The elimination of the initial issue expenses for the close-ended mutual fund schemes will now change the dynamics of this area in the mutual fund industry. This move will force the mutual funds to act in a certain manner and then the investors will also be able to know in a clear and transparent manner what is exactly happening to the money invested by them. Wire money online to India with Xoom.com for as low as $4.99. Till recently for a close-ended scheme the entire amount of initial issue expenses charged to a newly launched scheme could go up to6 per cent. This could be amortised over the close ended period. This often leads to a situation where the net asset value (NAV) at a particular time factors in only the issue expense that have been taken into consideration. Thus a person who is an investor does not know the amount that has not been amortised and the kind of impactthat this will have on the NAV in the coming years. While the situation might seem clear for the experts and industry players for the normal investor the entire matter is quite confusing. This is true especially because the annual amortisation is adjusted in the NAY. Now with the elimination of this figure for amortisation there is no amount that is hidden. The NAV is something that the investor can consider as being the final figure that they will be using for the purpose of valuing their investment without any other calculations entering into the picture. Currently there is no entry load present for the investor in close ended schemes. With the elimination of the initial issue expenses the entry load makes an entry back in the investment process. In effect there is a specific amount that the investor will have to bear when they are making the investment though the good news is that the entire initial issue expenses will be made out of this amount. There will not be anything extra in the process and the figure is thus known by the investor upfront. In reality the investor is likely to be in a better position than before because it is highly unlikely that the funds will charge something like 6 per cent as the entry load while in case of the issue expenses this is what the figure could come to. In that sense [...]
Archive for February 18th, 2008
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FREE UP LOANS
February 18th, 2008 
krishna A softening of housing sector interest rates now appears likely soon with the government expressing concern over the decline in credit growth in the housing and consumer durables sectors. In a review meeting with the chiefs of public sector banks, Finance Minister P. Chidambaram suggested they should ‘ensure adequate’ credit growth in these sectors. Wire money online to India with Xoom.com for as low as $4.99. According to bankers who attended the meeting, the government has given them sufficient indication about a reduction in the interest rates, particularly in housing. “In the given scenario, a fresh round of interest rate cuts by 25-50 basis points is expected shortly;” said a leading banker on condition of anonymity. Some banks and financial institutions such as State Bank of India and HDFC have already reduced the rate by 25 basis points. The finance minister is learnt to have advised bankers to ensure adequate loans in certain productive areas such as housing. After the meeting, Chidambaram said that there has been a slow down of credit growth. “This slowing down of credit has indeed, to some extent, affected the flow of credit in the housing and consumer durables sectors,” he said. The finance minister admitted that these areas – housing and consumer durables – had been partly affected by a “conscious” moderation in credit flow in the past year. He said these issues came in for discussion during his meeting with the bankers, adding that they have been advised to pay attention to the credit needs of home seekers and those who were prospective buyers of consumer durables and non-durables. “The government does not want this or that, it simply sensitises the banks to the demands of the consuming public. So, the banks have to respond to the situation. Government does not give them directions or orders. We have sensitised them to the need of the housing sector and consumer durables,” Chidambaram said. Canara Bank Chairman MBN Rao said that there is· case for softening interest rates. With ample liquidity in the banking system, the interest rates for home and car loans; besides Joans for small and medium sector and consumer goods, would come down,” he said.
TO SAVE THE TIGER
February 18th, 2008 krishna It is now official that the Indian tiger is in a state of terminal emergency. The final tiger census and habitat mapping report, which was released; says that there are only 1,411 big cats left in the wild. Whenever we discuss our conservation efforts, the first reason given for this sorry state of affairs is that there’s no political will to save the tiger. The second answer invariably is that the growth of human population has destroyed tiger habitats. There is truth in both these answers. But the manner in which these arguments were placed before us made us believe that there was no other way to see this decline in the numbers. This tunnel vision has overshadowed the most important reason behind this decline in the number of big cats: people never joined the tiger conservation programme. The tiger was appropriated by a handful of people – inside and outside the government – and only they decided how the tigers should live or die. The larger world was never factored in. The upper class and the English-speaking elite have always dominated ‘conservation’ issues in India. This is a great loss because they were protecting something that was never truly theirs. The loss of forest cover or shrinking of tiger habitats never affected their lives. The people who were affected by any attack on the forests were those who depended on them -like the tribals. And, unfortunately; the elite who were trying to save the tiger had little place for these forest-dependent people. For them, they were the fall guys. It takes no rocket science to prove that when population increases, wildlife and forests decline. But the conservationists got the nation consumed on a debate, a non-issue really; about the co-existence of people and tigers. It was broadly agreed by everyone that tigers need inviolate space for breeding and securing their future. The next logical level should have been to create that space by voluntary and just relocation of forest dwellers. In many tiger reserves, people living inside had agreed to move out of the parks. For instance, in the few remaining villages of Kanha and Sariska, most villagers agreed to get out and were waiting for a fair compensation package of land and money. But in 30 years, our tiger protectors could manage only a few ‘successful’ relocations: Bhadra Wildlife Sanctuary in Karnataka, Corbett in Uttarakhand, some villages [...]
TRANSCENDENTAL EDIFICATION
February 18th, 2008 krishna My tryst with Mahesh Prasad Varma a.k.a the Maharishi Mahesh Yogi started – and pretty much stopped – when I came across a scene in a documentary on the Beatles. It showed a scraggly looking sadhu holding a bunch of flowers surrounded by the Sgt Pepper-era Beatles. I took note of two things: one that a place called Bangor in Wales exists (which is the station in which the Fab Four met the Fab One); two, that the Beatles had an Indian connection apart from Ravi Shankar. The fact that George Harrison was responsible for introducing the rest of the Beatles to the inventor of Transcendental Meditation- practised for 20 minutes a day with the eyes closed – was something I found dodgy about the Quiet Beatle despite having a special fondness for him. The other fact that Harrison and the rest of his band mates and their wives/girlfriends – not to mention a few members of the Rolling Stones – grew quickly weary of the Maharishi, made me curious about the scraggly bearded fellow. It turns out that in 1968 when the Beatles and their friends visited Rishikesh to attend an extended TM session, the Maharishi reportedly jumped on Mia Farrow. Subsequently Lennon wrote his White Album track, Sexy Sadie, asking the ‘camouflaged’ guru, “Sexy Sadie what have you done/ You made a fool of everyone.” It was later found out that ‘Magic Alex’, a Beatles hanger-on, had apparently concocted the bit about the Maharishi jumping on Beatles’ lady friends. Mia Farrow herself, in her autobiography, What Falls Away, denied any mystical physicality or physical mysticality – from the Yogi. Apart from the Beatles connection and some news about TM allowing one to float on air – the Maharishi happily eluded me. I passed his ashram in Rishikesh once, only to hear that he lived in Holland now. Today; I hear he has died in a Dutch town called Vlo-drop. So thanks to the Maharishi I now know of Bangor as well as Vlo-drop. Jai Guru Deva.
