April 15, 2010

life in general: hindi film music & sukhwinder singh

I hardly ever watch any new Hindi movies. However, the one good thing about Hindi, and Indian, film industry is the music and songs, although the picturisation of the songs are often dumb and many a time obscene. Anyway, I have always enjoyed good music, good musicians and good singers churned out by the Indian film industry. 

The one singer-cum-musician that has pulled my heart strings in recent time has been Sukhwinder Singh. The song that touched me deeply was his heart-rending singing of 'Shabd Gurbani' in the movie Halla Bol (among the occasional movie I watched 2 years ago on my computer notebook). Now, I am not moved by religious stuff and this song is based on Sikhism's scriptures. But the soft song absolutely moved me. 

Sukhwinder Singh was also the music director of Halla Bol. Click here to listed to his lovely rendition of an elegant Gurbani. The lyrics of this song was written by Dushyant Kumar and Sameer. Another beautiful song from the movie is Barsan Lagi sung by Sneha Pant and whose lyrics are written by Sameer and Dushyant Kumar. Listen and let the music touch you deeply.

April 11, 2010

life in general: oh deer! get liberated.


I came across this simple and mild, yet quite inspirational, humour piece on the internet today. Read it below.

Dandy the Deer
...didn't live in a cold land or even in a Park, but in a book on page 99...

There was once a little deer, whose name was Dandy Jim. He didn't live in a cold land or even in a Royal Park, but in a book on page 99. It was a most attractive book, and was called All About Animals, and it was given to a little girl, whose name was Sarah.
Quite often Sarah used to leave the book open, and then Dandy Jim could look out at the real green trees from the window-sill, but when she didn't look at the book for days and days, he was just squashed up with two hundred other pages, and that wasn't very nice.
Then one morning, much to his delight, he clearly heard Sarah say: "Shall I take a book to look at on the picnic, Mummy?"    "All right, dear," replied her Mummy, "but no more than one or two."
Dandy Jim just hoped with all his might that one of the books would be his-and it was! Dandy Jim was just able to peep through the pages, and much to his great joy he saw that he was in a deer park. For the very first time, he was looking at real deer.
As the books dropped to the ground, Dandy Jim cried with delight as page 99 fell open, and there above him was the clear blue sky and the green leaves of the big oak. Standing by a little stream nearby, Dandy Jim saw a young deer. Dandy was so excited that he jumped out of the book to take a closer look.
When Dandy Jim stood beside his new friend, they rubbed their noses together as much as to say "How do you do." Then off they went together, through the avenue of trees, to play with the other deer. They had such a lovely time, but which was Dandy Jim, no one ever knew, because he looked the same and stayed with them for ever.

April 09, 2010

life in general: it continues fast & dangerously: global climate-changing extreme weather

Whether impact of human beings' activities are predominantly responsible or not, the fact that extreme weather worldwide has become the norm in the last few years is undeniable. My city, Bombay (in India), got a bitter taste of it in July 2005 when it rained extremely intensely and caused major devastation including loss of many lives.

About 3 days back, Brazil's Rio de Janeiro has similarly received an unprecedented amount of rainfall causing major damage to properties and lives. Around the same time, Kenya saw extreme flooding.

A month back, Venezuela faced severe drought due to unusually missing rains. Around that time, China witnessed severe sandstorms in Beijing and other parts of the country.

The list, unfortunately, goes on and on.

I pray that the human children of Mother Earth are able to collectively moderate their consumption of planet-damaging goods & services. Economists and policy makers, worldwide, should awaken themselves to the excesses caused due to their obsession with growth of GDP numbers etc.

Anyway, here are some newsreports on the recent severe climatic conditions I talked about above:

Floods displace 10,000 in Kenya By Sarah Wambui
NAIROBI, Kenya, April 3
The Kenya Red Cross Society now says over 10,000 people have been displaced and marooned by floods after heavy rains pounded parts of Tana River district in the Coast province.
The society’s spokesman Titus Mung’ou said majority of the people were yet to be moved to safer grounds as the roads and bridges in the area had been swept away making movement difficult.
Mr Mung’ou who said the situation had become worse after the River Tana burst its banks but added that the humanitarian organisation would provide temporary shelter, tarpaulins, medical assistance, food aid and other forms of aid to the displaced.  “There is indication that there are more than 13,000 people who require urgent relief because they cannot access any areas where there is food. So far, this is the situation that the team has reported but they are still conducting assessments on the ground and we are yet to get the exact numbers,” he said.
....Mr Mung’ou further added that the floods which started at the beginning of the year in various parts of the country have claimed more than 70 lives. “In January to February about 42 lives were claimed; March had the highest number with about 31 and there are still those that were not accounted for. But there are about 15,000 displaced or needing some kind of relief assistance,” he said. He also added that things could get worse if the rains continued with similar vigour....

Venezuela faces hydroelectric woes    Published: March. 22, 2010 at 11:24 AM
ARACAS, Venezuela, March 22 (UPI) -- The level of water behind the Guri hydroelectric dam in Venezuela is declining as the government struggles with energy issues, officials said. Venezuelan President Hugo Chavez decclared an energy emergency in February as pervasive drought caused problems for his country, which relies heavily on hydroelectric power.
Argenis Carvajal, an operations manager at the Guri dam, said the water level fell nearly 6 inches despite government efforts to control consumption, Venezuela's El Universal newspaper reports. "Should we have not taken any measures, we would be undoubtedly (5 feet) below the present dam level and would be declining 7-8 inches on average," Carvajal said. A plan to cut energy consumption by 20 percent in Caracas was enacted Feb. 11, though the National Electric Corp. said only 37 percent of heavy energy consumers in Caracas were meeting that goal. Without restrictions, Carvajal said, the energy crisis would be more serve. "This means that we would have to withdraw from the domestic electricity grid approximately 5,000 megawatts, that is, 2 1/2 cities like Caracas without power supply," said the manager.
Demand for conventional energy resources has surged as regional drought decreases productivity from the country's hydroelectric plants.
© 2010 United Press International, Inc. All Rights Reserved.


Sand storm hits central Beijing
A sand storm hits central Beijing on March 22, 2010.Tons of sands carried by winds of up to 90 km.h, has affected more than 270 million people in 16 provinces since Friday, state media reported. UPI/Stephen Shaver

Rio's worst rains in history kill at least 95   By BRADLEY BROOKS, Associated Press Writers Bradley Brooks, Associated Press Writers – Tue Apr 6, 6:39 pm ET
The heaviest rains in Rio de Janeiro's history triggered landslides Tuesday that killed at least 95 people as rising water turned roads into rivers and paralyzed Brazil's second-largest city. The ground gave way in steep hillside slums, cutting red-brown paths of destruction through shantytowns. Concrete and wooden homes were crushed and hurtled downhill, only to bury other structures.
The future host city of the Olympics and football World Cup ground to a near halt as Mayor Eduardo Paes urged workers to stay home and closed all schools. Most businesses were shuttered. Eleven inches (29 centimeters) of frain fell in less than 24 hours, and more rain was expected. Officials said potential mudslides threatened at least 10,000 homes in the city of 6 million people.
Paes urged people in endangered areas to take refuge with family or friends and he said no one should venture out. "It is not advisable for people to leave their homes," said Paes. "We want to preserve lives." He told the Web site of the newspaper O Globo that the rainfall was the most that Rio had ever recorded in such a short period. The previous high was nine inches (24 centimeters) that fell on Jan. 2, 1966.
President Luiz Inacio Lula da Silva urged Brazilians to pray for the rain to stop.
"This is the greatest flooding in the history of Rio de Janeiro, the biggest amount of rain in a single day," Silva told reporters in Rio. "And when the man upstairs is nervous and makes it rain, we can only ask him to stop the rain in Rio de Janeiro so we can go on with life in the city."
A representative for the Rio de Janeiro fire department, which was coordinating rescue efforts, said 95 people were known dead and 44 more had been hospitalized. Most of the victims were from Rio's hillside shantytowns whose homes were buried under tons of mud and rubble. "We expect the death toll to rise," said the official, who declined to be identified because he was not authorized to speak to the media.
Thousands of motorists were stranded overnight on highways blocked by rising water..........
Associated Press Writer Marco Sibaja in Brasilia, Brazil, contributed to this report.

The pics below are taken from here.




April 07, 2010

life in general&financial markets: extremism on both sides -- maoists & government

The tragedy that struck the families of the 74 Centre Reserve Police Force (CRPF) men who were killed in a attack by Maoists is distressing. These CRPF men, coming from non-affluent backgrounds and in their jobs primarily for a little bit of financial security, are the victims of not just the Maoist extremists who deserve no empathy for their indiscriminate violent methods but also of the machinations, apathy and inefficiencies of the powers-that-be in the central government of India as well as several state governments in the country.

P. Chidambaram, the Home Minister, was earlier the Finance Minister. There have been several cases of companies, bureaucrats and politicians colluding to brutally oust the remote people of India living in tribal and forest areas where the companies want to set up their mining and other industrial projects on the back of huge governement subsidies (that you and me as India's taxpayers ultimately bear).

There was a genuine resistance from the people and this got support from some concerned citizen groups all over the country. Hiding behind this genuine resistance, the Maoists took to violence against government forces and agents in those areas. The companies started complaining to the Finance Minister (Chidambaram then) and the Prime Minister of India, Manmohan Singh. They (along with Montek Singh Ahluwalia, Kamal Nath and other members of the coterie that turns a blind eye to the extreme violations taking place of human rights and environmental laws in those remote regions of India) must have decided on a strategy.

The first step was to transfer Chidambaram from the Finance Ministry to the Home Ministry as the latter is in charge of internal security matters of the country. Chidambaram would get the companies to provide him with details of which areas they want to set up their projects in (whether or not they are in genuine compliance of ecology laws and human rights clauses of Indian laws) and then use the paramilitary force (such as CRPF) to suppress the genuine resistance of the affected people using the Maoist violence as a convenient excuse.

So it has been a war by the Indian government, supposedly against Maoists, in the last few months. Maoists receive their arms from international arms suppliers (mostly private extremist organisations but sometimes quasi-government arms manufacturing companies). That the Maoist violence should be put a halt to is a given but at least it can be done without endangering the lives of poor paramilitary force troops on whom the government and Chidambaram does not wish to spend adequately on their salaries and training. Read the full text of the news story (that I am giving below) about how stupid it was for CRPF men to be blindly asked to enter a forest at dawn and how they were sitting ducks.

Simultaneously, the government of India should do away with its nefarious intentions behind the reckless and blind approvals it is granting to companies in the remote areas of India for mining and other projects. 

The newsreport:


Operation Green Hunt is flawed: Experts
New Delhi: The gruesome killing of 75 security personnel by Maoists in the jungles of Dantewada in Chhattisgarh brought the faultlines of Operation Green Hunt, the massive mobilisation of forces against Naxals, into the open.

Leading security experts like former Punjab Director General of Police KPS Gill and Ajai Sahni of Institute of Conflict Studies questioned the merit of sending policemen to battle the Maoists without any intelligence or preparation.

“What is the objective of these operations? How can they send a company of 120 men into the jungle - roaming, hunting for Naxals without any back-up or support? What were they expected to do? These men were sitting ducks. They are not IIT graduates or men of high intelligence,” said Singh.

Singh was adviser to Chhattisgarh Government in 2003-04 for tackling Naxals.

According to Singh, there was no point in walking into the Naxal territory and attacking them without precisely assessing their strike capacity.

“You will launch an attack after which they disperse into the jungles and regroup to mount a counter. They did it in Dantedwada, in Lalgarh before that and a number of other places. We must have the intelligence otherwise we will simply lose our uniformed men to such attacks,” Singh said.

Sahni pointed that the political class suffers from the problem of continuously doing things without any planning or strategy.

“When they do not have a strategy they call it an Operation. Do you know the total central forces deployed for the entire anti-Naxal operation is 57 battalions - each battalion will have 400 men,” he said, adding, “That means altogether about 22-23,000 central forces are battling a vast army of Maoists spread across six states against whom they will never be to dominate.

This is what we say outright adventurous.” Sahni said the jawans were being thrown to their death because of lack of any planning by the Government.

April 06, 2010

life in financial markets: ETFs in India

Exchange traded funds (ETFs) are not very popular in the Indian financial marketplace for all the wrong reasons (such as 'fancy for active stock picking based on hot tips or herd mentality investing'). Internationally, they are a big hit but some risks (such as 'low liquidity due to absence of arbitrageurs (that may be on account of very low unit capital of the ETF') are not carefully considered

Anyway, here is something I wrote on ETFs two months ago for the magazine I worked for then:

The promise of ETFs
Very popular internationally, ETFs have not caught the imagination of Indian investors. But they should.

Last year was not a good year for index funds and index exchange traded funds (ETFs) in the domestic mutual fund industry, but only with regard to assets under management (AUM). The combined AUM of 8 ETFs as on 31 December 2009 was Rs 932 crore, just 0.8% of total AUM in non-index equity schemes of Rs 1,96,946 crore. This was an exceptionally low figure as in previous two years, for December-end 2007 and December-end 2008, their proportions were 4.1% (Rs 6,064 crore) and 2.1% (Rs 1,504 crore) respectively.

But, whether vastly popular or not, as it is in many western markets such as US and UK, passive investing has come to stay in India. The lack of high growth in index products is due to reasons such as lack of awareness and perception of deriving more returns from actively-managed equity funds. "But indexing is what someone should definitely be doing," says Gaurav Mashruwala, a leading certified financial planner (CFP). "We advise investors to start with index ETFs."

But differing perceptions hold forth. Says Nilakshi Louzade, a CFP and a partner in financial planning firm, InTrust Advisors, "Index ETF buyers presently comprise of first time investors or very small retail investors but since a large part of our listed companies' growth is coming from companies outside the Nifty or Sensex we do not advise large allocations to index ETFs or funds."

Empirical studies, however, bring out the overall underperformance of actively-managed funds against passive index ETFs. Benchmark Asset Management, the pioneer in ETFs in the domestic fund industry, carried out two such studies in 2009, in May and in December, that confirmed this.

The December 2009 study analysed, for 57 diversified actively-managed equity funds with a 3-year track record as of December 2006, their average rolling 3-year NAV performance (percentage change in the NAV of a given date from the NAV of the same date exactly 3 years ago) from December 2006 to December 2009. This was compared to the corresponding 3-year NAV performance of Benchmark's Nifty ETF.

The 57 active funds, on an average, gave absolute returns that were worse than the Nifty ETF by between 2% and 6% from December 2007 to December 2009. An absolute underperformance of 6% meant that if the ETF was giving a 3-year return of 10% then the 57 funds were giving a return of just 4%, and if the former was a negative 10% then the latter was a negative 16%.

Among index products, index ETFs have got more attractive than index funds. Every time you purchase units of an open-ended index fund the amount gets invested in all the index stocks in the proportion of their weights, but when you buy the NSE-or BSE-traded units of an index ETF the corpus does not change as it an existing ETF unit-holder who is selling the units. In addition to the convenience of holding ETF units in the investor's demat account, this keeps the transactions cost low.

Almost all index ETFs have an annual management expense charge of 0.5% whereas the index funds charge between 0.8% and 1.5% per annum. Index ETFs' tracking error is the lowest. So, for instance, from December 2007 to December 2009, when the spot Nifty delivered a negative return of 12.79%, the Benchmark Nifty ETF gave a negative return of 12.41% and three Nifty Index Funds—of Franklin Templeton India AMC, Unit Trust of India AMC and LIC AMC—gave higher negative returns of 13.49%, 14.10% and 19.56% respectively (see graph).

ETFs hold the promise of providing easy and long-term exposure to different asset classes. Gold ETFs are already a hit in the domestic fund industry (see story on gold in this issue). Benchmark's Liquid ETF offers an easy way to get the same exposure as you would from a liquid fund of any AMC.

The western markets already have ETFs on other asset classes such as currencies and commodities and within equities on sectoral indices such as those tracking clean energy stocks and real estate stocks. Some of these are likely to hit the domestic scene in the coming year or two. For instance, Benchmark AMC has filed offer documents with Sebi in 2008 to launch ETFs on crude oil, silver and government securities and fund of equity ETFs covering the themes of clean energy, private equity and water.

The scope is exciting. Keep the faith and patience.

April 03, 2010

life in financial markets: (part 1) pending reforms

There are many issues in the financial market system that needs improvement. I am starting a series listing these issues one by one.

This first one in the series is on the disclosures that are made "as of xyz date'.

Why 'as on' is average and 'average' is superior!

Detailed and fully audited financial statements of companies in India and most other global markets are disclosed once a year within 1-3 months of the end of the financial year (FY). The FY, for accounting and statutory reporting purposes, in many jurisdictions including India, is from 1 April of a year to 31 March of next year.

Listed companies have to file their stand-alone and consolidated audited financial statements with the stock exchanges once a year. The Balance Sheet and Profit & Loss Account are the two main financial statements in this disclosure process. Unlisted companies, too, have to file these statements within a few months (six months is the limit in India) of the end of every FY.

Listed companies have the additional stock-exchange-listing-agreement requirement of disclosing un-audited or audited revenue and expenditure statement once every quarter. Mutual funds, too, have their statutory disclosures of portfolio holdings and fund/scheme accounts once or twice a year.

Except for the Profit and Loss (or Revenue and Expenditure) statement the statutory disclosures (such as Balance Sheet and Portfolio Holdings) are as of a particular date like 31 March, 30 September, 31 December or other month ends. The Profit and Loss Account is for the whole year -- an aggregate of amount earned, spent or provided for during the entire year.

My contention is that disclosures 'as on' a particular date is not enough for investors, regulators and members of the public. It provides only a snapshot of the financial position or other relevant position as of one single day. And if that snapshot is all you have to go by for months and upto a year then you are losing out heavily in a financial marketplace where fortunes are made or lost in days or weeks and not months or years.

I think regulators, worldwide, should immediately require companies, mutual funds etc to make additional disclosures of their Balance Sheets or Portfolio Holdings in 'average during 'xyz' months' format.

As an investor, I want to have a clear idea of how a company or a fund fared on most days rather than a single day. In this day and age of advanced computing technologies there is no reason why a company or a fund can not have daily or weekly Balance Sheets and Portfolio Holding Statements. They need not disclose these to investors every day, week or month but the least they can do so is give the daily, weekly or monthly averages for a longer duration disclosure (year or 6 months or a quarter). For example, to arrive at an average figure for a year, take 365 daily, 52 end-of-week or 12 month-end data points of 'as on' positions, sum them up and divide by 365, 52 or 12. Similarly, to arrive at an average figure for a quarter, take 92 daily or 13 end-of-week data points, sum them up and then divide it by 92 or 13.

That day will be a very welcome day when a company's annual and quarterly financial statements gives us the average position of Balance Sheet items for the full year. Similarly, we would love to see mutual fund's monthly/quarterly/half-yearly portfolio holdings contain averages of all their holdings during the month/quarter/6months.

In India, the Securities and Exchange Board of India, the Reserve Bank of India and the Government of India's sub-Ministry of Corporate Affairs under the Ministry of Finance ought to move in quickly to mandate these additional 'average during...' disclosures.