29 August 2013

Investment Focus - M&M Finance FD: Invest :: Business Line

These are troubled times for India’s equity and debt markets. Slowing economic growth and a freefall in the value of the rupee vis-à-vis the US dollar, besides other major global currencies, are among the chief reasons for this state of affairs. With most asset classes under pressure to perform in such a scenario, one relatively safe investment option stands out -- fixed deposits.

HIGH SAFETY

Mahindra and Mahindra Financial Services (MMFSL) a leading non-banking financial services company, predominantly engaged in automobile financing, offers attractive rates on its two- and three-year fixed deposit schemes.
The company’s FD has been rated FAAA by CRISIL. This assures the highest level of safety for your principal and interest receivable. So, the chance of you losing your principal or interest is the least. The minimum amount you may have to invest under this scheme is Rs 10,000.

ATTRACTIVE RETURNS

MMFSL offers 10 per cent interest annually on the money you invest under the cumulative option for a 24-month period. If you are looking to invest your surplus funds over a longer time horizon, you can go for the three-year option. The company offers 10.25 per cent annually under the cumulative option for a three-year period.
If you are a senior citizen, who has completed 60 years of age, you are eligible to receive an additional 0.25 per cent as interest.
This is much higher than the interest rate offered by other FD schemes with a comparable rating. For instance, Sundaram Finance with an MAAA rating by ICRA, which also denotes highest safety, offers 9.5 per cent interest annually on its two- and three-year deposits. Senior citizens are entitled to an additional 0.5 per cent. MMFSL’s FD, despite being rated at par with Sundaram Finance’s FD in terms of the safety of the principal, offers 0.5 per cent more for the depositors. The tax treatment is similar to other FD schemes.
Interest income beyond Rs 10,000 will attract a TDS of 10 per cent if you fail to provide a 15G/15H declaration stating that your interest income is within the exemption limits.
Having started as an exclusive financier for M&M’s vehicles in 1993, it has gradually diversified into vehicles of other manufacturers. In the last two decades, the company has also reduced dependency on commercial vehicles and tractors by foraying into utility vehicles, cars and construction equipment.
With an improvement in the business fundamentals, it has managed to improve its asset quality significantly over the last four years. Its gross non-performing assets, (the measure of the quantum of bad loans), have improved from 6.4 per cent to 3 per cent. MMFSL’s disbursement grew 31.8 per cent in the June quarter. The net interest margin stood at 8.6 per cent for the quarter.

Fixed maturity plans (FMPs) vs fixed deposits (FDs) :: Business Line


REC Tax Free Bonds Issue '2013 Issue Opens : 30th August'2013



REC Tax Free Bonds Issue '2013

Issue Opens : 30th August'2013

Issue Closes : 23rd September'2013

 
Series of Bonds*
Options For Category I, II & III*
Tranche I Series 1 ATranche I Series 2 ATranche I Series 3A
Coupon rate (%) p.a.8.018.468.37
Annualised yield (%) p.a.8.018.468.37
Options For Category IV only#
Tranche I Series 1 BTranche I Series 2 BTranche I Series 3 B
Coupon rate (%) p.a.8.268.718.62
Annualised yield (%) p.a.8.268.718.62
For Category I, II, III and IV#
Frequency of interest paymentAnnualAnnualAnnual
Minimum Application size5 bonds (Rs. 5000), across all Series of Bonds
In multiples of1 bond (Rs. 1000) , across all Series of Bonds
Face valueRs. 1,000 per Bond.Rs. 1,000 per Bond.Rs. 1,000 per Bond.
Issue priceRs. 1,000 per Bond.Rs. 1,000 per Bond.Rs. 1,000 per Bond.
Tenor10 years.15 years.20 years.
Coupon TypeFixed coupon rateFixed coupon rateFixed coupon rate
Redemption Date10 years from the Deemed Date of Allotment.15 years from the Deemed Date of Allotment.20 years from the Deemed Date of Allotment.
Redemption Amount (Rs./Bond)Repayment of the face value along with any interest that may have accrued at the Redemption Date.Repayment of the face value along with any interest that may have accrued at the Redemption Date.
Repayment of the face value along with any interest that may have accrued at the Redemption Date.


Tackling credit card fraud :: Business Line


Telecom: Management meet: Competition to remain benign, expect fall in spectrum prices ::Credit Suisse

● In our recent meeting, Bharti Airtel's management indicated that
the competitive environment continues to improve. There is
significant upside to tariffs based on industry economics, and the
limiting factor, if any, would be customer behaviour. So far, this
factor has been quite accommodative.
● It is possible that momentum on tariff increases takes a breather in
the seasonally weak Sep-quarter, but the upward trajectory should
resume from the Dec-quarter. Management explained that 50%+ of
the near-term USD/INR mismatch is hedged, while the USD debt
repayments start only after 18 months (average tenure 4.5 years).
● Bharti Infratel has no plans to acquire Airtel's African tower assets.
Acquisitions, if any, will likely be domestic or from other foreign
operators/towercos. In the current economy, this seems unlikely.
Hence, the company could be open to increasing dividend payout
as a possible use of surplus cash.
● After attending TRAI's OHD on spectrum auction, we believe a
significant cut to reserve price is likely. This should be positive for
incumbents. Reiterate OUTPERFORM on Bharti/Idea.

John Mauldin | August 27, 2013 | Guidance Schmidance ... Show Me the Money

Guidance Schmidance ... Show Me the Money
By David Zervos, Jefferies & Co.
"Actions speak louder than words."
"Talk is cheap."
"Speak softly and carry a big stick."
These are common aphorisms which have been used historically to admonish those with loquacious tendencies to pipe down. They are words of wisdom — and something our central bankers should think about long and hard. The release of the minutes yesterday confirms that there is a campaign within the core of the Committee to wean our economy off of an ever-increasing central bank balance sheet and to rely instead on "words" for the necessary accommodation. The recent work from the SF Fed, along with some tortured paragraphs on forward guidance in the minutes, indicates that "the power of mental persuasion" is fast becoming the central monetary policy tool for the FOMC. To make the concept simple, they are replacing the big stick of money printing with the cheap talk of forward guidance.
Why are they doing this? Well, reading between the lines, it appears that many on the Committee are nervous about the size of the USD 4 trillion balance sheet. It is a BIG stick — and frankly it has worked pretty darn well at creating a reflationary recovery. But as we in the market and those on the Committee know all too well, there are some nasty long term negative side effects from excessive QE usage — the difficulty in draining excess reserves effectively down the road, the potential for creating politically sensitive mark-to-market losses, and of course the big kahuna: the systemic risks arising from excessive leveraged risk taking in fixed-income markets. On this last point I found this passage in the minutes quite revealing:
Some participants also stated that financial developments during the intermeeting period might have helped put the financial system on a more sustainable footing, insofar as those developments were associated with an unwinding of unsustainable speculative positions or an increase in term premiums from extraordinarily low levels.

US Mkts :: DOW +48 :: SGX @ 5300 + 32 points ( 7.10 am )

US Mkts :: DOW +48 :: SGX @ 5300 + 32 points ( 7.10 am )
Dow: 14824 +48 +0.33%
Nasdaq: 3593 +14 +0.41%
S&P500:1634 +4 +0.27%
Nikkei: 13381 +42 +0.32%
Infy: +0.09%, Wit: +2.24%
Ttm: -0.04%, Rdy: 0.00%
Hdb: +1.94%, Ibn:+3.14%
Slt: +3.14%, RIGD -4.35%
Us/Inr $68.83, Eu/Us 1.33
Dix: 81.43 Us/JPY 97.73
Gold: $1416, Silver: $24.35
Oil: $109.35 Brent: $115.86
SGX Nifty: 5300 +32 +0.47%
U.S. stocks on Wednesday advanced for the first session this week, with oil producers leading the gains as the price of crude settled at a more-than-two-year high above $110 a barrel.
Oil costs escalated on the view that military action against Syria could be coming.