September 07, 2016
September 06, 2016
September 06, 2009
life in general: oh gujarat!
The tragedy that has engulfed the state of Gujarat in India since March 2002 is of unprecedented proportions.
Here is Harsh Mander in Hindustan Times a few days back:
Closure, yet so far
Of the many failures that characterise the polity and society in contemporary Gujarat, probably the most dangerous is the unprecedented extent of the arrest and collapse of processes of authentic reconciliation, because of which wounds refuse to heal. People of diverse faiths live side by side or in segregated ghettoes but in an uneasy, warped, brittle truce, without the restoration of genuine trust and normal social and economic intercourse.
The State remains openly hostile to a segment of citizens only because they belong to a different faith from the majority, reflected in raucous and openly prejudiced sectarian taunts in speeches of senior elected public leaders. They cast aspersions on the patriotism of Muslim citizens, parody their supposedly pervasive practices of polygamy and breeding large families, decry the alleged slaughter of the cow despite deep reverence towards her by Hindus, and claim their wide sympathies with terrorist violence.
Muslim ghettoes are routinely discriminated in public services, Muslim youth are picked up almost randomly on charges of terrorism and their deaths in ‘encounters’ or extra-judicial killings are explained away by State authorities with rarely even the façade of any credible evidence of their terrorist links and the circumstances in which it became necessary for the latter to take their lives without the due process of law. Their Muslim identity is accepted as reason enough to believe that they must have been terrorists, and terrorists do not deserve the protection of law.
There are few organised social and political spaces — official or non-official — in Gujarat today, for fostering forgiveness and compassion. There is instead a frightening communal chasm, accepted or actively fostered by the powerful political, administrative, business and media establishments. This engineered divide is growing exponentially between people of different religious persuasions. An ominous subtext characterises re-engineered social relations: new realities of settled hate, settled fear and settled despair in all villages and urban settlements that were torn apart by the gruesome mass violence of 2002. Gujarat continues to be a society bitterly, and some now grimly fear, permanently divided.
After the communal bloodbath that accompanied the vivisection of the country as it seized its independence, leaving a million people dead, there have been thousands of riots, or episodes of mass clashes between people of Hindu and Muslim faith, and pogroms, resulting in the loss, according to one painstaking estimate, of at least 256,28 lives (including 1,005 in police firings). It is remarkable that despite this recurring communal bloodletting during and after the traumatic partition of the country, there has been no systematic structured official (or even significant non-official) processes of ‘truth and reconciliation’, to help perpetrators and survivors of hate violence come together; to see and speak to each other; acknowledge their crimes and failings, their hate and fear, their grievances and suspicions; to seek and offer forgiveness, trust and goodwill; and ultimately help bring closure and eventual healing.
Given the enormity of contemporary threats posed by a deliberately fostered communal divide and violence to the very survival of secular democracy in India, fuelled further by the manufactured global ‘war on terror’, it is imperative today more than ever that systematic, sustained processes of reconciliation and justice in communal relations between sporadically embattled people of diverse faiths and ethnicities in India are established.
The Indian people have arguably had more experience than most through millennia of living with diversity. Therefore, even without organised processes of reconciliation, there are usually natural spontaneous processes of reaching out and healing that follow bouts of sectarian violence. There may be debates about whether without structured modes of facilitating reconciliation for survivors of the cataclysmic Partition violence of 1947, there has been adequate closure for families that experienced the agony and permanent uprootment from and the irreparable loss of their loved ones and homeland.
My own parents and their extended families lost their homes amidst hate, slaughter and arson in a region of the country that became a part of Pakistan in 1947, and their grief of loss remains dormant more than 60 years later, just below the surface. Perhaps we needed much earlier to bring together people who lived with the violence from both sides of the border, to share truth, discover their common burdens of suffering and privation, and thereby find the spaces for individual and collective forgiveness.
In other communal conflagrations that I have witnessed and handled in small district towns as a district administrator, I have observed that within days of such mass sectarian upheavals, persons of goodwill and compassion reach out from each community and others grasp their outstretched hands gratefully. There are spontaneous individual and collective expressions of remorse and grief at the loss suffered by the other community, and of compassion, through which processes of social and personal healing set in.
By contrast, the defining feature of Gujarat after the 2002 massacre is its frozen compassion. It is the determined absence of remorse both by the State and among many segments of the people, the conspicuous absence of social and political processes of reconciliation, and a resultant persisting bitterly unreconciled divide and distrust between the estranged communities. It is not surprising, therefore, more than seven years later, that what is most scarce in the parched earth of allegedly vibrant Gujarat is reconciliation and empathy.
Excerpted from Fear and Forgiveness: The Aftermath of Massacre (Penguin)
Harsh Mander is Convenor, Aman Biradari. The views expressed by the author are personal.
A feature story I wrote in FC a couple of days back - www.mydigitalfc.com/opinion/manage-your-money-personal-finance-apps-378
Personal finance Apps for Indian investors - far and few
Money management or personal finance management is not just about
investing. There are other critical elements involved as well. It includes
the management of your money outflows through spending. It also covers the inculcation of a habit of monitoring of your total financial networth on a
If not monthly, you should monitor you financial networth on a quarterly or
yearly basis at the least. This should be a comprehensive monitoring
encompassing two main elements – one, a categorywise break-down into
investments, cash-on-hand, bank savings and deposit account positions; and two, an asset-class distribution of your savings and investments.
There is no dearth of web portals and mobile phone apps offering you
advanced features to help you invest across asset classes such as equities,
debt and gold and platforms such as stock exchange trading and mutual funds. These portals and apps not only give you the ability but also spare no
effort in providing every bell and whistle in their offerings.
No after-sales service for investors
But there is a short supply of advanced portals and apps offering
post-investment money management or advisory tools. A vast majority of
brokerages, including the large ones who are otherwise technologically
advanced, do not help much in this vital sphere, and neither do the large
banks. Their current features in post-investment personal wealth management apps are very raw, and do not go beyond the raw basics.
But in the last one year a beginning has been made ith a handful of firms
(brokerages, firms and information technology startups) beginning to offer
mobile apps and web-based apps which allow users who download them to keep
an eye on a large gamut of their personal finance lives.
According to Rahul Jain, executive vice president-personal wealth advisory
at Edelweiss Broking, "A lot of our personal wealth advisory clients were
coming back to us and telling us that while they were getting a lot of
advise on where to invest no one was telling how their investments were
doing and no one was providing them advise on risks seen from an entire
personal finance perspective." Jain said he and his firm realised that they
had to couple their existing advisory tools with with an expense-management
tool or a money manager application to make their advisory service more powerful.
Concurs Amar Choudhary, CEO and co-founder, Finaskus, a firm providing
automated financial planning and investing service for retail services.
"Investors are increasingly seeking awareness of not just the returns they are getting from their investment and but also how their investments are doing in different cuts," says Choudhary.
What the Apps do?
Financial Chronicle Research Bureau takes a look at the features being offered by a few of the new breed of technology-savvy firms which have taken the lead in post-investment and personal finance management arean. So
far, these money manager Apps are smartphone based applications available for download for phones running on Android, Apple and Windows platforms. Web-based apps or portals are still not easy to find.
Walnut and Money View are two personal finance management mobile Apps which were launched last year with basic features which have got upgraded with some new features over the last one year. A couple of months back Edelweiss Broking went live with a free money manager App called WealthPack which works like an automatic money manager.
These are Apps developed by Indian companies incorporating the terminology and language used in the communication sent by financial or other companies in the domestic financial ecosystem. There are far more similar Apps globally targeting users of other countries. It is, therefore, important to
differentiate between domestic and international Apps.
Moreover, so far, these Apps are free. It is possible that they will become
chargeable in the future and to download them you may have to pay anywhere
upto Rs 300 or more, depending on the scale of the features offered and the
The first and the foremost thing all these Apps do is scan through the text
messages (SMS) on your smartphone. The Apps' software then identifies the
SMSes which have come from your bank, brokerage firm, utility company,
credit card issuer, digital wallets (such as Paytm, MobiKwik), radio taxi
companies (such as Meru, Easy Cabs and Uber) and similar other entities.
After this, the features depends on the Apps' own programming strengths
kick based on the algorithms built into the software code of the App. The
Money View App, for instance, says it tracks your bank SMSes and tells you
where and how you spend your money. "With the daily expense manager, you
can analyse your spends using graphs and charts," it says.
The Edelweiss App has algorithms written to cover 50-odd banks and credit
cards. Apart from these, it covers billers such as Airtel, Vodafone, MTNL,
Credit Card Billers, MTS and others.
The Money View App says it also keeps track of your taxi, movie and train bookings, which the other two Apps would also end up doing as a part of their total offering.
According to Edelweiss' Jain, his firm's App aims to integrate their investments with expenses, and work out an advisory around it. "The spending pattern among many young people is that if they make, say, Rs 1.00
lakh they spend Rs 1.10 lakh," says Jain.
Picking up from the text messages in your smartphone, the basic framework
in these Apps allows you to see an overview of your expenses, investment,
inflows and account balances. Depending on each App's algorithms, the transactions are categorised automatically. That which can not be categorised are simply called 'uncategorised' which you can then edit and specify the category you want the transaction to go into.
"In our App, you can manually add your cash spends as well. You can even
change the categorisations if you think the App's algo has wrongly categorised it," says Jain.
The analytics abilities of any App can vary and watch out for these because
this is what caters to your primary purpose of understanding your personal
finances by going beyond a simple investments overview.
What you should demand from a money manager App?
A simple feature such as historical month-end values of bank accounts, and
monthly inflows and outflows is of great value for you if you want to
understand where your money is coming from and where it is going.
It is imperative that the App you choose should offer you charts or tables
which show a historical trend of your expenses, inflows and ATM
withdrawals. Some of the Apps available today are already offering
monthwise charts for a period extending upto six months. But a longer
period analytics is preferable and keep a lookout for an App that digs
deeper into the past and shows you the trend visually in charts.
Ability to export statements is also a must for any useful App. "We are
also going to soon add budgeting and goals in our App. You can tell the App
that you would not like to spend more than Rs 20,000 a month on restaurant
bills or you tell it that you a budget of Rs 1 lakh in a month," says Jain.
The App will send you alerts when your limits come close to being breached.
There are, however, severe limitations in what the Apps dependant on your
smartphone's text messages can do. It can not integrate your investment
holdings in your demat account for the simple reason that a vast majority
of depository participants do not send SMSes on the holdings value at the
end of a month or even a quarter. All you have is the trading portal from
where you can get this by logging in. There is no automatic seamless
integration so far.
Finaskus' Choudhary takes the expectation further and says, "It is nice for an investor to see how he has created total wealth over the last few months or years. But how about breaking down the trend by asset class?" Even within an asset class, it helps an investor to know how his direct equity investments are faring and how his mutual fund investments are faring
Analytics algorithms will be the new game changer for investors in their
personal finance management. Companies and banks in the domestic financial system are already spending significantly on analytics but with the sole objective for using it for marketing and pushing financial products.
Customer service for investors gets imparted secondary importance. But new tech startups which have made a lead through the money manager Apps such as Money View and Walnut are likely to expand their features and try and capture the missing elements.
In the payments world, the changes are more rapid. The banking regulator,
Reserve Bank of India, recently upgraded the payments ecosystem by going live with its unified payments interface (UPI) App which makes your
smartphone do things on funds transfer and other payments, which existing
digital wallet providers like Paytm are already offering in various forms.
Towards the end of last year, the Citi banking group convened developers
from India around the globe to unveil innovative digital banking solutions.
As per a press release issued by Citi in November last year, in India it
received a record high number of registrations for solutions ranging acrossbevery area of banking and financial technology including mobile payments, investment banking, wealth management, financial inclusion, savings and personal financial management.
August 27, 2016
A story I wrote in FC over a week back:
Last couple months saw smallcap stocks underperform largecaps
Small cap stocks, which were outperforming mid cap and large cap
stocks till a couple of months back, have started losing price
momentum, and have been underperforming in the last few weeks.
A Financial Chronicle Research Bureau analysis of the benchmark
indices revealed the benchmark small cap index, Nifty Free Float
Smallcap 100 to have fallen by 1.3 per cent, month to date, whereas
the Nifty Free Float Midcap 100 has gone up 1.4 per cent and the large
cap Nifty 100 index has stayed flat with a marginal 0.1 per cent
Going a little further, from the end of June till Wednesday, a similar
underperformance by the small cap index is detected. It has delivered
a 3.3 per cent return against the 8.4 per cent and 5.1 per cent
returns presented by the mid cap index and the large cap index.
After taking a severe beating in the first quarter of the current
calendar year, the small cap index had bounced back in the second
calendar quarter with vigour.
From the end of March to the end of June, the benchmark small cap
index supplied investors with a very high rate of return of 19.0 per
cent, as compared to the single-digit returns of 8.3 per cent and 7.5
per cent given by the benchmark mid cap and large cap indices
This had a ripple effect on the performance of mutual fund schemes
investing in small cap stocks. In a research note early this month,
Crisil Research said, "Small and mid-cap funds were the toast of
investors among equity mutual funds in the quarter ended June. The
category, as represented by Crisil-Amfi Small & Midcap Fund
Performance index, gained over 11 per cent for the quarter and was a
consistent performer over most periods analysed."
But the superlative performance of small cap stocks had come after a
grilling first calendar quarter during which the small cap index dived
by 13.6 per cent. The mid cap index, in that period, went down by 4.8
per cent while the large cap index was down just 3.2 per cent.
The profit growth in financial year 2015-16 (FY16) was the sharpest in
the listed universe in small cap companies and the price surge in the
June quarter was primarily a reaction to that.
With valuations reaching their peaks, some analysts said a correction
was expected. The last few weeks' underperformance is, therefore,
reflecting the sobering down of expecations from small cap stocks.
Month to date, 61 companies in the Nifty Smallcap 100 index have given
negative returns, and 39 companies have managed to be in the positive
The worst month to date returns in small cap stocks of Nifty Smallcap
100 index were seen in Unitech (-25.2 per cent), Jaiprakash Power
Ventures (-18.3 per cent), Jaypee Infratech (-14.8 per cent),
Balrampur Chini Mills (-13.5 per cent) and Bajaj Hindusthan Sugar
(-13.1 per cent).
Bucking the trend and gaining the most in the smallcap index universe
were Delta Corp with a month to date return of 25.4 per cent, followed
by JK Tyre and Industries (20.0 per cent), Escorts (18.9 per cent) and
S H Kelkar & Company (18.1 per cent).
August 13, 2016
July 26, 2016
Maintenance work in Q1 for IbHF
Profit growth rates were sustained but net profit margin took a hit
Average operating profit growth rate of previous four quarters was
sustained by Indiabulls Housing Finance, one of the largest three housing
finance companies in the country, in the first quarter of current
financial year 2016-17 (Q1 of FY17).
IbHF announced its consolidated financials for Q1 on Monday which, as per
Capitaline database, showed a 35.0 per cent year-on-year (YoY) rise in its
operating profit to Rs 1,028 crore. The Q1 growth rate was a little higher
than the average growth rate of 32.0 per cent in the preceding four
But in absolute value terms the operating profit came off the all-time high
operating profit level of Rs 1,112 crore recorded in the preceding quarter
of Q4 of FY16.
The housing finance company said in a earnings update statement that it had
sold loans worth Rs 1,114 crore in Q1 of FY17, more than double that of Rs
522 crore in the same quarter of previous year. Its loan book stood at Rs
82,070 crore at the end of June, compared to Rs 59,960 crore a year prior
The incremental disbursals in Q1 of FY17 was driven by non-corporate and
mostly-retail housing loans which contributed 77 per cent, 100 basis points
more than the year-ago quarter's share.
Corporate mortgage loans share also went up by 100 basis points to 23 per
cent, while the share of commercial vehicle loans went from 2.0 per cent
last to almost nil. IbHF noted that the housing loan disbursal in Q1 was at
an average ticket size of Rs 25 lakh with an average loan-to-value ratio of
71 per cent at origination.
The consolidated net profit of IbHF in Q1 increased by 23.2 per cent, YoY,
to Rs 630 crore, which was the third highest rate of growth in the last 10
quarter. It also equalled the 23.3 per cent average growth rate in the
immediately-preceding four quarters of FY16.
The profit margin, however, took a bit of hit in Q1. Capitaline data placed
IbHF's profit after tax margin (PATM) at 28.1 per cent, which was the worst
PATM in the last 10 quarters. It was lower than the average PATM of 30.0
per cent in the preceding four quarters of FY16.
In Q1 of FY17, the housing finance company earned a yield of 12.43 per cent
while its cost of funds was 9.25 per cent. The loan book growth of IbHF was
at a spread of 3.18 per cent in Q1, the same rate as in the previous two
quarters of Q4 and Q3 of FY16.
The gross non performing assets (NPA), as a percentage of total loan
assets, of IbHF stayed flattish at 0.84 per cent at the end of June this
year, compared to 0.85 per cent at the end of June last year. The net NPA
too remained unchanged at 0.36 per cent.
July 25, 2016
#ThisDayThatYear 25July2013 Story analysing stock exchanges' own financials
July 24, 2016
IndexFunds vs indexETFs-former better for plainvanilla indices, latter for smartbeta indices
July 23, 2016
GS Junior BeES
WHAT IS IT
GS Junior BeES (GSJB) is a 13-year old index ETF tracking Nifty Next 50 (earlier called Junior Nifty) index.
Capital appreciation is what GSC500F aims for through corpus
deployment in the 50 companies of Nifty Next 50 index in the same proportion as they officially weigh in the index.
Any index fund or index ETF is best-suited for all those equity exposure-seeking investors who do not have the time or the wherewithal to analyse the fundamentals of various listed stocks and who prefer not to go by the recommendations from their stockbrokers or other sources.
Since it is an ETF, you can buy and sell only through your stock broker on the NSE
WHAT TO WATCH OUT FOR
Nifty Next 50 index, which GSJB is committed to mimic, has the second lot of largest 50 large cap stocks after the 50 companies of Nifty 50. There are several ETFs on Nifty 50. There are also a few on Nifty 100 index which is made up of stocks of both--Nifty 50 and Nifty Next 50.
Should you simply invest in Nifty 100 ETF to get a large-cap equity exposure, or should you invest in one ETF each on Nifty 50 and Nifty Next 50?
For one, portfolio concentration (and therefore the returns) would vry in all the three cases. As of May 31, Nifty 100 had top 10-weighted stocks making up for 46 per cent of the total, while the corresponding top 10 weighted stocks concentration of Nifty 50 and Nifty Next 50 were 54 per cent and 34 per cent respectively. The 1-year return, as of Friday, was 0.7 per cent in Nifty 50, 4.4 per cent in Nifty Next 50 and 1.1 percent in Nifty 100.
It is better to taken an exposure to top 100 large-cap stocks by investing separately in ETFs on Nifty 50 and Nifty Next 50, instead of in Nifty 100 ETF.
Performance-wise, tracking efficiency is what matters to an index investor. The returns by an index fund or ETF should mimic the index as closely as possible.
The only comparable fund to GSJB is ICICI Prudential MF's Nifty Next 50 Index Fund. The latter is an index fund which can be bought and sold directly with the AMC like any regular MF scheme.
As of March 31, the Nifty Next 50 Total Returns Index delivered a 1-year return of -2.2 per cent, as GSJB's latest factsheet. GSJB's 1-year return was -3.1 per cent while ICICI Pru's index fund's 1-year return was -3.2 per cent. With returns being almost same, choose whether you prefer an ETF or an index fund.
July 22-23, 2016
The revision in the terms for the merger of Cairn India with Vedanta,
announced by the two companies on Friday, will have a marginal effect
on the shareholders of Cairn India.
On Friday, the boards of the two companies and their UK-based parent
Vedanta Plc approved the new terms under which a Cairn India public
shareholder will get one equity share of Vedanta for each equity share
held, and received four redeemable preference shares in Vedanta.
The change from June last year, when the merger deal was announced, is
only in the preference shares number. Last year's term had the Cairn
shareholder receiving just one preference share in Vedanta for every
share held. Now, a shareholder will get four preference shares.
Additionally, the preference shares will get redeemed after 18 months
and carry a dividend rate of 7.5 per cent per annum till then.
The merger, which as per the June 2015 announcement was expected to
be completed by March this year, got delayed, and as per Friday's
announcement it is now estimated to be completed by March next year.
What emerged from a conference call the Vedanta and Cairn India
management had with analysts on Friday evening was that the companies
had over the last one year engaged with their respective minority
shareholders. Reports had suggested that the terms of the deal were
found to be un-attractive by some minority shareholders.
The oil price recovery in recent months was also a consideration
behind the revision, the two companies said in the conference call.
The companies have yet to get minority shareholder approvals and as
per the merger terms, they have to get a majority vote from the
minority shareholders of all the three companies which are parties to
the deal. In Friday's announcement the companies announced the
shareholder meeting dates to be September 8 for Vedanta and September
12 for Cairn India. Post shareholder approvals, the merger deal will
require approvals of high court, foreign investment board and the
petroleum ministry in the government.
Vedanta said that the new terms implied a premium of 20 per cent to
one month average price of Cairn India. At end of June last year,
Cairn India shares traded at Rs 182 while Vedanta traded at Rs 174.
The share price fell in both the companies and at the end of February
this year, Cairn was quoting at Rs 118 while Vedanta was quoting at Rs
71. By end of last month, the two stocks had recovered to levels of
Rs 141 and Rs 132 respectively. On Friday, Cairn closed at Rs 191.90
while Vedanta closed at Rs 169.30.
The share price trajectory seemed to indicate that the drastic fall in
Vedanta's share price in the one year period from average of Rs 185 in
May-June of last year to an average of Rs 120 in May-June this year,
was a consideration in increasing the number of preference shares from
one to four. In value terms, it adds Rs 30 per share to a Cairn
shareholder as the preference shares will have a face value of Rs 10.
The companies did not expect the ongoing tax-related arbitration cases
pertaining to Cairn India to affect the Cairn-Vedanta merger.