Tax Refund Status Online: Still waiting for previous year’s tax refunds?

If you have filed your tax returns on time and are waiting for a refund, then here is some help to track what may have happened to your tax returns.
The Income Tax Department has put on its website the list of income tax refunds of all salary tax payers which could not be sent to the concerned persons for want of correct address.

Salary taxpayers who have not received refunds for assessment years 2003-04 to 2006-07 can click on the link below and query using the PAN number and assessment year whether any refund due to them has been returned undelivered from the menu `undelivered salary refund management system'. If any refund has been returned undelivered due to change in address, then the taxpayer can enter the present address and the refund will be sent to the taxpayer at the new address.

The link to the website is as under: (Opens in a New Window)

Related: Use RTI and get Tax refund in just Rs. 10!

Toll Free Numbers in India

Here is a useful collection of Toll Free numbers in India. I have not checked all the numbers mentioned below, but dont worry about making a wrong call - as the numbers are toll free, so you dont pay for it even if it is a wrong number :-)

Please note that these numbers may be accessible only through BSNL/MTNL connections. Other networks, not sure!

Toll Free Numbers in India

Toll Free Number of Airlines
Toll Free Number of Indian Airlines - 1800 180 1407
Toll Free Number of Jet Airways - 1800 22 5522
Toll Free Number of SpiceJet - 1800 180 3333
Toll Free Number of Air India -- 1800 22 7722
Toll Free Number of KingFisher - 1800 180 0101

Toll Free Number of Banks
Toll Free Number of ABN AMRO - 1800 11 2224
Toll Free Number of Canara Bank - 1800 44 6000
Toll Free Number of Citibank - 1800 44 2265
Toll Free Number of Corporatin Bank - 1800 443 555
Toll Free Number of Development Credit Bank - 1800 22 5769
Toll Free Number of HDFC Bank - 1800 227 227
Toll Free Number of ICICI Bank - 1800 333 499
Toll Free Number of ICICI Bank NRI - 1800 22 4848
Toll Free Number of IDBI Bank - 1800 11 6999
Toll Free Number of Indian Bank - 1800 425 1400
Toll Free Number of ING Vysya - 1800 44 9900
Toll Free Number of Kotak Mahindra Bank - 1800 22 6022
Toll Free Number of Lord Krishna Bank - 1800 11 2300
Toll Free Number of Punjab National Bank - 1800 122 222
Toll Free Number of State Bank of India - 1800 44 1955
Toll Free Number of Syndicate Bank - 1800 44 6655

Toll Free Number of Automobiles
Toll Free Number of Mahindra Scorpio - 1800 22 6006
Toll Free Number of Maruti - 1800 111 515
Toll Free Number of Tata Motors - 1800 22 5552
Toll Free Number of Windshield Experts - 1800 11 3636

Toll Free Number of Computers/IT
Toll Free Number of Adrenalin - 1800 444 445
Toll Free Number of AMD - 1800 425 6664
Toll Free Number of Apple Computers - 1800 444 683
Toll Free Number of Canon - 1800 333 366
Toll Free Number of Cisco Systems - 1800 221 777
Toll Free Number of Compaq - HP - 1800 444 999
Toll Free Number of Data One Broadband - 1800 424 1800
Toll Free Number of Dell - 1800 444 026
Toll Free Number of Epson - 1800 44 0011
Toll Free Number of eSys - 3970 0011
Toll Free Number of Genesis Tally Academy - 1800 444 888
Toll Free Number of HCL - 1800 180 8080
Toll Free Number of IBM - 1800 443 333
Toll Free Number of Lexmark - 1800 22 4477
Toll Free Number of Marshal's Point - 1800 33 4488
Toll Free Number of Microsoft - 1800 111 100
Toll Free Number of Microsoft Virus Update - 1901 333 334
Toll Free Number of Seagate - 1800 180 1104
Toll Free Number of Symantec - 1800 44 5533
Toll Free Number of TVS Electronics - 1800 444 566
Toll Free Number of WeP Peripherals - 1800 44 6446
Toll Free Number of Wipro - 1800 333 312
Toll Free Number of xerox - 1800 180 1225
Toll Free Number of Zenith - 1800 222 004

Local Call Number of Railways
Local Call Number of Indian Railway General Enquiry 131
Local Call Number of Indian Railway Central Enquiry 131
Local Call Number of Indian Railway Reservation 131
Local Call Number of Indian Railway All Enquiry 139
Local Call Number of Indian Railway Railway Reservation Enquiry 1345,1335,1330
Local Call Number of Indian Railway Centralised Railway Enquiry 1330/1/2/3/4/ 5/6/7/8/9

Toll Free Number of Couriers/Packers & Movers
Toll Free Number of ABT Courier - 1800 44 8585
Toll Free Number of AFL Wizz - 1800 22 9696
Toll Free Number of Agarwal Packers & Movers - 1800 11 4321
Toll Free Number of Associated Packers P Ltd - 1800 21 4560
Toll Free Number of DHL - 1800 111 345
Toll Free Number of FedEx - 1800 22 6161
Toll Free Number of Goel Packers & Movers - 1800 11 3456
Toll Free Number of UPS - 1800 22 7171

Toll Free Number of Home Appliances
Toll Free Number of Aiwa/Sony - 1800 11 1188
Toll Free Number of Anchor Switches - 1800 22 7979
Toll Free Number of Blue Star - 1800 22 2200
Toll Free Number of Bose Audio - 1800 11 2673
Toll Free Number of Bru Coffee Vending Machines - 1800 44 7171
Toll Free Number of Daikin Air Conditioners - 1800 444 222
Toll Free Number of DishTV - 1800 12 3474
Toll Free Number of Faber Chimneys - 1800 21 4595
Toll Free Number of Godrej - 1800 22 5511
Toll Free Number of Grundfos Pumps - 1800 33 4555
Toll Free Number of LG - 1901 180 9999
Toll Free Number of Philips - 1800 22 4422
Toll Free Number of Samsung - 1800 113 444
Toll Free Number of Sanyo - 1800 11 0101
Toll Free Number of Voltas - 1800 33 4546
Toll Free Number of WorldSpace Satellite Radio - 1800 44 5432

Toll Free Number of Investments/ Finance
Toll Free Number of CAMS - 1800 44 2267
Toll Free Number of Chola Mutual Fund - 1800 22 2300
Toll Free Number of Easy IPO's - 3030 5757
Toll Free Number of Fidelity Investments - 1800 180 8000
Toll Free Number of Franklin Templeton Fund - 1800 425 4255
Toll Free Number of J M Morgan Stanley - 1800 22 0004
Toll Free Number of Kotak Mutual Fund - 1800 222 626
Toll Free Number of LIC Housing Finance - 1800 44 0005
Toll Free Number of SBI Mutual Fund - 1800 22 3040
Toll Free Number of Sharekhan - 1800 22 7500
Toll Free Number of Tata Mutual Fund - 1800 22 0101

Toll Free Number of Travel
Toll Free Number of Club Mahindra Holidays - 1800 33 4539
Toll Free Number of Cox & Kings - 1800 22 1235
Toll Free Number of God TV Tours - 1800 442 777
Toll Free Number of Kerala Tourism - 1800 444 747
Toll Free Number of Kumarakom Lake Resort - 1800 44 5030
Toll Free Number of Raj Travels & Tours - 1800 22 9900
Toll Free Number of Sita Tours - 1800 111 911
Toll Free Number of SOTC Tours - 1800 22 3344

Toll Free Number of Healthcare
Toll Free Number of Best on Health - 1800 11 8899
Toll Free Number of Dr Batras - 1800 11 6767
Toll Free Number of GlaxoSmithKline - 1800 22 8797
Toll Free Number of Johnson & Johnson - 1800 22 8111
Toll Free Number of Kaya Skin Clinic - 1800 22 5292
Toll Free Number of LifeCell - 1800 44 5323
Toll Free Number of Manmar Technologies - 1800 33 4420
Toll Free Number of Pfizer - 1800 442 442
Toll Free Number of Roche Accu-Chek - 1800 11 45 46
Toll Free Number of Rudraksha - 1800 21 4708
Toll Free Number of Varilux Lenses - 1800 44 8383
Toll Free Number of VLCC - 1800 33 1262

Toll Free Number of Insurance
Toll Free Number of AMP Sanmar - 1800 44 2200
Toll Free Number of Aviva - 1800 33 2244
Toll Free Number of Bajaj Allianz - 1800 22 5858
Toll Free Number of Chola MS General Insurance - 1800 44 5544
Toll Free Number of HDFC Standard Life - 1800 227 227
Toll Free Number of LIC - 1800 33 4433
Toll Free Number of Max New York Life - 1800 33 5577
Toll Free Number of Royal Sundaram - 1800 33 8899
Toll Free Number of SBI Life Insurance - 1800 22 9090

Toll Free Number of Hotel Reservations
Toll Free Number of GRT Grand - 1800 44 5500
Toll Free Number of InterContinental Hotels Group - 1800 111 000
Toll Free Number of Marriott - 1800 22 0044
Toll Free Number of Sarovar Park Plaza - 1800 111 222
Toll Free Number of Taj Holidays - 1800 111 825
Toll Free Number of
Toll Free Number of Teleshopping
Toll Free Number of Asian Sky Shop - 1800 22 1800
Toll Free Number of Jaipan Teleshoppe - 1800 11 5225
Toll Free Number of Tele Brands - 1800 11 8000
Toll Free Number of VMI Teleshopping - 1800 447 777
Toll Free Number of WWS Teleshopping - 1800 220 777

Toll Free Number of Cell Phones
Toll Free Number of BenQ - 1800 22 08 08
Toll Free Number of Bird CellPhones - 1800 11 7700
Toll Free Number of Motorola MotoAssist - 1800 11 1211
Toll Free Number of Nokia - 3030 3838
Toll Free Number of Sony Ericsson - 3901 1111

Toll Free Number of Others
Toll Free Number of Domino's Pizza - 1800 111 123

Infrastructure Funds: Should you invest in Infrastructure Funds?

You may have seen a lot of funds coming to the markets with their NFO recently - So many of them. Why are there so many funds coming in at this moment?
One reason may be tax savings ad this is the taxing time for the Indian markets. But not all funds give tax benefits. The funds have a lot of variety, ELSS, etc., but the primary domain in which the new funds are being offered is the Infrastructure funds domain.

These infrastructure funds are the ones which invest in the infrastructure companies, either on national or global basis and attempt to benefit from the infrastructure improvement, thereby looking for price appreciation in the infrastructure company stocks in which these funds have invested the investors’ money.

Another reason why so many new funds are coming to the market is due to the recent turmoil in the markets in December-February period, where markets went down at global levels, shattering the trusts of individual investors. Hence the same individual traders and investors are now seeking for professional advice or so called professional money management. How well the fund managers are able to manage the money professionally, is already covered with details in this article

Another reason is the norms setup by regulatory authorities. The regulatory authorites do not allow fund houses to come out with a similar version of a fund which they have already introduced in the past. May be the following sounds familiar to you:
• Growing Economies Infrastructure Fund
• Banking & Infrastructure Fund
• Infrastructure Fund Series 1
• Infrastructure & Economic Reform Fund
• Infrastructure Advantage Fund
• Agri & Infra Fund
• Global Infrastructure Fund
• Small & MidCap Infrastructure Fund
• Infrastructure & Real Estate Fund

As rediff website has pointed out, “Never before have we seen so much 'variety', revolving around a particular investment theme” & “what will happen when fund houses run out of innovative names for their infrastructure funds. We quickly realised that some of them have already planned for this. . . . there will be Series 1, Series 2, Series 3 and so on and so forth!”

Ultimately, with so many funds hitting the markets, the investors have a lot of choice. The same is backed by the ever growing demand of Infrastructure. The promise of the growth story, the next emerging market, the next emerging economy, and so on.
However, we should not forget that there are global signals of a recession- which will definitely hit the Indian growth story. The growth rate of 9% is not easily achievable.

Another thing that these funds claim is that there are lot of Infrastructure companies coming to India and working in India, hence there will be loads of opportunities to benefit from the profits if we invest in these infrastructure companies. However, one should not forget that the more competitive a sector becomes, the more difficult it is to make money from the stocks. When the sector itself is full of competition, then obviously the profits will be shared between various companies. Which company will get what share, no one knows. How will the fund manager select the best performing infrastructure companies, there is no guarantee of anything.

I should not miss out on mentioning the case of Emaar MGF IPO, which was cancelled because of this recent market turmoil.
A union of a Dubai based construction company and an Indian counterpart, the IPO failed miserably and succumbed to market pressure and had to be cancelled. Things work randomly. Therefore, let’s not just get fascinated by the jazzy names and titles of the various NFO that are hitting the markets. No sector can grow forever, no company can continuously make profits, no country can have a consistent growth record. Invest wisely and with caution. All the best! Table of Contents

BMW Job-Cuts: layoff for 8100 employees

The bad news is not stopping for the employees in various sectors. After Siemens which is heading for around 7000 job cuts, It’s time for auto major BMW to announce a job cut or layoff.
As per the news, BMW, the auto major of Germany, may be scrapping 8100 jobs. In India, it was TCS which went for a TCS layoff following TCS salary cuts. Then it was IBM which axed 700 jobs across all over India. Then, it was the turn of British Petroleum (BP) and Virgin to go for a job cut in UK. And now, it’s Siemens which is heading for a massive job cut.

As per the news: BMW announced on Wednesday that it was cutting off 8,100 jobs, as the rising euro pushed the company into the kind of tough cost-cutting it had resisted.

Even as rivals like Mercedes-Benz and Audi eliminated jobs and reduced operations, BMW avoided layoffs. That put pressure on its profit margins but burnished its image in Germany as a desirable employer.

The company — whose cars have sold particularly well in the United States — has responded quickly to global trends, notably the rising price of raw materials and exchange rate volatility, largely through hedging.

About 2,500 full-time employees will have to leave BMW in Germany, while about 600 elsewhere — mainly in the global sales network — will be laid off. About 2,500 temporary workers in Germany have already left, and BMW said that 2,500 more would follow by the end of the year. . Table of Contents

Siemens Job Cuts: 8100 employees to be lay off

The bad news is not stopping for the employees in various sectors. Siemens, a major company in telecom sector, has deiced to got for a job cut or layoff. In India, it was TCS which went for a TCS layoff following TCS salary cuts. Then it was IBM which axed 700 jobs across all over India. Then, it was the turn of British Petroleum (BP) and Virgin to go for a job cut in UK. And now, it’s Siemens which is heading for a massive job cut.

As per the news, Siemens plans to announce that may go for up to 7,000 job-cuts, or 40 percent of the workers in its troubled business telecommunications unit in Germany and Brazil.

According to the news, the top rung of Siemens is expected to announce plans to cut up to 4,000 jobs in the unit, which employs 17,500, and advise the worker representatives that a further 3,000 jobs could be transferred into ventures with new business partners.

The layoffs could occur in Leipzig, Germany, and in Brazil, where Siemens has factories that produce phones and corporate communications networks, the person said. About half of the 4,000 layoffs will be in Germany, this person added. Table of Contents

Reliance Equity Linked Savings Fund-Series I (Tax Saving)-Review

Reliance mutual fund has come out with its Reliance Equity Linked Savings Fund - Series I. It offers tax benefits and that is the reason that the time of launch of the NFO was scheduled for the financial year end.
In this article, I’ll attempt to provide a review of Reliance Equity Linked Savings Fund - Series I. It should help you in taking a decision about whether one should invest in Reliance Equity Linked Savings Fund - Series I.

Typically, this is also a kind of ELSS or Equity Linked Savings Scheme that offers tax benefits and due to this, the lock-in period is there of 3 years. Hence, you cannot take out your invested money before 3 years.

The working principle of this scheme is same as that of any other mutual fund. You money is invested into shares and debt instruments with a given level of exposure and the fund manager will attempt to pick the best performing stocks so as to generate capital appreciation in the long run. The Reliance Equity Linked Savings Fund is having an investment horizon of 10 long years.

Asset Allocation in Reliance Equity Linked Savings Fund

Equities will be having a corpus of 80% to 100% while debt and money market instruments will make up for the remaining 20% to 0%. Hence, primary exposure is for equity, and the fund manager may invest even in overseas instruments like ADR/GDRs. Ultimately, you are giving away the decision making power to the fund manager for him to play around with your money.

You have 2 Options Available for returns and investments under Reliance Equity Linked Savings Fund:
• Growth Plan - Growth option

• Dividend Plan - Dividend payout Option

The Reliance Equity Linked Savings Fund will be tracking the Benchmark Index: BSE 100.

Minimum Investment Amount:

Reliance is easy on the investment amount - just Rs. 500 and in multiples of Rs.500/- thereafter. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-.

SIP: Systematic Investment Plan is Not Available for Reliance Equity Linked Savings Fund

Recurring Expenses of Reliance Equity Linked Savings Fund


Upto (%)

Investment Management Fees


Marketing Expenses


Operational Expenses




Ultimately, whether or not your investment in Reliance Equity Linked Savings Fund produces any profit, your money will be deducted necessarily to the extent of 2.5%. However, you do get tax benefit, but it comes at a cost of 3 year lock-in period.

It is claimed that during the NFO, there is NO ENTRY load for Reliance Equity Linked Savings Fund. The exit load is also quoted as NIL after 3 years, but with an asterisk (*). There are some calculations about amortization & redemption between 4th and 10th year, which ultimately mean that your exit load is NOT NIL. You will DEFINITELY have to pay some exit load if you decide to take out your invested money any time between 4th and 10th year in Reliance Equity Linked Savings Fund.
So, tax saving hungry investors can look for investing in this Reliance Equity Linked Savings Fund. Three year lock-in period and tracking the benchmark of BSE 100 which includes lots of midcaps may help you in making good returns, along with tax benefit. Table of Contents

Buying a house: Is this the right time?

If you are interested in buying a house in US, then it appears to be no better time than the present one. With economy sitting at the verge of recession, the Fed doing all it can to avoid a recession, the interest rates at rock bottom and the supply becoming far better than the demand, tumbling house and stock prices, this appears to be the best time for anyone interested in buying a house - but with his own money, not on a low level, lengthy and mis-represented conditions.

Sales of existing homes fell for a sixth straight month in January, while prices tumbled 4.6 percent amid swelling inventories, according to a report on Monday that offered no end in sight for the housing slump. Since 1930, this is the worst ever scenario the national homes market has seen.

It will definitely take time for the house market prices to get back to its levels. 6 months, a year, 2 years, no body knows.
But ideally, this will be a right time to buy a house, provided you do not have any other debt and have a good affordable business or job to sustain the mortgage payments. Table of Contents

Visa IPO Review

The world wide well accepted Payment Gateway and credit card processing giant, VISA, is set to hit the stock markets. It is planning a mega IPO, which will be the largest in the US markets till date.
The credit card company, Visa, has decided to offer around 406 million shares in a price band of $37 to $42 a share, which amounts to raising something in the range $15 billion to $17 billion. Underwriters will have the option to buy an additional 40.6 million shares, pushing the total haul as high as $18.8 billion.

This will be the biggest ever IPO in the history of USA and Visa's IPO could also be the world's second largest ever, after China based Industrial & Commercial Bank of China's which raised a fortune of $21.9 billion in 2006, though it Initial Public Offering.

The precise dates for the IPO offerings are not known, but market experts believe that it could be offered sometimes around 17th of March. It is expected to be a major event not only for the US, but also for the global economy. In the current situation, where most of the recently listed IPO’s are trading below their offer price, the Visa IPO will set a benchmark.

Related: Current Status & Listing of Visa IPO, Latest: Visa Raises 17.9 billion $

To make a comparison, the perfect example would be of Mastercard. MasterCard was priced at $39 in May 2006 and is presently trading around $200. It's even gone up since the credit crunch last summer. This is mainly because MasterCard handles transactions and doesn't actually have to take on consumer debt.

Hence, Investors would definitely give a thumbs up to this IPO and who knows it may even make a landmark for the ailing US economy.
However, there is a major difference in the PE Ratio of the two IPOs.
The Price to earnings ratio of MasterCard stood at around 11, while that for Visa is at around 30. Hence, some experts are skeptical about the debut of Visa IPO in stock markets.
Anyways, things work randomly. Let’s see how the Visa IPO performs.
Table of Contents

Review: Reliance Wealth + Health Plan

Reliance Life Insurance Company has come out with its new Reliance Wealth + Health Plan. How good is the Reliance Wealth + Health Plan? Should I invest in Reliance Wealth + Health Plan?
Should I buy this Reliance Wealth + Health Plan for tax-saving purpose? In this article, I’ll attempt to review the Reliance Wealth + Health Plan, and attempt to answer some such questions.

Reliance Wealth + Health Plan, claims to offer a mix of unit linked health insurance plus a savings and investment product. It also offers you a tax benefit for the amount of premium you pay towards this plan. This plan from Reliance Life offers the Hospitalization and Surgical Benefits and also covers Critical Illnesses. In short this plan provides you with a Personalised quality Health cover that fits your LifeStyle

The Claimed Key Features of Reliance Wealth + Health Plan

• A Unit Linked plan with Unique Savings Component
• Twin benefit of market linked return and health protection
• Choose from two different plan options
• Flexibility to take care of your family’s health
• Flexibility to switch between funds / plan options
• Option to pay Top-ups
• Option to package with multiple riders
• Liquidity through partial withdrawals

Key Benefits - Reliance Wealth + Health Plan
• A comprehensive health plan that
- helps you to pay for your routine medical expenses
- covers multiple major surgeries
- takes care of the follow-up tests and medicines post hospitalization
• Lump sum cash benefits for non covered injuries
• Fund option including Equity fund to harvest the best from the growing Equity market
• Income tax benefit under section 80C, 80 D and 10(10D) of the Income Tax will be available.
• Save today for future medical expenses

The so called claimed “Flexibility” offered - You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover through partial withdrawal, or save the money in your account for future needs, such as:
• Health insurance for medical expenses and savings in the eventuality of unemployment
• Cover Medical expenses after retirement
• Cover Out-of-pocket expenses
• Cover Long-term care expenses
It all looks good, but, the amount of this money will depend upon the actual NAV or fund value of your holdings, and that is subject to market risks. So ultimately, there is no certainty.

How does Reliance Wealth + Health Plan work?

The plan offers to insure multiple lives. The principal insured is the policyholder and the other insured person(s) are the family member(s). The family consists of the Principal Insured (Policyholder), the Spouse as Insured Spouse and the first two eligible children by seniority in age. The plan takes care of the hospitalization expenses which include:
• Daily Hospitalization expenses
• Intensive Care Unit expenses
• Post Hospitalization expenses in the form recuperation benefits

The allocation charges are deducted from the premiums before allocation of units.
The insurance charges (along with the service charge), are deducted through cancellation of units whereas the fund management charge is priced in the unit value.

Biggest problem - everything linked to your contribution “If the Principal Insured is admitted in a hospital ward other than Intensive Care Unit (ICU), the daily cash benefit will be 5% of Annual Premium subject to a maximum of Rs.2500 per day.” That means if you are paying an annual premium of 10,000, then the maximum daily Hospital cash benefit you can claim is just 5% or just Rs. 500 per day. For spouse, the maximum cap is limited to 1500 only, again dependent on your contribution (5%). For children, it is maximum of 1250 only, limited to just 2.5% of your contribution.

Other problem - must stay in the hospital for atleast 48 hours. For less than that, you cannot claim anything.

Recuperation Benefit is available ONLY if one stays for more than 5 days or 120 hours and have eligibly claimed the Daily Hospital cash benefit

Death benefit - No life insurance - only an amount equal to the NAV value of your fund units will be paid to you, that too NAV value on the date of death. Moreover, there are NO DEATH BENEFITS FOR THE DEPENDENT SPOUSE OR CHILDREN - another drawback.

Funding Options:

1. Ready-made Plan Option

This plan means that your money will be invested as per your date of birth. The younger you are, the more exposure you will have for equities and shares. The elder you are, the more money will go towards bonds, gilts, money market instruments and debt securities.

2. Tailor-made Plan Option

This plan means you have the full freedom to choose how your money is invested. You have 4 different types of financial securities to choose from - Money market, Gilts, Corporate Bonds, Equities. Depending upon your risk appetite, you can select the investments with which the so called “fund managers” will play around with your money. Ultimately, all depends upon the LUCK and RANDOMNESS, about how the selected stocks/bonds will perform.

Withdrawal Options:
Partial Withdrawal: Withdrawal not allowed for first 3 years. Only after 3 years - part withdrawal is allowed.
Heavy charges - 5% if withdrawn in 4th year, 3% for 5th year and nil for 6th year onwards.

Not only that, there are limitations on the amount you can withdraw. For year 4 and 5 - only 10% of total fund, year 6 to 9- only 15%, Year 10 to 14 - only 20%, 15 years and above - 25% of the fund value. Last 5 years before maturity - 95% of the fund value can be withdrawn.
Switching Option: 52 FREE switches can be exercised during a year, meaning 1 switch per week.

Nomination facility is available - in case of death only

1. Allocation charges
Year 1 - straightaway 25% charges deducted.
Year 2 onwards - 5%

2. Hospitalization charges: No figures available - they say it will vary & deducted on a monthly basis - God knows what these charges are

3. Administration Charges: Each month, 40 Rs. will go away

4. Fund Switching Charges: After 52 free switches, Rs. 100 per switch

5. Fund management charges - varies from 1.25% per annum to 1.5% per annum, depending upon your investment plan choice.

So, if after paying the heavy charges to the Reliance Fund management team and the hundreds of limitations that the insurer has in claiming the insurance and hospitalization benefits, if one still believes that he/she can benefit from this policy from, Reliance Wealth + Health Plan, then one must apply for it.
Tax benefit is available, so last minute tax saving attempts can be made through this Reliance Wealth + Health Plan. All the best! Table of Contents

UK House Price on decline: Mortgage falls

The mortgage markets in UK are not willing to take a respite. It has been 5 continuous months of decline in the House prices - they fell for the fifth month in a row during February. However, there were some positive signals that housing demand is beginning to increase due to the lower interest rates.

As per the news, the average price of a house in Wales and England went down by approximately 0.2% during the current month of February to around £175,000, according to property information business - Hometrack.

The yearly inflation rate for house price continued its downward journey to come at just 1.4%, which is its lowest level since April 2006.

But Hometrack said that despite the continued weakness in underlying prices, there were signs that demand was improving, with the number of new buyers registering with estate agents increasing by 7.9% during the month, compared with an 11.5% fall in January.
The group said there was also a slight rise in the number of sales agreed, which contributed to February's price fall being lower than the 0.3% slide seen during each of the previous two months.
The figures come after property website Rightmove reported a 3.2% jump in house prices in England and Wales in the four weeks to February 9, although it said some of the gain was due to market distortions following the final roll-out of the Government's controversial Home Information Packs.
Hence, there has been a modest growth in the registrations of new buyer which is being taken as a proof of increasing and firm demand, but it is backed largely by the recent interest rate cuts across the globe, with London and the South East registering the largest increases in demand.

At the same time, the rise in buyer numbers was met by a similar increase in the number of homes coming on to the market, whereas during the past the growth in demand has outstripped the increase in supply. Table of Contents

Reliance Power Bonus Shares: Price Calculations for 5:3 issue

After explaining the mathematics of Bonus issue of Reliance Power shares in my article Truth of Reliance Power issuing Bonus Shares, here are the final and exact numbers and calculations as Anil Ambani has finally declared the exact figures about the Bonus Issue of Reliance Power.
Each Non-Promoter (including Retail Investors, and QIB investors) will receive 3 shares for every 5 shares they hold. Hence, if any retail investor has 15 shares and he is still holding it, then he will receive 9 additional shares as bonus shares, at no extra cost or free of cost.

So what will be the effective price of the retail investors’ shares?
Retail investors were offered shares at 430. Someone receiving 15 shares would have paid 15*430 = 6450 Rs. in total. Now, he will receive 9 more additional shares as bonus, without any extra cost. Therefore, at the same price of 6450, his share holding will increase to 24 shares. Therefore, his effective price will become 6450/24 = 268.75 Rs. only, for each share. Hence, the investors will benefit because the market price of Reliance Power shares is currently trading above 400 Rs.

What about QIB?
The other investors were allotted the shares of Reliance Power at a Price of Rs. 450. Hence, for 15 shares they paid 450 * 15 = 6750. After Bonus Issue of Reliance Power, the no. of shares will increase to 24. Hence, their effective price will become 281.25 Rs per share. Again beneficial, as the stock price of Reliance Power is around 400 Rs.

All in all, it’s a good move by Reliance Power Promoters. Anil Ambani himself have divested his holdings in Reliance Energy and Reliance Power to absorb the losses. I hope this loss bearing by the promoters will give good strength to the share price and benefit to the shareholders. It should also help in marinating the Reliance brand, as a reliable name in India and the world.

Related: Reliance Power Bonus Shares Allotment Date

Another example of Randomness can be observed. The REC or Rural Electrification Corp. IPO was oversubscribed well above its limits.
Hardly 15 days back a well dominated and reliable name of Reliance in the same power sector failed, Emaar MGF and Wockhardt hospitals IPO were cancelled, but an unknown and new company with REC IPO have managed to win the hearts and trust of investors. Keep, watching, things work randomly! Table of Contents

Review: Mirae Asset India Opportunities Fund NFO

Mirae Asset Mutual Fund has launched its first ever equity fund in India. The offering from Mirae Asset MF is called Mirae Asset India Opportunities Fund.
The fund is an open-ended diversified equity fund, which means that any no. of units can be created and redeemed as per the demand and supply of the Mutual fund units.
The fund is said to have an objective to generate long-term capital appreciation by capitalizing on potential opportunities through predominantly investing in equities and equity related securities.

On their official website of Mirae Asset Mutual fund and in advertisements in leading news papers of the country, they have the following table to make some claims:

The claim is that at any given point of time, there are few sectors which are underperforming, while there are a few sectors which are out performing - A fact very well known even by every Tom, Dick and Harry in the world of investments and trading.. Also, the data presented in table above confirms the same. For e.g. in 2003, it was Metal, Capital Goods and Auto sectors that performed well over other sectors, while in 2005, Consumer Duarables, Capital Goods and FMCG outperformed others. In 2007, Metal, Capital Goods and Oil & gas beat the rest of the sectors. Nothing wrong in these numbers as they are based on historical data. But the claim for the future is based upon these historical assumptions.

Mirae Mutual Fund claims that it has the capability to pick and choose the outperforming sectors and hence this mutual fund money will be switched between the stocks belonging the sectors that Mirae MF believes will outperform. How well they can do it, is a debatable question and is left to the investors to decide upon.

Interestingly, This is the first ever mutual fund by Mirae in India. They have been an international asset management company in the past and have now offered their first ever fund in India. Ultimately, this is another new NFO of a Mutual fund with the same kind of claims - no guarantee of any returns. Mirae claim to use their international experience and equity research for the benefit of their investors, hence investors can make a bet.

The New Fund Offer priced at Rs.10 per unit (plus applicable entry load)
Open from: 11 February 2008 to 10 March 2008.
The fund would invest between 65-100% in Indian equities and equity related securities and 0-30% in money market instruments and debt securities investments. It includes investment up to 25% of in securitised debt.
Minimum amount for investments: Rs. 5000 and thereafter in multiples of Re 1.
Entry load: 2.25% for each purchase of less than Rs. 5 crore. Nil for higher amounts
SIP Facility is available: The fund offers SIP facility even during the new fund offer. For SIP, the minimum investment is 6 installments of Rs 1000 each or 4 installments of Rs. 1500 each, i.e. Rs 6000 and thereafter multiples of Re.1. A major benefit to the investors' is that there is no entry load on the SIP investments.
Benchmark Index: BSE 200 Index.
Offers Tax benefits: NO
The fund house is also planning to launch a quant-based fund. All the best to investors who want to invest in Mirae Asset India Opportunities Fund! Table of Contents

Facebook opens for Indian Advertisers

Indian publishers and Indian advertisers, both get ready to benefit!
The much hyped and highly popular Facebook website has opened its ad inventory for the Indian Advertisers. The Facebook website has approximately 1.75 million strong user base of Indian users.

Till date, the ad inventory of Facebook was maintained by Microsoft’s US team. However, from now on, the MDAS company or the Microsoft Digital Advertising Solutions is going to take control over the ad inventory of Facebook website. In India, the MDAS is partnered with NDTV Media, who are the one and only sales partner of MDAS in the Indian region. Hence, they will open the gates of Facebook to Indian advertisers.

It is claimed that Facebook is growing at the rate of 200 percent annually. The Facebook website has been ranked in top ten websites of India, based upon the popularity report.

It will be a big bonanza for the Indian advertisers to target the Indian audience through Facebook website, a site that is expected to grow leaps and bounds in the field of social networking. However, this site, along with orkut and others, have been blocked at many offices.
This may force the advertisers to think twice before going for advertising on Facebook. Things are improving in India as far as the net connectivity is concerned. People are now having internet connections at home, so definitely, there will be lots and lots for advertisers to explore for advertising on Facebook. Table of Contents

Review: UTI Long Term Advantage Fund (Save Tax benefit)

UTI Mutual Fund has come out with the NFO of its UTI Long Term Advantage Fund
UTI Mutual funds have been the front runners in the mutual fund industry in India and they have established a reputed name in money management. They have come out with this new fund called UTI Long Term Advantage Fund. Though the NFO is open from 19th December onwards, the scheme offering tax benefit will make it an attractive and considerable option for the people who want to desperately invest to save tax at the last minute.

Another thing is that presently, the markets are having a high level of volatility and have seen hovering around the bottoms. The 3 year lock-in period will ensure your money is invested in for a relatively long term of 3 years and may appreciate, provided you trust the UTI Fund management and they have good stock picking skills.
Another good feature is that this scheme being closed ended, does not qualify to claim entry load charges. Hence, it is attractive for investors who are dying for making a last minute tax savings investments.

Details of the scheme: 10 year long close ended ELSS scheme, which also offers tax benefits under section 80 C of the Income Tax Act.
NFO Period: From December 19, 2007 to March 19, 2008.

Options Available
Growth Option and Dividend Option with Payout and Reinvestment facilities.

Tax Benefit Offered: Yes, under section 80 C of Income Tax Act

Lockin Period: 3 years (minimum)

Minimum initial investment: Rs.500/- and in multiples of Rs.500/- thereafter with no upper limit.
But as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-

Entry Load: The scheme, being a close-ended scheme, is not permitted to charge Entry Load.

Exit Load : Nil. If the investor opts for redemption before the completion of 10 years the proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investors.

Fund Manager: Ms. Swati Kulkarni
The scheme aims to provides an opportunity for capital appreciation through investment in well managed high quality companies that have potential to grow at reasonable rate in the long term

The so-called claimed benefits of investment in Equity Linked Saving Scheme

1 Opportunity for capital appreciation through power of equities

2 Tax benefits under Sec 80 C of Income Tax Act - 1961 - Contribution made by individuals & HUFs will be eligible for deduction of the whole of the amount paid or deposited subject to maximum of Rs. 100000/-
(along with other specified investments) under Section 80 C of Income Tax Act, 1961 as provided therein.

3 No long term capital gains tax (Subject to Securities Transaction Tax) on investment under equity oriented fund including ELSS Scheme.

4 Tax free dividends.

5 Shorter lock-in period in comparison to most of other tax saving instruments.

6 3 year lock- in period helps in minimizing volatility.
However, the biggest advantage for investing in this scheme is that due to the lock-in period of 3 years, there will be no Long Term Capital gains tax and dividends are also taxfree
Table of Contents

Tara Tiny: Tata Nano Challenger

A new, small car, priced less than the 1 lakh Rs. Tata Nano, is expected to be the competitor to Tata Nano. So one can now look beyond Tata Nano. However, the price is just 1 Re. less than Tata Nano car, priced at 99,999 Rs. Moreover, it will be launched by June this year itself.

Tara Tiny will be a battery-powered vehicle, said a recent report in the Economic Times.
Kolkata-based Tara International has teamed up with China's Aucma, a leading player in the electrical vehicles and appliances segment, to manufacture this car.

The company plans to launch Tara Tiny by June this year.

Besides Tara Tiny, there are 3 other cars to be launched namely -- Tara Titu, Tara Micro and Tara Mini -- are also in the pipeline. The ex-showroom prices of these Tara cars will be between Rs 99,999 and Rs 500,000.

All these vehicles can be electrically charged and powered. The vehicles can be recharged daily at 220 volts through a 15 amp power. The electrical vehicles business is seen to generate a turnover of Rs 15 crore (Rs 150 million) in 2008-09 and about Rs 50 crore (Rs 500 million) in the second year.
Officials say that the Tara company also has plans to introduce buses and electrically power two- and three-wheelers. While the two-wheelers will be in the range of Rs 9,999 to Rs 30,000, the three-wheelers are likely to be priced between Rs 85,000 and Rs 180,000. Table of Contents

Starbucks job cut: 600 employees fired

It is happening once again - this time not in the big financial sector or the technology jobs, but at a coffee shop. Starbucks, which is the world's largest chain of coffee shops, said it will cut on 600 jobs and add regional divisions in the U.S. in an effort to end a decline in customer visits.
Around 230 workers are already fired, while remaining job cuts will be done by freezing of recruitment on vacant positions. Though the Starbucks management claims that the job cut, 600 in total, is not even 1% of the total Starbucks strength and the people who have been fired are the ones who are NOT engaged with serving the customers, but they are primarily the support staff, mainly in supply chain management stream.

The officials said that they would slow the pace of store growth and close 100 ``underperforming'' stores.

Starbucks will double the number of U.S. divisions to four in the hopes of improving employee training and customer service. Visits to U.S. locations have declined the past two quarters.

Starbucks, which has an employee strength of around 170,000, went down 44 cents, or 2.5 percent, to $17.82 at Nasdaq trading. Table of Contents

Review: Tata Growing Economy Infrastructure Fund NFO

Tata has come out with its so called Tata Growing Economy Infrastructure Fund. The fund is in the NFO period and it closes on 18th March 2008.
The Tata Growing Economy Infrastructure Fund, is said to invest in the so called Growing economies or emerging markets, a concept that I could never understand. India has been growing since independence, so are Brazil, Russia, China, Thailand, South Africa, blah, blah, blah, blah.

They are expected to invest in these so called growing economies and the infrastructure companies of these growing economies. They have namely 2 plans and styles in which your money will be betted upon, details of these 2 plans, A & B are included below.

So if an investor believes that the Tata Fund Money managers will be able to pick out the best performing stocks of the future in the infrastructure sector that too at a world level, then go for this fund NFO.

However, with so many infrastructure funds in offering currently, and so many in the pipeline, I could not understand how can TATA fund management have a heavy entry load of 3% that too on a minimum investment amount of 10,000. The usual conventional NFO’s will have 2.25% as entry load and a minimum investment amount of 5,000 only. Probably, the Tata Fund management believes firmly about their stock picking skills and they are much more confident about the response by investors to their fund.

Here are the fund details:
Name of the FUND: Tata Growing Economies Infrastructure Fund: (open-ended equity scheme - meaning any no. of the units can be created and redeemed based upon the demand and supply).

Price Rs. 10/- per unit with applicable loads during the NFO New Fund Offer.

Minimum Investment Amount (Both Plan A and Plan B): Rs. 10,000 and in multiples of Re. 1 thereafter.

Investment Variations:

  Plan A:
Investment objective of the scheme is to generate capital appreciation / income by investing predominantly in equities of companies in infrastructure and other related sectors in the growing economies of the world and in India..

  Plan B: Investment objective of the scheme is to generate capital appreciation / income by investing predominantly in equities of companies in infrastructure and other related sectors in India and other growing economies of the world.

Prescribed Investment Style:
  Plan A:
Equity and Equity related instruments of companies engaged in infrastructure and infrastructure related sectors (in growing economies other than India: 51% - 70%; in India: 30% -49%), Other domestic equities, Debt & Money Market Instruments: upto 19%.

  Plan B: Equity and Equity related instruments of companies engaged in infrastructure and infrastructure related sectors (in India: 65% - 85%; in other growing economies other than India: 15% - 35%), Other domestic equities, Debt & Money Market Instruments: upto 20%.

Two Options for Investment: Dividend Option and Growth Option.

Applicable Load Structure: Entry load is very very heavy: For each investment amount less than Rs. 2 crores: 3%, for each investment amount greater than or equal to Rs. 2 crores: NIL. Now 3% is not a small amount of money, if you have to invest a minimum of 10,000

Exit Load: For each investment amount less than Rs. 2 crores: 1%, if redeemed on or before expiry of 12 months from the date of allotment. NIL if redeemed after 12 months from the date of allotment.
For each investment amount greater than or equal to Rs. 2 crores: NIL. NAV Publication / Resale / Redemption:

Investors may try their luck on infrastructure of emerging economies by investing in the Tata Growing Economy Infrastructure Fund
Table of Contents

Google gets into Health Services: Cleveland Clinic is the start

Google is on the journey with an ambition to set some more milestones in the internet business.
Since last one and a half year, Google has been working to design a health care product offering which caters to the medical needs and a strategy of providing the most vital information of the patient - the consumer health information.
Though since last one and a half year Google was silently working on this issue, but recently, it is going into a big contract - an endorsement from the Cleveland Clinic. It is a big medical center which is beginning a pilot project with Google to associate the health care information for some of its patients with Google personal health records.

Cleveland Clinic is said to be at the cutting edge of health information technology, and it has more than 100,000 patients each having a personal health record. Unfortunately, all the patients need to keep their medical records for themselves.

The Google personal health records can provide a solution to that problem, among others. A person can approve the transfer of information on, say, medical conditions, allergies, medications and laboratory results from the clinic’s computers to a Google personal health record — a series of secure Web pages.

Now, Google is not the only one of several companies trying to get into the money making business from Web-based personal health records. Microsoft, previosuly brought out its entry, called HealthVault, in October, and it has commitments from medical centers including New York-Presbyterian Hospital and the Mayo Clinic. WebMD, Revolution Health and others also offer personal health records.

Anyways, Google is Google. It has the capacity to hit at any firm in the world.
No wonder just a “I’m feeling Lucky” technology may transform the way hospitals, doctors & medical practitioners across the globe operate. Keep watching for more surprises from Google! Table of Contents

Review: Morgan Stanley ACE (Across Capitalisation Equity) Fund

Morgan Stanley Mutual Fund has come out with its open ended equity scheme Morgan Stanley A.C.E (Across Capitalisation Equity) Fund.

Price per Unit: Rs. 10 (inclusive of entry load of 2.25% - which means that the entyr load charges of 2.25% will be automatically deducted from Rs. 10 and remaining will be invested)

NFO Period: open from February 11 to March 10. The fund will reopen for ongoing transactions from April 2008.

The distinct feature of this fund that sets it apart from other conventional mutual funds is that along with equity investments, this fund will also invest a portion in equity derivatives.

Morgan Stanley claims that the fund house follows a ‘community of boutiques’ model for fund managers, which aims to ensure that each investment strategy is managed by a dedicated team with specific experience in that strategy. For instance, this scheme will be managed by a fund manager who specialises in selection of second line shares. God know what it means - atleast I cannot understand it.

Investing some part of money in equity derivatives will be good for hedging or risk management, however, as explained in this article about hedging, it comes at a cost. Therefore, one may gain substantially if he is in a hedged position, only if he is lucky; and may loose limited if he is unlucky. He may also miss-out on a major bull run due to the hedged position.

So nothing new in this fund as well. Same old claims, same old concepts with jazzy buzzwords and keywords. Investors may try their luck if interested to see if they can make something extra from the 2.25% entry load charges. Table of Contents

Rate Cut: SBI, Canara, Union Bank, Bank of India: What’s happening?

It’s the government backed PSU banks that have again taken the lead to fight it out in the open market competition. The state run banks have gone for a 2nd round of rate cut giving major relief to borrowers. It doesn’t appear to be the problems of the slowdown of economy, but more to be the instructions from the government, otherwise, such a synchronized move when 4 PSU banks simultaneously go for a rate cut at the same time is not just a mere coincidence.

As per the news:
State Bank of India, Canara Bank, Union Bank of India and Bank of India — on Wednesday announced a cut in their benchmark prime lending (PLR) rates. For SBI and Canara, this is the second cut in less than a fortnight.
RBI, keeps on giving the reference to inflation and has been avoiding the rate cut. But this appears to be an indirect attempt to ask PSU banks to cut the rates. But as far as my knowledge goes, this kind of strategy may not work well. The consumer confidence is low, there have been less spending, especially after seeing what is going on in the US and UK. The interest rate differential between US & India is too high, almost around 5%.

Such indirect moves of forcing PSU banks to cut rates MAY keep up the loan markets and maintain the borrowing levels, but it will definitely not bring up the spending levels of the customers, as was the case during the past few years. Probably that is the reason that the second largest bank, and the largest private bank of India, ICICI Bank has not yet gone for a rate cut.

The biggest player, SBI, has announced a 25-basis point cut in the SBI advance rate (SBAR) to 12.25%. The rate cut will come into effect from February 27. Barely a week ago, SBI had cut its PLR by 25 bps to 12.50%. SBI, which is taking the lead, met heads of some of the other nationalised banks, including Canara Bank, Punjab National Bank, Bank of Baroda, Union Bank and Bank of India, to discuss a possible cut.
Bank of India too lowered its PLR by 50 bps to 12.75%, a week after it lowered rates on vehicle loans by 50 bps, educational loans by 100 bps and consumer loans by 250 bps. The new rate cut would lower these rates by another 50 basis points.

The new rates would come into effect from Feb 21 for Union Bank of India and Bank of India. Canara Bank has also cut its prime lending rate by 25 basis points, to 12.75%, effective from Feb 25. Table of Contents

401(k) Participants can sue legally for Retirement Money Management

The Supreme Court of United States yesterday gave a landmark decision bringing relief to many of the pensioners. The Supreme Court kept the right of pensioners or participants in 401(k) retirement plans, which enables them to take a legal course of action to sue the pension fund management companies, so as to recover the losses if they think their pension money accounts have been mishandled.

This is a big relief for the citizens of United States, especially the elderly, who are now solely relying upon the pension fund money which they have been contributing to and accumulating to since a very long time. This gives the participants a good chance to check how their money was treated in their 401(K) participation plans for retirement plans.

The decision was a clear victory for one James LaRue of Southlake, Tex., who claimed that he has lost around $150,000 because the administrating division managing his retirement plan did not follow his instructions, and did not invest his pension money as per his choice. It also involved the failure of the plan administrator to follow his instructions to switch his investments from one mutual fund to another. By extension, the ruling opens the door for other 401(k) participants to bring suits, although one lawyer who specializes in such issues said the decision was unlikely to open any floodgates.

USA leads the way - both in financial innovations as well as legal proceedings, keeping the individuals rights above one and all benefits. Hope to see the same being reflected in other countries. Table of Contents

Reliance MPay -Use Reliance Mobile as HDFC Credit Card

Some more development in the technical front in the Indian IT space for banking and financial transactions. After the technology savvy ICICI Bank launched the ICICI Bank locator based on maps, Reliance Mobile has come up with a ”Mobile Phone Credit Card”.

What this Fuss all about?

Mobile banking is still not common in India. Reliance has tied up with HDFC bank to introduce Mobile Credit Card -termed under the name “Reliance MPay”. This will transform your Reliance cell phone into a credit card or better to say a virtual credit card.

Reliance though has a financial arm, called Reliance Money, but it does not have a credit card in the name of Reliance. However, under this Mpay scheme, a HDFC Bank credit card holder who also has a Reliance mobile can use the MPay service which will transform his Reliance Mobile Phone into a credit card. You no longer need to carry the credit card, but just carrying your Reliance Mobile phone will be sufficient for making a payment.

Thus the Reliance Mobile becomes the Credit Card while the mobile number becomes the Credit Card number.

Reliance mPay service is expected to be used at various retail outlets just like any other credit card accepting establishment, but for a start, it will be used ONLY for payments of Reliance Mobile bills and Reliance Energy electricity bills.
India presently does not have a PIN no. based authorization for credit card swipes, but using MPay from Reliance Mobile will require a PIN, hence it will be far safer to use than the conventional credit card. No details are available about the charges that one needs to pay for using the MPay service, either to Reliance Mobile or HDFC Bank. Hope this begins a new era of mobile banking in the India Markets. Table of Contents

Wireless Unlimited Calling Plans: Verizon, AT&T;, T-Mobile

February 19, 2008 was a great historic day in mobile wireless services. Yesterday, Verizon Wireless revealed its first UNLIMITED calling plan. And other competitors dod not stay behind as within a few minutes, T-Mobile & AT&T; also announced similar offerings.

Just pay $99.99, and you can make unlimited calls for nothing extra. It was Verizon which took the initiative and AT&T; and T-Mobile were quick to react. Customers will have a nice gala time with their wireless devices wit such schemes. No doubt, it’s a highly competitive markets and customers are going to have the best. Many people who’ve purchased cheaper, limited-minuted plans may switch up to unlimited offerings.

However, it may hit hard on some wireless companies, which may not have the capacity to offer such services at such prices and may go for a toss. This move also carries huge implications for companies like Leap and MetroPCS, which have long tried to differentiate themselves by offering unlimited calling plans. In one day, they have lost one of their biggest selling points. This could be the last straw to finally push these companies toward a merger.
Another company affected: Sprint. By not matching Verizon's price today, the company has proved, once again, that it doesn't move as fast as the competition. A lack of such an unlimited plan could lead to further subscriber losses. Table of Contents

Northern Rock Shares Suspended from trading

Northern Rock shares have been suspended as the government looks to introduce a bill today enabling the bank to be brought into temporary public ownership.

The government official concerned with the issue said that the rescue packages or “offers” made by Virgin group and Northern Rock management group were considerable but not sufficient for delivering the value for the money. “Our financial adviser Goldman Sachs has concluded from a financial point of view that a temporary period of public ownership better meets our objective of protecting taxpayers,” a statement from the officials claimed. Hence the offer of Buying Northern Rock still remains open. Right now, it is Virgin Group which has emerged as the winning bidder.
Northern Rock has got a new boss - someone who is known as a “Corporate Troubleshooter”. Cambridge-educated Ron Sandler started his career as a management consultant. He joined Lloyd's of London in 1995, becoming chief executive a few months later. Table of Contents

IT firms cut onsite Perdiem, Allowance for overseas trips

More and more news is pouring in from the bludgeoning IT sector of India. Already hit by the dollar-rupee exchange rate, loss of some portion of business in the US and the US clients turning away from investments in IT, the major IT companies went for a job cut. First it was the TCS salary cut, followed by TCS job cut which fired 500, followed by IBM which fired 700, Yahoo India laying off 45 people and now it’s the time to cut the cost by reducing the perdiem or onsite travel allowance or allowance for overseas trips.

It is learnt that the onsite perdiem allowance can be reduced by 25-35% by major IT companies. According to informed sources, leading Indian IT service providers like Tata Consultancy Services, Infosys Technologies and Wipro have launched independent studies to arrive at the revised "per diem" (daily rate of payment) for onsite employees in a bid to cut costs.

Infosys pays a per diem of $45 (around Rs 1,780) currently to its onsite employees. Now, there is a proposal to reduce it to $35 per day (around Rs 1,380) -- a Rs 400 cut per day -- according to sources.

Wipro, on the other hand, is hiring more local talent at client locations to reduce deployment of staff from India for onsite assignments.
Recently Wipro Chairman Azim Premji had said: "If we hire people locally, it will displace people we send from here on H1B visas. So net-net, it will not mean an extra cost to us." If this happens, there will be fewer plum jobs for the boys in India.

TCS pays Euro 1,900 per month to each onsite employee in Europe.

Now, the onsite visit may no longer be that fruitful for the IT employees. Suddenly, everyone may start feeling the importance of “staying with the family in their own country”.
Already hoards of so-called NRI’s are coming back, and many more are contemplating plans to come back. The icing on the cake for the IT and BPO employee, which used to be the extra income from the perdiem from onsite visit will no longer be there. I hope the IT industry atleast keeps up with the higher salary standards! Table of Contents

ICICI Bank Map based Branch Locator

Being the pioneer in use of technology, ICICI Bank has now added another feather in its cap on the technical front. IT now offers locating bank branch using a map - which is really really helpful. The address is (Opens in a new window).

Traditionally, the banks in India have branch address only. It becomes really difficult for anyone to understand the address listed on the website, which may read as House No 143/AB/123, XY Road, ABC City. Now XY Road may be 10 Kms long, and have 1000’s of buildings. So finding House no. 143/AB/123 on XY Road may be really troublesome, especially in the traffic congested metro cities in India, that too if you are driving in a four wheeler. Maps come to your help.

ICICI bank has tied up with, a mapping website of India, to locate its branches on the map.

For e.g. A search for a branch address at K G Marg, New Delhi will show you the following location, where you can zoom in further to get to the exact street and address.

Moreover, you have the choice of finding branches in a particular area within a limted radius, like 5 Kms.

ICICI Bank is alleged to come heavy on the charges it takes from its customers, but it keeps up being a front runner in technology. To me, it seems that the working principle of the bank is “Do it Yourself for free”. The more you are familiar with using internet and technology, the less charge you’ll have to pay. The more you get into the branch based paper-work, the more they will extract from you!

What more can be expected?
Right now, only branches can be located on the map. I’m sure very soon, you will see ATM’s locator as well.
Table of Contents

Truth of Reliance Power issuing Bonus Shares: Heal-up process

Anil Dhirubhai Ambani group controlled and recently floated Reliance Power company is now willing to offer Bonus share to the shareholders as a part of image building process. The bonus shares will be given only to the investors and shareholders other than the promoters. Hence, each shareholder will get an additional share for each share of Reliance Power that he is holding. If someone has 15 shares, then his shares will double to 30.

But what’s the catch?
As explained in this article,Issuing Bonus shares does not really add any value to the company. That’s a fact. Because, just by increasing the number of shares, the company does not creat any value or any new business.

Typically, what happens is as follows. If say I run a company which has a total of 100 shares and the price of each share is 2000 Rs. Now If I decide to go for a bonus share in the ratio of 1:1, then each shareholder will get another additional share. Hence, the total no. of shares will become 200. However, the Markets are efficient, so the price of the share will automatically adjust to half, i.e. it will come down to Rs. 1000 only.

In simple ways, initially, before the bonus issue, the total value of the company was 100 shares * 2000 Rs = 200,000 Rs. So just by giving a bonus share, the company has NOT created any value. Therefore, after the bonus issue, the market price will come down, so that the total value of the company will remain the same.

After the bonus issue, the no. of shares will be 200, so for the Market capitalization of the company to remain the same at 200,000, the share price will come down to 1000 Rs. No value is created. However, since the price has come down to 1000 Rs. level, there is some liquidity in the market. Now more people can purchase the share as the price has come to a bit lower level, hence there is liquidity induced. Generally, this is taken as a positive sign by the market, hence the price of shares usually increases.

How is Reliance Power Bonus Shares Issue different?
The Reliance Power Bonus issue is different because it is not applicable to the promoters. Therefore, the additional shares will be given only to other shareholders. The proposal will result in a dilution of the promoter group's shareholding (89.9 per cent at present) in R-Power.

So for an example, if the promoters hold 90% of the shares, then only 10% are there with other share holders. Therefore, if Reliance Power has a total of 100 shares, then 90 belong to promoters, rest 10 belong to other shareholders. These 10 shares will be doubled -taking the total no. of share to 110. Hence, the price will adjust accordingly.

For example, if Reliance Power is trading at 350, then the value of the company with 100 shares is 35,000. After bonus share issue, the total no. of shares have become 110. Therefore the share price will go to 35,000/110 = 318.18

Now, the 10% shareholders will benefit because they will have 2 shares at the price of 350, hence the effective cost will be 175 per share. And after the bonus share issue, the market price of each of the share is 318.18, therefore, the 10% stock holders will gain.

Who will loose? It’s the promoters that will absorb this loss - who hold the 90% shares.

In Conclusion:
It’s a good move by the promoters of Reliance Power Share to offer a Bonus share issue.

Related: Reliance Power Bonus Shares Allotment Date

The retail investors can gain, but only if the stock does not show more volatility. Please not that the numbers shown above are only for demonstration purpose. The actual value will be different depending upon what was the closing price during the record date and ex-date for the bonus issue. Table of Contents

Recession: How it affects stock prices?

I have gathered some tit-bits about recession. Here is an attempt to explain it in simple terms.

We all have been hearing about recession since last few months. US is on the verge of recession, we will be affected, the UK economy could follow US if the latter gets into recession, and some such concepts.

In this article, I’ll try to explain what is recession, what causes a recession, How do the money markets work in recession, what happens to the stock market in recession, etc.

What is a recession?
The moment the GDP or Gross Domestic Product of a country goes down for a minimum of 2 quarters, the economy may be falling in a recession.

What causes recession?
Speculations by the consumers in that economy, investors at large and the lowering of business confidence causes recession. There are multiple examples of recession causing factors - however, there is no sure shot way to measure it. There are several indices created, like the Business Confidence Index, etc., they try to gauge these parameters. However, they may be highly erroneous. Ultimately, the demand and supply factor comes in, there may be a decrease in industrial production due to loss in demand, and hence job cuts and unemployment. All these factors when become significant, it can be said that economy is in recession.

How do stock markets work in recession period?
Stock markets reflect the economy - so if the economy is expected to be in recession, the stock markets fall. This is what is currently happening in US.

Can an individual fight recession?
Typically, no. Only the government can take measures to bring back the economy on track. Like cutting interest rates, so that people start spending, cut the taxes so that people can have extra money to spend, then trying to create jobs so that people can earn, etc. Ultimately, the more free flow of money is there, the better the chances of coming out of recession. Recession can never be predicted. People & organizations perceive it coming and they start taking measure to act in that manner. That is what is happening in the US currently. Recession is not officially declared, it is an expectation. Hence, since the markets are efficient, measures are already being taken to counteract it. That is causing the US stock markets to fall.
For an individual, one can only rely on savings for bad times. Relying on your stock holdings can be very risky, as the share prices may fall down significantly.
If you have savings, then you can think of buying a cheaper house during recession. Basically, in recession, one attempts to go against the trend. Table of Contents

Retail Chain Check: Protecting small UK retailers from Supermarkets

How to deal with the menace created due to the conflicts between the upcoming retail and supermarket chains in India & their conflicts with the local vegetable vendors and other small retail stores?
UK has set a nice example. The UK government is going to impose a serious penalty to the big superstores which are found to be indulged in using unfair practices to cut down on prices and throw away the small retailers on the street out of competition. Public shame will automatically follow the superstores or retail chains that are penalized under the new regulation.

The UK watchdogs have taken a tough stand against the Supermarkets that have the potential to use their BIG size to force down prices & throw away the small retailers out of business. If found guilty of such malpractices, such giant retail chains will be penalised under a scheme which is aimed at encouraging open and fair market competition and give more & more choice to the customers. The Competition Commission is today expected to recommend changes to discourage chains from developing local monopolies and forcing smaller stores out of business.
Most importantly, the supervision by this ombudsman is will keep a close watch on the relationship between the giant supermarkets like Tesco, Asda, Sainsbury's, Morrisons, and will watch closely their proceedings and relationships with their suppliers.

The recommendations follow a two year inquiry into the £1.23bn grocery sector. Figures suggest the supermarkets' stranglehold has killed off thousands of smaller rivals. The four UK supermarkets alone have a clear-cut 75% UK market share in grocery business.

The ombudsman is expected to have power to fine companies for sharp price cuts, or for charging new products for shelf space and "pay-to-stay" fees to keep goods on shelves. Large retailers who do not meet competition standards could see planning applications refused.

Not only this, the Competition Commission is also learnt to recommend the appointment of a statutory regulator to adjudicate in disputes between retailers over the price they pay to packers, food processors, farmers and dairy firms. If the supermarkets are found to be indulged in any kind of malpractices and bullying act with the suppliers and farmers, they will be heavily penalized. Not only that, the malpractices will be made public and they will be put to public shame.

Here is the news items, a bit shocking, about how these super markets build up their dominance:
The commission's provisional findings have revealed that 200 areas of the country where consumers had little choice of where to shop, dubbed as "Tesco towns". They also discovered chains were buying up swathes of land to stop rivals building competing stores. Suppliers say that they are forced to bear the losses due to retail chain price-cutting promotions.

The commission's plan for a competition test has been fiercely opposed by Tesco; in Bicester near Oxford, the chain has six stores in proximity.
India already set off on the retail stores journey, where retail stores like Reliance Fresh, More, Spensers, etc. are making dominance in the market, killing out local retail shops. Can we have something similar in India to see how things are working and check the malpractices to have open and fair competition? Table of Contents

Interest Rate Cuts: US, UK and India

It seems to be an almost certainty, that there will be further rate cuts in US, UK and India. There are strong signals from Fed, Bank of England as well as Reserve Bank of India, that there may be interest rate cuts in the coming few weeks.

Yesterday, it was Ben Bernanke, The Fe Chairman, who set the outlook for the coming year, and clearly hinting that the Fed is very open to cut the rates further to help the struggling US economy recover from the so called fear of recession, which some experts believe is unavoidable. How bad the US economy is is clear from the measures taken by US government recently - offering a tax rebate, Warren Buffet making an offer to reinsure municipal bonds & Fed reveals plans to help mortgage defaulters - Just to name a few.

In UK, we have the same story. The Bank of England governor has already expressed deep concerns over the falling standards of living in UK due to substantial price rise in food and fuel costs. Reuters yesterday reported that there is a strong possibility of 2 more rate cuts by Bank of England to bring some clam to the struggling UK economy.

In the emerging markets, India’s Finance Minister and Reserve Bank of India Governor is giving strong signals for a rate cut. The expectations are that in March, there will be some relief from the growing interest rates. Though in a recent statement, the RBI governor had left the field open to the banks to battle it out and many banks in India have deducted their rates for house loan, car loan, etc.
But the latest signal is the fuels price hike by the Indian government. A rise of 4% in petrol (Rs. 2) is the strongest signal, that analysts believe, is sufficient enough to indicate the government is seriously considering a rate cut. Let’s see what goes on - expectations for rate cut are in March. Table of Contents

UK: Standard Life transfers Personal Pensions: Annuities

Almost 50% of the Standard Life Pensioners or Personal pension customers receiving personal pensions or having their pension funds with Standard Life Investments of UK will now have a new insurance firm looking after their pension fund money.

The insurance company Standard Life is offloading responsibility for more than half of its customers who are receiving annuities. The £6.7bn worth of assets which were used to back-up or “insure” the policies have now been transferred to Canada Life International Reinsurance.

T he biggest advantage that Standard Life got from this offloading transfer is that it is now free of any risk that these people might live longer than expected.

"It substantially reduces pure longevity risk while providing a significant increase to embedded value, a release of cash and a reduction in capital requirements," said Standard Life's chief executive, Sandy Crombie.
"It creates capacity to broaden our innovative product range and take advantage of the profitable opportunities available to us."

Almost all the affected transfers are those of the individual UK customers, who have their pension fund investments or money with Standard life. They are largely people who had invested in a Standard Life pension policy before it demutualised in 2006 and had taken out an annuity with the company on retirement.

This is not the first transaction that has happened in recent times. Such bulk deals have become very common in the past few years in the insurance industry, with insurers either transferring chunks of their business to each other, or taking on responsibility for managing closed final-salary pension schemes.

The Standard Life deal is the biggest till date, overcoming others such as Equitable Life transferring £4.6bn worth of assets to Canada Life in 2006.
Insurance experts say that some firms, like Canada Life International Reinsurance in this case, are happy to take on this pension or annuity business to try to make a profit through managing the underlying assets. Table of Contents

Yahoo Job Cut: fires 45 people in Bangalore, India

Yahoo has joined the list of companies in firing employees in India.

Initiated by TCS which fired 500, followed by IBM which fired 700, now Yahoo has shown the door to 4 of it’s employees citing the same old reasoning - Poor Performance, a reason that cannot be quantified.

Sources say that another 100 job cuts may be in the pipeline. God knows where the IT industry in India is heading.

Here is the news items from Rediff (
Yahoo! India, it is learnt, has shown the door to 45 full-time employees across all levels.
Though a spokesperson of Yahoo! India refused to comment on the development, highly-placed sources within the company claimed that it was a routine "trimming process" and more "poor performers" would be sacked.
"Not only are contract employees being sent back, even full-time employees are being asked to quit. Wherever the company is seeing surplus headcount, it is being reorganised. Eventually, more than 100 employees may be asked to quit but performers will be retained," the sources added.
A few days ago, Microsoft made a bid for Yahoo!, and the sacking has shocked many employees in the Bangalore office. "This move has taken us by surprise. In fact, recruitment has been very slow ever since Microsoft made the bid," a senior employee said.

Set up in 2000, Yahoo! India, a subsidiary of Yahoo! Inc, provides internet services, technological tools, and marketing solutions for business both in India and abroad.
Apart from taking care of the Yahoo! India portal, the company operates an R&D; centre in Bangalore. It employs close to 1,000 people in the India operations. Table of Contents

UK Standard of living goes down: may deteriorate further

In one of the most blunt and blatant statements issued by the Governor of Bank of England (Equivalent to Fed in US or RBI in India), Mr. Mervyn King, has issued a formal warning to the UK citizens about the deteriorating status of standard of living that has gone down significantly in the past few months and he warns that the situation may deteriorate further.

The statement from the Bank of England Governor cites the reasons of “rising food prices, sky-rocketing fuel costs, inflation and unaffordable interest rates on housing finances”.

Britons have enjoyed a decade of high spending on luxury goods, holidays and second homes, fuelled by low interest rates, easy credit and near-record lows in living costs. Inflation is UK has hit the seven months highest value, where in the fuel price inflation is at around 19.5%, its second highest in the decade that starts from 1997 to 2008.

Though the governor indicated that Britons may expect further rate cuts, but the cut will not be substantial in value to help the falling economy. He cited that though there have been many rate cuts offered by Bank of England, but it is not surprising that the mortgage lenders and other loan offering organizations are not passing on the benefit to the citizens, because all of them are perceiving tougher economic conditions ahead, where things may go from bad to worse.

Sending a warning to families who expect the value of their home to increase in the coming years, Mr King added: "Looking several years ahead, there’s no reason to expect house prices to be markedly above where they are now. It’s conceivable there might be falls in house prices."

The falling standard of living is just a precursor.
Gone are the days when people used to spend lavishly on fancy gadgets, new cars, second homes and other costly accessories. It’s time now to worry about the basic necessities of life - paying the monthly bills may turn out to be problematic for many people. As per a study by “The Daily Telegraph”, the household bills have gone up by GBP 1300 per year. Table of Contents

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