Prajna Capital |
- Savings on Securities Transaction Tax (STT)
- Health Insurance for Senior Citizens
- How Global Liquidity affects stock prices?
| Savings on Securities Transaction Tax (STT) Posted: 03 Jun 2013 05:10 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
The cost of merging schemes will come down significantly post June 1, 2013...
Come June 1 and investors can breathe a sigh of relief. The Securities Transaction Tax (STT) which is levied at the time of buying equity-oriented mutual funds from stock exchanges goes away then. Moreover, on redemption of equity funds, the STT will go down from the current 0.25 per cent to 0.001 per cent (See: Changing rates). What this amounts to is that on redemption of Rs 1 lakh, the STT will go down to Re 1 from the current Rs 250.
The move benefits AMCs which plan to merge their fund schemes as the cost of merging schemes will come down significantly. At present, each time such a merger happens, the units of the schemes which are being merged are sold and then new units bought into the scheme into which it is being merged. With this move, AMCs can think of merging schemes far more easily. As for investors, the change in rates will curtail their losses, especially the double STT that they otherwise pay. Not only do they pay STT on all the transactions in the stock market when a fund buys or sells securities, they also pay STT when an investor sells units from the fund house. In the new scheme of things, investors will only pay STT when the fund manager buys and sells securities.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Health Insurance for Senior Citizens Posted: 03 Jun 2013 04:31 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India) Look for policies with least number of exclusions while buying health insurance for senior citizens...
We have shortlisted two policies-- Apollo Munich Optima Senior and Star Senior Citizen Red Carpet Plan for your needs. Both these policies are for senior citizens and offer lifelong renewal. These plans offer maximum cover up to Rs 5 lakh. Both policies cover hospitalization expenses, pre and post hospitalisation expenses and ambulance expenses. Apart from these benefits, each plan has its own USP.
Apollo Munich Optima Senior
Star Senior Citizen Red Carpet
Comparing the features, Apollo Munich Optima Senior is a better policy but its benefits come at a higher price. Apollo Munich also offers a discount of 5 per cent if both husband and wife buy the same policy and an additional 7.5 per cent discount on premium if you pay 2-years' policy premium together.
We recommend you to go for individual cover over a floater cover because it may happen that one of the insured member uses major chunk of the Sum Insured leaving little or no cover for other members. Do not take floater policy for your parents
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| How Global Liquidity affects stock prices? Posted: 03 Jun 2013 04:17 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
The last two years have been unusual in that there has been a massive global divergence between fundamentals and equity valuations. While there has been a global recession, share prices have risen across most markets.
The reason for prices rising in the face of economic weakness has been a flood of liquidity.
The US Federal Reserve has pumped out about $ 85 billion a month in the name of quantitative easing; the European Central Bank has also maintained an easy money stance and more recently, the Japanese have started to ease money supply.
That liquidity has to go somewhere and a large proportion has ended up in equity. While equity isn't massively over- valued in India, it is certainly on the high side of justifiable. Similar situations hold true for the US and many European markets.
Could there be a further upside to stock market prices if there is a growth revival? This isn't necessarily the case. If the liquidity dries up or the taps are tightened, equity prices could slide even if growth improves substantially. However, a divergence in the direction of under- valuation would be more welcome than the current divergence in the direction of over- valuation.
What is fair valuation for the Indian market anyway? Answering that question is difficult. First, consider share prices and valuations. The major indices like the Sensex and Nifty have recently tested levels seen in early 2008. In 2008, the indices were running at valuations equivalent to 25 PE or higher. Now, the valuations are at about PE 18- 19 for the same index levels.
While 18- 19 PE is not cheap, it is not as over- valued at 25- 26 PE. On those grounds, an investor would be more comfortable now than in 2008. However, the compounded earnings growth across 2007- 08 to 2012- 13 has been just about 6- 7 per cent for the Nifty. If you factor in the high inflation across this period, earnings growth net of inflation effectively translates to near- zero. By that logic, the market is seriously over- valued.
By comparison with rupee interest rates in the 7- 8 per cent zone, fair valuation would be somewhere between PE 13- 14 or perhaps, a little lower. Of course, the key buyers have been FIIs who are looking at much lower hard currency rates in the 1- 3 per cent range. Even with currency risk, the lower hard- currency rates justify higher PEs, assuming that India exposure is desirable. Incidentally, although smaller stocks and mid- caps have delivered less in the way of capital gains than large stocks, they also have poor overall earnings growth rates. The lower capital gains is easily explained by the fact that FII exposure to smaller stocks is low or nil. The earnings record is more difficult to explain. One can infer larger businesses are less vulnerable to recessive conditions and high interest rates. But it would take us far beyond the scope of this column to prove it.
Now, if there's a pickup in macro- economic growth rates and a fall in inflation as well, earnings growth could accelerate considerably. In analyst jargon, there's room for positive surprises. In the Q3, 2012- 13, GDP growth dropped to 4.5 per cent, which was the lowest growth rate in a decade. Overall, 2012- 13 saw GDP growth of somewhere between 5- 5.5 per cent. A bounce above 6 per cent in terms of 2013- 14 GDP growth is quite likely and it is possible that GDP growth could climb back above 7 per cent by 2014- 15.
Inflation is also showing signs of cooling off and the interest rate cycle is clearly headed down. The RBI has cut the Repurchase rate by 125 basis points in the past 12 months. It could cut by another 225- 250 basis points over the next two years before the interest rate cycle bottoms out.
If the economic cycle hits the sweet spot, we might see earnings growth picking up till around 15 per cent, while rupee interest rates drop to say 4- 5 per cent by 2014- 15. Assuming similar liquidity conditions, this would give the Indian stock market a considerable upside.
However, one cannot assume similar liquidity conditions.
The US may cut back on its QE sometime in the next 12 months, and maybe a lot earlier. Nor can one assume a similar risk- on attitude where Indian assets are concerned. A certain amount of political turbulence in guaranteed over the next couple of years. The FIIs may have been prepared to risk investments into a country with an apathetic and corrupt, but stable regime. They might cut exposures drastically if the alternative is a succession of apathetic, corrupt and unstable regimes. If that's the case, equity prices would fall even as the fundamentals improve. This would actually be an ideal situation for a long- term investor. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
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