RBI's Credit Policy - October 2009

The Reserve Bank of India (RBI) in its October 2009 credit policy has signalled a first phase of exit from the accommodative policy of the recent past, by taking the following measures:

• Statutory Liquidity Ratio (SLR) has been increased from 24% to 25% - This will reduce the liquidity in the monetary system

• Cash Reserve Ratio (CRR) has been left unchanged at 5%

• The repo rate is unchanged at 4.75%

• The reverse repo is unchanged at 3.25%

• Bank rate has been left unchanged at 6%

• GDP growth estimates for the fiscal year 2009-10 is down to 6%. This is after factoring in a decline in the food grain production and a sustained increase in the industrial production

With worries of inflation reaching 6.5% by March 2010, the Central Bank has hinted at a rate hike in CRR towards the end of December 2009 or early January 2010. Interest rates are also expected to increase in Q1 of 2010.

We opine that in the current scenario investors should not invest in debt funds as the interest rates in the economy are expected to move up. This is mainly because interest rates and bond prices are inversely correlated to each other. In such a situation, one can invest in Fixed Deposit (FDs) once the interest rates firm up.

LATEST DIVIDEND LIST

LATEST DIVIDEND LIST
S.No	AMC	Scheme Name	Rate of Dividend	Record Date
1	RELIANCE	GROWTH	50%	October 30, 2009
2	UTI	MASTER SHARE	27%	October 30, 2009
3	ICICI	INFRASTRUCTURE	10%	October 30, 2009

Investment Ideas: Franklin Templeton Fixed Tenure Fund - XII - Plan B

Investment Ideas  Franklin Templeton Fixed Tenure Fund - XII - Plan B : The Indian economy has been resilient through the recent global slowdown and the recent recovery across the world, should provide a further boost to growth... In fixed income markets, rates on various securities have started to move up and are expected to have an upward bias. In such an environment, a product taking advantage of the rising debt yields as well as the high return potential of equities over the medium-to- long term, is an ideal solution... Read More

Call for FT FTF @ 0-9818-26-9396

Slow and steady wins the race

Systematic Investment Plan (SIP) investors have once again a reason to smile. The slow and steady investing in mutual funds has proved that every small amount invested at regular intervals has given good returns. SIP mode of investing offers twin benefits to the investors:

1. Rupee Cost Averaging: - In the turbulence of the stock market, SIPs have worked exceptionally well. At every lower level, investors have been able to buy more units in a fund with the same amount invested. It thereby helps the investors to arrive at a better average purchase cost

2. Compounding: - Even when the markets are on an upswing, as was witnessed since March ' 09, SIPs have compounded your earnings

Large Cap Funds	1-Yr SIP Returns (%)	2-Yr SIP Returns (%)	3-Yr SIP Returns (%)
DSP BR Top 100	44.60	30.48	36.54
HSBC Equity	34.15	16.96	20.72
Franklin India Bluechip	46.02	29.46	30.31
HDFC Equity	65.50	45.27	45.23
HDFC Top 200	57.97	41.93	46.57
Average	49.65	32.82	35.87

(NAV data as on Oct 21, 2009) (The returns are absolute)
(Source : Crisil Fund Analyser)

 

The above table explains the absolute returns generated by SIPs in the respective time frame. For investment in some large cap funds, SIPs on an average have delivered absolute returns of 49.65%, 32.82% and 35.87% over 1-yr, 2-yr and 3-yr periods.

In our opinion, investors should subscribe to the habit of investing regularly through SIPs, and by doing so, stay away from the futile exercise of timing the entry points.

Canara Robeco Equity Tax Saver-Going strong

Performance of Canara Robeco Tax Saver Scheme for One year horizon.

Fund Name	Launch Date	Category	Rating	Risk Grade	Return Grade	1 Year Return	Expense Ratio
Canara Robeco Equity Tax Saver	1993-03Mar-1993	Equity: Tax Planning	5 Star	Avg.	High	93.73	2.50
Fidelity Tax Advantage	2006-01Jan-2006	Equity: Tax Planning	4 Star	Low	Above Avg.	66.92	2.07
Franklin India Taxshield	1999-04Apr-1999	Equity: Tax Planning	4 Star	Below Avg.	Avg.	58.79	2.18
HDFC Taxsaver	1996-03Mar-1996	Equity: Tax Planning	4 Star	Below Avg.	Above Avg.	69.49	2.06
Magnum Taxgain	1993-03Mar-1993	Equity: Tax Planning	4 Star	Below Avg.	Above Avg.	67.09	2.50
Sahara Tax Gain	1997-03Mar-1997	Equity: Tax Planning	4 Star	Avg.	Above Avg.	81.10	2.50
Sundaram BNP Paribas Taxsaver	1999-11Nov-1999	Equity: Tax Planning	5 Star	Below Avg.	Above Avg.	59.42	2.25
Taurus Tax Shield	1996-03Mar-1996	Equity: Tax Planning	4 Star	High	High	81.40	2.50

Source-www.valueresearchonline.com

Company Fixed Deposits for Assured Returns @ 0-9818269396

Company Fixed Deposits	RATE OF INTEREST ( %) p.a				REMARKS	MINIMUM INVESTMENT
PERIOD	6M	12	24	36
ANSAL HOUSING & CONSTRUCTION LTD	11.00	12.00	12.00	12.50	NO ADD INT	A&C-20000,B-10000
ANSAL PROPERTIES & INFRASTRUCTURE LTD	NA	11.00	11.50	12.00	PAN COPY MANDATORY	25000/-
ALEMBIC LTD	NA	7.00	8.00	9.00	0.25% ADD. IF APPLICATION AMOUNT > FIVE LAKHS	20000/-
APOLO HOSPITAL ENTERPRISES LTD	NA	9.00	9.25	9.50		25000/-
CEAT LTD	NA	8.50	9.00	9.50	NO ADD INT	25000/-
CNBC TV 18 (ONLY RENEWALS AFTER 1 AUG2009)	9.00	12.00	12.00	12.00	0.50% ADD. TO SR. CITIZEN & EMPLOYEES	10000/-
DEEPAK NITRITE LTD	NA	10.05	10.10	10.25	NO
DELHI ASSAM ROADWAYS CORPORATION LTD	10.00	11.00	11.00	11.00	0.50% ADD.TO SHARE HOLDERS, EMPLOYEES, THEIR PARENTS, SPOUSE & CHILDREN	5000/-
FIRST LEASING COMPANY OF INDIA LTD	NA	9.25	NA	NA	NO	5000/-
GODREJ INDUSTRIES LTD	NA	7.50(13M)	8.00	8.50		20000/-
GODREJ PROPERTIES LTD	NA	8.25	9.00	9.75
INDAGE VINTNERS LTD	8.50	10.00	10.50	11.50	NO ADD INT	5000/-
IND SWIFT LTD	10.5	11.50	12.00	12.50	0.50% ADD. TO SR. CITIZEN(55 YR), SHARE HOLDERS (100 SHARES) & EMPLOYEES	10000/-
IND SWIFT LABORATORIES LTD	10.5	11.50	12	12.5	0.50% ADD.TO SHARE HOLDERS, EMPLOYEES, THEIR PARENTS, SPOUSE & CHILDREN	10000/-
J K LAXMI CEMENT LTD	NA	9.50	10.00	10.00	NO	10000/-
JK TYREE AND INDUSTRIES LTD	NA	10.00	10.25	10.25	NO	10000/-
JAGJIT INDUSTRIES LTD	10	10.50	11.00	11.50	NO	25000/-
JAI PRAKASH ASSOCIATES LTD	11	11.00	11.50	12.00	NO	20000/-
JCT LTD	NA	11.00	11.50	12.00	NO	10000/-
JSL LIMITED	NA	9.00	9.50	10.00	0.25% ADD. TO SR. CITIZEN, SHARE HOLDERS (500 Share) & EMPLOYEES,	21000/-
JINDAL STEEL AND POWER LIMITED	NA	8.00	8.25	8.50	NO	10000/-
J.K.PAPEER LTD	NA	9.00	9.50	10.00	NO	10000/-
LYKA LABS LTD	10.00	10.50	11.00	12.00	.50% SRCITIZEN
MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD	NA	8.00	8.50	9.00	0.25% ADD TO SR CITIZEN	10,000/-
MUKAND LTD (ONLY SHAREHOLDERS)	NA	9.50	10.00	11.00		25000/-
PEARL POLYMER LTD	NA	11.00	10.00	10.00	NO	10000/-
RAVALGAON SUGAR FARM LTD	NA	NA	10.50	10.75		10000/-
SHRIRAM PISTON AND RINGS LTD	7.5	10.50	10.75	11.00	NO	21000/-
SHRIRAM TRANSPORT FINANCE LTD FD	NA	8.00	9.00	10.00	NO	21000/-
SOLARIES CHEMTECH LTD	NA	10	11.00	11.5	NO	20000/-
SURYA ROSHINI LTD	NA	10.50	11.00	11.50	NO	25000
TATA MOTORS LTD	NA	NA	8.00	8.75	0.25% ADD. TO SR. CITIZEN, SHARE HOLDERS (1 Share) & EMPLOYEES,	20000/-
TALBROS AUTOMOTIVE COMPONENTS LTD	NA	11.00	11.50	12.00	MINIMUM AMOUNT 10,000/-
UNITECH LTD	11	11.00	11.50	12.00	.50% SRCITIZEN	10000/-
NBFC (COMPANY NAME)	RATE OF INTEREST ( %) p.a
PERIOD	12M	24M	36M	84M
PNB HOUSING FINANCE LTD (HALF YRLY)	8.00	8.00	7.75	7.75	PAN CARD MUST, 0.50% EXTRA FOR SEN CITIZEN	FIXED 20000/- CUMULATIVE 10,000/-
GRUH FINANCE LTD	7.00	7.25	7.50	7.75(60-84 M)	0.25% EXTRA FOR SENIOR CITIZEN, & TRUSTS
CANFIN HOMES LTD	7.50	7.75	7.75	7.75	0.50% ADD TO SENIOR CITIZEN
DEWAN HOUSING FINANCE CORPORATION LTD	10.05	10.10	10.25	10.00	0.25% EXTRA FOR SENIOR CITIZEN,WIDOW, ARMED PERSONNEL, EXISTING DHFL HOME BORROWERS &  DHFL SHARE HOLDERS	10,000/-
PERIOD	12M	24M	36M	48M
ICICI HOME FINANCE DEPOSIT      < 1 CR.	7.00	7.50	7.75	8.25(60-84M)	0.25% ADD TO SENIOR CITIZEN	10000/-
SHRIRAM TRANSPORT FINANCE CO LTD (NCD)	8.00	9.00	10.00	10.00
EXIM BANK	7.25	7.25	8.25	8.25(60M)	0.50% ADD TO SENIOR CITIZEN	10000/-
LIC HOUSING FINANCE LTD	6.75	7.25	7.50	8.00 (60M)	0.25% ADD TO SR CITIZEN IF APP > RS.51000/- & 0.10% IF APP < RS. 50000	10000/-
NATIONAL HOUSING BANK (SUNIDHI)	7.25	7.25	8.00	8.00 (60M)	0.50% ADD TO SENIOR CITIZEN	50000/-
NATIONAL HOUSING BANK (TAX SAVING)	NA	NA	NA	8.00 (60M)	0.50% ADD TO SENIOR CITIZEN	10000/-
SIDBI	6.75	7.25	7.25	7.75(48-60M)	0.50% ADD TO SENIOR CITIZEN	10000/-
HUDCO (8Th Octo)	7.00	7.50	7.65	7.75	0.25% ADD TO SENIOR CITIZEN
HDFC  (IND ) - REGULAR <1 CR	6.90	7.40	7.65	8.25(60-84 M)	0.25% ADD. TO SENIOR CITIZEN	10,000/-
PERIOD	15 M	20M	30M	45M
HDFC PREMIUM DEPOSIT <1 CR	7.00	NA	7.75	7.75
PERIOD	20 M	30M	40M	60M
ICICI HOME FINANCE  (SPECIAL) <1 CR	NA	7.80	8.00	8.25	0.35% ADD TO SENIOR CITIZEN	5000/-