Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Wednesday 28 August 2013

Very Short Term Debt Funds

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

 

It will give the flexibility to roll over quickly. Be underweight on rate- sensitive stocks


The latest macro- economic numbers confirm the economy trundles along in alow growth trajectory, while inflation climbs. The Index of Industrial Production (IIP) was revised down to minus 2.8 per cent year- on- year ( YoY) for May (from the provisional minus 1.6 per cent) and it was provisionally at minus 2.2 per cent for June. This confirms private sector data such as lower automobile sales figures.

The Consumer Price Index (CPI) showed marginal contraction at 9.64 per cent for July, versus 9.87 per cent for June. Food inflation ( which contributes 48 per cent by weight to CPI) is down a little, at 11 per cent. Housing is at 10.6 per cent and transport is up by 7.5 per cent.

The Wholesale Price Index (WPI) jumped to 5.79 per cent in July versus 4.86 per cent in June. Rupee depreciation pushed up transport and energy costs. Fuel was up 11 per cent, while primary articles ( such as commodities) have gone up nine per cent.

In the circumstances, the Reserve Bank of India has an impossible task. It can focus on rupee depreciation and inflation, or growth. But it cannot focus on both. Debt returns have been negative for three years. RBI eased rates for a considerable period. That did not trigger an economic revival.

If interest rates are now raised, this would give positive returns to households, which contribute the largest share of national savings. Higher interest rates could induce households to quit buying gold and move back into financial instruments. That will reduce the current account deficit (CAD), both by reducing gold imports and also because higher domestic savings will mean less foreign investment is required.

Higher rates will also help defend the rupee. Indeed, the rupee defence has automatically led to a rise in short- term rates and bond yields. The latest series, the weekly Cash Management Bills, which have atenure of 34 days, went at 11.94 per cent annualised on launch. Given government paper at these yields, commercial rates will surely rise.

Reviving growth involves tackling structural issues outside RBI's ambit. Policy makers have a choice. They can accept lower GDP growth as a function of RBI's anti- inflation measures. If they want higher GDP growth, it will involve implementing non- monetary reform measures.

The Incremental Capital Output Ratio (ICOR) compares marginal units of investment required per extra unit of production.

The lower the ICOR, the better. ICOR is now at over seven, where it was four in 2007- 08. At an ICOR of four, with domestic savings of 30 per cent, GDP growth at 7.5 per cent could come on a zero CAD. At an ICOR of seven, GDP growth would drop to 4.25 per cent with zero CAD.

Lowering ICOR means removing bottlenecks like red tape and corruption, which have stifled business. There is roughly 5,00,000 crore stuck in stalled projects across multiple sectors and that has pushed ICOR up.

Investors have also become wary and those who can have pulled out, like Posco and the Mittals. Thus far, the policy reaction has been hot air and promises with little movement on the ground. The last two years have seen increasing tension between RBI and the political establishment because RBI refused to open the tap wider, although it did cut rates. Its clear that monetary easing will not solve Indias problems.

Its up to the political establishment to remove the other bottlenecks retarding growth.

If the incoming RBI chief, Raghuram Rajan, lives up to the principles he has often stated, he will continue to focus on inflation and the rupee as the central bank's brief. Domestic interest rates are very likely to rise if RBI has its way. That makes rate- sensitive sectors more vulnerable. Investors should be looking at very short- term debt, which can be rolled over quickly. They should also seek to be underweight in rate- sensitive sectors. Higher rates will translate into lower stock prices unless, the foreign institutional investors return in force. Be prepared for that.

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 )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

No comments:

Post a Comment

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Popular Posts

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications