis Society of India aims at raising awareness on the rare disease and counselling patients.
WHICH WAY
Moneylife Quiz; Soundbites
AUTO
OPINION
Auto 49 Foreign Companies Taking Us for a Ride?
DEPARTMENTS Letters ............................ 4 Book Review ....................58 Money Facts ....................63