Thursday, May 08, 2008

Rupee falls to one-year low of 41.77/dollar
Resuming its slide against the greenback, the Indian rupee plunged to its more than one-year low of 41.76/77 against a US dollar.
Heavy demand for US currency in view of high oil prices continued modestly on its short supply.
The Interbank Foreign Exchange (Durex) market witnessed brisk trade with wide fluctuations in the local currency in a range of 41.55 and 41.79 during the day. The local currency lost 41 paise against the US counterpart.
The rupee resumed sharply lower at 41.59/60 a dollar from its last close of 41.35/36 a dollar. The rupee is hitting this level for the first time since April 20 2007 when it closed at 41.76/77 per dollar.
Meanwhile, the Reserve Bank of India [Get Quote] Governor Dr Y V Redder said the situation is reflective of the "global uncertainties".

Tuesday, October 30, 2007

Fall in Home Prices (USA)

Here are the year-over-year nominal price changes for the 20 cities covered by the index:

Tampa, down 10.1%;
Detroit, down 9.3%:
San Diego, down 8.3%;
Phoenix, down 8%;
Miami, down 7.8%;
Las Vegas, down 7.6%;
Washington, D.C., down 7.2%;
Los Angeles, down 5.7%;
San Francisco, down 4.2%;
Cleveland, down 4.1%;
Minneapolis, down 4%;
New York, down 3.8%;
Boston, down 3.6%;
Chicago, down 1.3%;
Denver, down 0.4%;
Dallas, up 0.5%;
Atlanta, up 0.8%;
Portland, Ore., up 2.8%;
Charlotte, up 5.6%;
and Seattle, up 5.7%.

For Detailed Report click
Fall in home prices

Monday, October 01, 2007

Wanna Be A Global Player - How about having a U-BRIC-M Portfolio?

Following Table is self explanatory!

Table contains some leading stocks from UBRICM. (United States, Brazil,Russia,Inida,China & Mexico). I have created this based on my ROI analyis on these leading countries. Thats 84% ROI over a period of 1 year. (ofcourse, its a post analysis and not a fortune teller).

Interesting thing is ROI shooted from 67% to 84% in just 5 trading days. This portfolio will bring decent fortune for medium to long term investors. All are listed in US Stock Market

U-BRIC-M thats the new acronym which I have coined for this portfolio. Whats your say on U-BRIC-M?

Friday, September 21, 2007

Why buy a home when you can rent one?

Copied from ET - Thought of putting it in my blog - Good Financial Analysis on Home

Why buy a home when you can rent one?

It’s obvious, isn’t it—if you pay rent for years, you’ll have nothing to show for it in the end, but if you used that money to pay home loan instalments instead, you would be creating an asset. This was the question Tarun Banerjee was pondering. But he couldn’t shake off the suspicion that the truth may be more complicated. Tarun, aged 37, is a senior-level financial services professional, married with two kids. He’s had his eye on a threebedroom flat in South Delhi, costing Rs 60 lakh. He would need to pay Rs 10 lakh up front, and borrow the remaining Rs 50 lakh. The 20-year equated monthly instalment (EMI) for the loan worked out to Rs 51,610 per month. Tarun wasn’t worried about the EMI, though—he could afford it. But he wanted to do a spot of number crunching. So we did a comparison of how Tarun would fare if he bought the flat, and if he rented it.


Most people consider buying a house because of the tax breaks: the interest component of the EMI, up to Rs 1.5 lakh, is exempt from income tax. The maximum you can save in the highest income tax bracket (33.99%) is Rs 51,000. As for the principal, the tax benefit under Section 80C of the Income Tax Act is lost if, like Tarun, you pay the principal from your Provident Fund and insurance.

Also, since Tarun would take a loan of Rs 50 lakh, he would need life insurance, to protect his family from liability in case anything happened to him. We suggest two term insurance plans of Rs 25 lakh each, for which he would pay an annual premium of Rs 9,000 for each. Why two policies? Because 15 years into the loan period, the amount pending repayment would be Rs 25 lakh. If he bought a policy each of 14 and 20 years’ duration, he would need only one policy from the 15th year.

The net cash flow (tax savings on the Rs 1.5 lakh deduction, minus insurance charges) would be invested in diversified equity mutual funds, and would grow to Rs 26.78 lakh in 20 years, assuming the mutual funds give a tax-free return at a compounded annual growth rate (CAGR) of 12% (a reasonable assumption, as equity has given 16% returns over a 26-year period, and the future looks even better)

I assumed a year-on-year growth of about eight per cent in the property value. Tarun was shocked: “Doesn’t it grow by 30-40 % year on year?” I explained my reasoning. If property grew at that rate, this property would be worth Rs 2.23 crore in just five years! Now, if you want to sell, there should be buyers, right? If someone was going to rely on loans to buy property, they may have to borrow Rs 2 crore, and fork out an EMI of Rs 2 lakh. Not many people can afford that. Salaries are growing on an average at the rate of 10-15 % a year, so rising incomes cannot take care of that. The explosive growth of the past three or four years is unlikely to occur again in the future. Some exceptional mutual funds have given returns of 800-1000 % over a five-year period, but that, too, is going to be difficult to replicate (this is why I reckon a 12% CAGR for mutual funds). Historically, too, property has grown at a sedate, single-digit rate. An 8% return thus seems realistic over a 20-year period. In fact, after deducting 0.5% for society charges, property tax, and so on, net growth would be around 7.5%. The property is likely to be worth Rs 2.55 crore after 20 years. The total corpus then would be Rs 2.82 crore. Tarun was underwhelmed.


What if he were to rent the same flat? The rental norm for prime residential property is 6% per year of the property value, so let’s assume that figure throughout the 20-year period, although it’s more likely to be less than 6%. Anyhow, we reckon Tarun would pay Rs 3.6 lakh as rent in the first year, with 5% annual increases in subsequent years. Since he could afford an EMI of Rs 51,640, he can easily afford this rent. The amount available after rent is invested in a mutual fund. At 12% CAGR, this would yield Rs 97 lakh in 20 years. Plus, we would put the Rs 10 lakh that Tarun would have paid up front to buy the flat in a mutual fund. This would grow to Rs 96.46 lakh after 20 years. Add to this the tax saving that Tarun would claim on rent. The tax-exempt amount would follow the one-in-three formula: either 50% of the basic rent declared by Tarun’s employer, or 10% of rent above the basic, or the actual house rent allowance . It is reasonable to assume Tarun would claim a deduction of 75% of total rent paid. The tax saved would also be invested in a mutual fund, and would amount to Rs.1.03 crore in 20 years. So the total cash flow is Rs 2.96 crore. The comparison The final corpus in both cases is not too different, right? Renting would leave Tarun with Rs 14 lakh more than buying his own place. Now, some might argue that comparing a cash flow with real estate is like comparing apples and oranges. So let’s see what happens if the whole corpus is converted to cash. If he bought the flat, Tarun would pay Rs 10 lakh as long-term capital gains tax. If he rented, he would pay not tax. So renting actually leaves him with Rs 24 lakh more. If we tweaked some numbers , the situation would still not be vastly different. The last I heard from Tarun’s wife, he was still looking at properties—to rent!

(The writer is chief financial planner, Ladder 7 Financial Advisories)

Thursday, September 20, 2007

Hit on IT Comp - INR Vs USD

Last 2 months Performance of Indian IT companies due to INR appreciation and $ depreciation.

Sensex increased by 5% in last 2 months, where as BSE IT index dropped 11.41 %.

INR is expected to appreciate further in near future. Its time to exit IT Stocks.

Exponential Growth in IT Service Sector in terms of ROI wont be possible...

It may not attract more investors any more....

Wednesday, May 09, 2007

Sivaji Makes History

Copy pasted from a forwarded email (not sure whether the statistics are real or just a hype!)

Sivaji - The Boss! Celebrations Started, Enjoy!!!

Yes, Indian Film Industry is eagerly waiting Reason? It's release of Rajni’s latest movie Sivaji.

Some Facts:
Rajnikant's Remuneration = 2 * Remuneration of (Amitabh + Abhishek + Hrithik + Aamir + Shah Rukh). Releasing worldwide in 27 countries on same day with about 2900 theatres. (Earlier Record - Krish in 14 countries in 1200 theatres).

India-2200 theatres, China-211 theatres, Japan-130 theatres, Singapore, Malaysia, Hong Kong-100 theatres, Saudi Countries-100 theatres, USA-80 theatres, UK-70 theatres and this release is only behind Casino Royale which is released in 36 countries in 3200 theatres.

Rajnikant's Remuneration in his last 3 movies:
Baba 20 crores Chandramukhi 25+ crores Sivaji 40+ crores.

Rajnikant is only behind Jackie Chan in terms of remuneration in Asia.
1. Out of all the shankar movies this is the costliest. 68% of expenses he Spent for location and surprisingly 12% to graphics!!!! 8% to salary (Excluding of rajini) 8% for costumes 2% for a.r.rahman and other Techincians, and the balance 2% wastages

2. First time in tamil movie amitabh is joining with rajini... As guest Role.(becos of his convienence two days shooting has arranged in pune.!!

3. Similarly Malayam superstar mamooty and telugu megastar chiranjeevi are also acting in this movie for only one scene

4. Sivaji movie has sold already to Kerala for 6 crores,(all-time high)-the Luckiest person who got distribution is our actor vineeth

5. All time high in andhra pradesh-17 crores (sleepless night for all top hero's of Andhra)

6. All time high in karnataka 9 crores (the luckiest person who got distribution is our kannada hero ravichandran

7. The most expected and very big competition is going in tamil nadu, as per the latest information the final fight between sun-tv and reliance for around 80 crores including of satelitte/dvd/ audio rights

8. International rights for 100 US million dollars for 9 locations / countries including of dvd rights. Fight is going between "ayangaran" of canada and pyramid of india

9. AVM production announced they will give 25% profit to the charity (Sivaji Foundation) if the movie touch silver jubilee

10. First time in the history of rajini movie, he himself given interview, as this movie will be great success, courtesy times magazine.

11. As per the cover story of no:1 Japanese magazine called "tosho" has mentioned this movie has crossed the expectation of the holly wood movie of "casino royale" and the second highest paid actor in asia is our one and only super star Rajinkanth next to Jackie Chan .

12. Also the "tosho" magazine revealed the total revenue for AVM production, if the movie successfully runs for 50 days in southern region will be around 430 crores. First time this movie is going to be dubbed in local language of Turkey, Hausa, gonga (tribal language of south Africa) and kshinola (tribal Language of Argentina)

Ranjikant donated around 160 cores for charity (old age homes and orphanages) other than the trust he runs whose maintenance is around 17crores per annum.Rajnikanth to build hospital according to the reliable sources, super star Rajnikanth has bought eight acres of land at Ponneri (outskirts of Chennai), and propose to construct a hospital for the poor and needy, as well as to build a school there. Rajnikanth and his fans associations are known for their work towards social causes. Recently there was news that Rajnikanth sent in messengers along with help to those who crossed shores from Sri lanka to Rameswaram. Talks are that Latha Rajnikanth might take care of the proposed hospital and the school project at Ponneri. Latha Rajnikanth is running successfully "The Ashram" school in Chennai, also managing the Dhaya Foundation

Mini Biography :
Shivaji Rao Gaekwad (Rajnikanth) was born on December 12, 1949 in Karnataka. He was a bus conductor during which time he reportedly caught the fancy of the bus travellers with his mannerisms and style of issuing tickets and blowing the whistle and so on. Looking to become an actor, he moved to Chennai and joined the film institute. It was here that he caught the eye of K. Balachander, a director known for introducing talented, new faces into the tamil film industry. Balachander gave him a small role - as the no-good husband of Srividya - in Aboorva Raagangal and the rest, as they say, is history. Rajnikanth soon graduated to playing villains and his style, swagger and casually unique brand of villainy vowed the movie-going public. Be it the sadistic husband of Sujatha in Avargal or the wolf in sheep's clothing in Moondru Mudichu or the lust-filled village rowdy in Bharathiraja's 16 Vayadhinile, Rajnikanth was the villain the people loved to hate.From here, it was a small step for Rajni, playing the anti-hero and finally, the hero in Bhairavi. Rajnikanth firmly captured the vacant, action-hero slot in tamil movies with a series of movies where he routinely bashed up the bad guys who had done him injustice in one way or the other. Once in a while he did movies like Aarulirundhu Arubadhu Varai or Johny which gave us glimpses of his acting potential. But action was what the fans expected from a Rajni movie and action was what he gave them. He has been superstar for the past 25 years.