Friday, 29 February 2008

Budget growth-oriented but ignores NRIs: Experts

Budget growth-oriented but ignores NRIs: Experts
29 Feb, 2008, 2033 hrs IST, PTI

WASHINGTON: US-based Indian scholars today termed the Union Budget as growth-oriented and "populist" while lamenting the non-inclusion of any benefits for NRIs. "The budget is in line with expectations. With the election year fast approaching, the Finance Minister has proposed a populist budget aimed at using fiscal measures to boost growth and control inflation," said Anirudh Sarathy, analyst for StreetEdge Investments in San Ramon, California.

While describing the budget as a "good" one, Dr Kamala Edwards, President of the Indian-American Leadership Council, said Finance Minister P Chidambaram seems to have missed an opportunity to provide incentives to NRIs like China did. "One thing that is missing is that the Finance Minister should have given some more incentives for NRI investments like China has done for its citizens and this has been a very good feature because that made growth almost permanent for China," Edwards said.

She also warned that the country's "inflated" stock market, which is mostly based on institutional foreign investments, is "almost a recipe for disaster." "If there is so much foreign investment, the moment it is pulled out like we have it happen in South Korea and other East Asian countries, India will be in trouble," she said.

Ashok Mago, Chair of the Dallas based US-India Forum, echoed her sentiment, saying: "There are no provisions to encourage NRI investments." Mago said the budget was aimed to please "everyone particularly farmers and low and middle income constituents. This budget is providing all indications of early election".

Budget ignores NRIs, feel Indian expats in UAE

Budget ignores NRIs, feel Indian expats in UAE
Aroonim Bhuyan, Indo-Asian News Service
Dubai, February 29, 2008
The Union Budget for 2008-09 Finance Minister P Chidambaram presented on Friday is populist ahead of elections but has left overseas Indians out of focus, according to expatriate Indians in the United Arab Emirates (UAE).

"The budget is a populist one as can be expected before elections," Abbas Ali Mirza, president of the Indian Business and Professional Council (IBPC) of Dubai, said on Friday.

The IBPC had organized a post-budget interactive session here, which was attended by top Indian entrepreneurs, businessmen and professionals.

Terming the budget populist, IBPC vice-chairman and Pravasi Bandhu Welfare Trust chairman and managing director K Shamshudheen said the debt waiver for small and marginal farmers was a bad step.

"The Rs 60,000-crore debt waiver to small and marginal farmers is a disaster. The government should have instead aimed at increasing farm productivity. Now agriculture will be all about taking loans," Shamshudheen told IANS.

"Also, NRIs were nowhere in the finance minister's mind when he prepared the budget," he said.

"I think it is high time organizations like IBPC approach the finance ministry at least three months in advance to draw his attention to NRI issues."

Abbas Ali Mirza said: "The debt waiver is meant for small and marginal farmers only and not for everybody. You need to include everybody in the growth process."

Speaking to IANS, Bharatbhai Shah of Al Mustaneer Trading drew attention to the 12.5 percent service tax on air tickets bought outside India.

"We NRIs are not asking for anything. But at least they can give us some facilities. Why should I pay service tax for air tickets I buy here in Dubai for my parents in India? What service am I getting?" Shah asked.

"We have been writing to the Indian government about this for long. They waived it for one year and then now again it is back," he added.

Around 1.4 million expatriate Indians live in the UAE and 5.5 million across the Gulf.

Nikai group of companies chairman Paras Shahdadpuri was of the view this year's budget has not laid enough stress to infrastructure.

"The debt relief to farmers is a welcome step. But India's infrastructure needs to be better. Not enough attention is being given to sea ports and airports," he said.

"While China has drawn $71 billion worth of foreign direct investment, India's share is $12 billion. And the main reason for this is India's underdeveloped infrastructure," he said.

"And of course, NRIs are nowhere in the scheme of things of the finance minister," he added.

Suresh Kumar of the Emirates Bank described the budget as disappointing.

"It is not a bold budget. It is disappointing and short-term oriented," he said.

IBPC governing body member Rubu Celly, however, felt that the budget was good for women and children.

"It is a good budget, especially for women and children. The national plan for elders is very good step," she said.

Thursday, 28 February 2008

Photo Speaks - Now some rest

Photo Speaks - Now some rest

Curtain down for DSF and still the fun goes on. This was an early morning scene from the fun station at the Dubai Creek.

Prices of Selected Commodities Weekly Review dt 28 Feb 2008

Prices of Selected Commodities Weekly Review dt 28 Feb 2008

Source : Ministry of Economics, Khaleej Times

English county cricket teams pick UAE for pre-season tournament

English county cricket teams pick UAE for pre-season tournament By K.R. Nayar, Senior Reporter GULF NEWS Published: February 28, 2008, 00:40

Dubai: Top English county cricket teams have found UAE as an ideal venue for a pre-season tournament.

"UAE is close to UK and has the weather and facilities to play professional cricket before the start of their season," said Matthew Jackson, the Chief Executive Officer Sports Arabia Ltd, the organiser of the Arch Trophy to be held in Sharjah and Abu Dhabi next month.

Top England Test stars like Andrew Flintoff, Marcus Trescothick, Ravi Bopara, Graham Gooch and Mushtaq Mohammad, representing five county teams, will play in the tournament.

"One of our companies, Arabian Cricket Ltd, a tour operator that specialises in organising cricket tours, organised a tour for Sussex and Essex last year.

"They enjoyed playing here. So we contacted the England Cricket board and International Cricket Council for approval to stage a tournament here. We are now sanctioned as an unofficial ICC event," added Jackson.

"We are also staging an Under-19 English schools tournament from March 26 to 31 at the Zayed stadium in Abu Dhabi and a County Academy tournament in December," he said.

Jackson is keen to expand the Arch Trophy next year. "This will be an annual event contested mainly by English teams but we will soon include pro teams from other cricketing nations too," he said.

Elaborating on how he picked the five counties, Jackson said: "Sussex and Essex readily agreed as they played here last year. We approached Lancashire and Yorkshire because they are two of the biggest pro teams in the UK and Somerset as they are the English second division champions.

"We are also keen to develop cricket in UAE and invited the UAE team to gain from the experience of playing some of the best players in world cricket and help them in their quest to qualify for the next World Cup."

Reviving a timeless tradition in Dubai

Reviving a timeless tradition in Dubai
By Shakir Husain, Staff Reporter GULF NEWS Published: February 28, 2008, 00:39

Dubai: The almost extinct Gulf heritage in pearl trading is set to be resurrected in Dubai. However, this revival is a far cry from the old days of pearl diving when divers spent weeks searching for the treasure hidden in oysters.

When the Pearls of Arabia project is completed in two years, creating a pearl business hub on "Antarctica" at The World manmade island cluster, the new face of the pearl trade in Dubai will reflect the progress the city has seen since the pre-oil era.

Led by the Dubai Multi Commodities Centre (DMCC), Pearls of Arabia is designed to serve as a hub for retail and wholesale pearl traders. It will also become a tourist attraction in the city, which is targeting 15 million tourists in 2015.

"This project is the first stage of Dubai's plan to re-establish the emirate as a centre for the global pearl trade," DMCC said.

Last year Dubai set up an exchange to provide a platform for pearl trading.

The 6,000-square-metre Pearl of Arabia features a themed cultural heritage centre, a performing arts theatre, an exhibition gallery and a seafood restaurant alongside boutiques to be run by top pearl fashion houses.

Dubai will invite leading international names in the pearl industry to set up shop in the city. Visitors will travel to the pearl destination by ferries that will serve The World archipelago of 300 islands.

Officials did not get into the specifics of the project, but made their ambitions clear.

Ahmad Bin Sulayem, executive chairman of DMCC, said Dubai is seeking "inspiration from our heritage to build a brighter tomorrow".

He said pearling was the lifeblood of Arabia less than a century ago and accounted for some 80,000 jobs in the UAE alone. Pearling represented 95 per cent of the country's revenues.

"Pearls of Arabia presents age-old wisdom in a modern and contemporary fashion to revive the region's historic legacy for the benefit of future generations," Bin Sulayem said.

DMCC did not say if pearl farming will be part of the project, which is being implemented in association with Australia's Paspaley Pearling Company.

"Historically, Dubai served as the world's hub in the trade of fine-quality natural pearls. Now, almost 100 years later, we are delighted to collaborate with DMCC to revitalise the region's traditional association with pearls," said Nicholas Paspaley, executive chairman of the Australian company.

"Together, we will resurrect Dubai's reputation as one of the world's premier and most important pearl destinations. Dubai will present to the world the best selection of pearls and pearl jewellery that the 21st century pearling industry has to offer, and will showcase the beautiful history and story of pearls," he added.

The UAE had some of the best pearls at the start of the 20th century, but the diving tradition died out in the wake of the wealth generated from oil.

Globally, pearl diving is a thing of the past. Australia has one of the world's last remaining fleets of pearl diving ships. Australian divers dive for south sea pearl oysters to be used in the cultured south sea pearl industry.

However, the Pearls of Arabia is not aimed at recreating the trade in the old style. "It will be a commercial hub with a modern facade," said Gaiti Rabbani, executive director of coloured stones and pearls at DMCC.

Industry award

Along with developing the pearl trade, Dubai will also institute an industry award that will attract global participation.

Dubai is using its strengths in the gold and diamond trade to make pearls a big business in the city.

"We will bring all elements of the jewellery trade together. We will use the same model that has been successful for other industries by offering tax-free benefits and easy rules," Rabbani said.

She said a set of standards will also be introduced to generate consumer confidence in the pearl trade.

DMCC is looking at introducing a uniform certification for pearls, based on globally accepted quality parameters.

The certification will be developed in conjunction with leading gem certification bodies and in consultation with local and international trade players.

History: A feature of life

Arabian pearling developed with the opening of the ancient Silk Route.

In the late 1940s and early 1950s, pearl diving was a key feature of life on the Trucial coast.

Around 80,000 men earned their living from the pearling trade, accounting for up to 95 per cent of national incomes. The Trucial States had 1,200 pearling dhows, of which 335 were from Dubai.

The pearl banks were generally some distance from the coast lying at depths of 46 to 120 feet.

The pearl banks of the Gulf provide the finest pearls in the world due to the formation of the seabed, the temperature and shallowness of the water.

Pearl diving was a hazardous business as navigation was limited to the stars, a simple compass and the captain's knowledge and experience of the pearl banks.

In the 1830-1900 period, output was worth an average of $1.75 million a year, rising to nearly $4 million in the first decade of the 20th century.

Sources suggest that in the Mumbai market, 1gm of fine Gulf pearls may have had the same approximate value as 320 grammes of gold or 7.7kg of silver in 1917.

At the turn of the last century, the UAE had a reputation for having some of the best natural pearls in the world.

By the early 20th century the pearl industry in the Gulf was at its height but it declined during the Great Depression of the 1930s and the development of the more affordable cultured pearl in 1921.

- Source: DMCC

Opec expects stock to keep increasing

Opec expects stock to keep increasing
Bloomberg Published: February 28, 2008, 00:39

Dubai: Oil supply and demand are in balance, and a gradual rise in stockpiles will continue through the second quarter, a Gulf official familiar with Saudi Arabian oil policy said yesterday.

The oil price, which reached a record $102.08 a barrel in New York electronic trading yesterday morning, is higher than it should be and isn't in line with supply and demand fundamentals, the official said in an interview on condition of anonymity.

Saudi Arabia is the largest influential producer within the Organisation of Petroleum Exporting Countries, scheduled to meet on March 5. "Opec is taking a cautious view of the supply and demand balance," said Paul Horsnell, head of commodities research at Barclays Capital in London. "But it seems hard to justify a cut in production, even based on their numbers."

Futures jumped in New York as the dollar fell to an all-time low against the euro. The UBS Bloomberg Constant Maturity Commodity Index rose to the highest ever, on gains for gold, silver, sugar, copper and coffee.

The dollar weakened to $1.5088 a euro, the lowest since the European single currency was introduced in 1999. Oil traded 38 cents higher at $101.26 at 11.54am London time.

Opec will consider all available supply, demand and inventory levels when it meets next week in Vienna, and recommendations from the group's secretariat, the official said.

Position: Group firm on stand

A combination of economic slowdown in the US and a seasonal fall in consumption will hit oil demand and Opec will not increase output when it meets next week, the producer group's president said on Tuesday.

"I can tell you they are not going to increase production because there are plenty of stocks," Opec president Chakib Khelil told Reuters in the Nigerian capital of Abuja.

Adnoc to give full term crude to Asia in April

Adnoc to give full term crude to Asia in April Reuters Published: February 28, 2008, 00:39

Singapore: Abu Dhabi National Oil Co (Adnoc) told its Asian customers that it will supply them crude oil at full contracted volumes for April, unchanged from March as expected, refiner sources said yesterday.

Demand for additional supplies from Abu Dhabi, the main oil producer for UAE, were limited for April as Asia enters the refinery turnaround season and oil demand falls, refiners added, in line with Opec's reasoning that no more oil is needed during the second quarter.

"We got full contracted volumes," a trader with a term lifter said.

The full allocations, and limited additional volumes, come ahead of Opec's March 5 meeting, where members are expected to refrain from raising output due to expectations of slower demand.

Dubai fuel retailers increase price of diesel to Dh12.80 per gallon

Dubai fuel retailers increase price of diesel to Dh12.80 per gallon By Nadia Saleem, Staff Reporter GULF NEWS Published: February 28, 2008, 00:39

Dubai: Dubai fuel retailers have again increased the price of diesel by 30 fils to Dh12.80 per gallon, making diesel in the emirate almost 50 per cent costlier than in Abu Dhabi.

A manager of a Dubai-based transportation company told Gulf News there had been an average 30-fils increase in the price of diesel every month and this had increased his business costs.

Last month diesel sold at Enoc, Eppco and Emarat filling stations at Dh12.50 per gallon, up from Dh11 in October.

"We have to spend time and resources informing commuters of price increases in transportation and then they become very upset and angry," said the Dubai transport company manager, who did not wish to be quoted.

While Dubai fuel companies have been raising diesel prices for months, Abu Dhabi National Oil Company (Adnoc) has kept the price steady at Dh 8.60 per gallon.

Companies in Dubai have argued in the past that they are forced to revise their prices to match the rising crude prices in world markets.

Dubai-Sharjah double decker bus from Aug

Dubai-Sharjah double decker bus from Aug
By Joy Sengupta (Our staff reporter)KHALEEJ TIMES 28 February 2008

DUBAI — Commuting between Dubai and Sharjah is all set to become a pleasure when double decker buses start plying between the two emirates from August this year.

Senior officials of the Public Transport Department in the RTA have said 70 state-of-the-art double decker buses would be plying between Dubai and Sharjah from August.These 90-seat buses are all set to provide the passengers with the much-needed luxury.

Officials told Khaleej Times that they would also start new coach buses between Dubai and Abu Dhabi and Dubai and Al Ain.

The RTA already has a fleet of buses plying between Dubai to Sharjah, but the commuters have complained that at times, they have to stand because of the lesser number of seats.

Thousands of people use the bus service from Dubai to Sharjah everyday. The RTA started the service on the Dubai-Sharjah route in May last year with 90 buses. These were later replaced by more luxurious buses.

“People can catch the new double decker buses from the Al Ghubaiba (Bur Dubai) Bus Station. Initially, we would be operating a fleet of 70 double decker buses, with 90 seats each. This means that more people can travel comfortably at one time,” said an official.

He added that the double decker buses would drop passengers at two bus stations in Sharjah — Al Jubail Bus Station and Al Rolla Bus Station.

“The new buses would be strengthening our fleet and reduce the waiting period for buses considerably. Moreover, the passengers can enjoy a more comfortable journey,” he added.

Talking about the coach buses, the official said each of them had 35 seats and would be travelling on the Dubai-Abu Dhabi and Dubai-Al Ain routes.

Wednesday, 27 February 2008

Here's how you can live a happy retired life with pension plans

Here's how you can live a happy retired life with pension plans

Vidyalaxmi, TNN

A chief executive officer of a leading insurance company had an interesting thing to say on pension plans: “The pension plan of Indians until two years ago was to give birth to a maximum number of sons. The hope was at least one would take care of the aged parents in their golden years.” This school of thought has been challenged with the breakdown of the joint family system.

Indians rarely think they need to bear their retirement costs, nor do they expect the government to play a role. Most Indians feel that their children will bear their retirement costs. But falling fertility rates are resulting in smaller families. The growing stress of mobility in work force is impacting the joint family system and informal support systems are crumbling,” says Aviva India managing director Bert Paterson.

According to an all-India survey done by the Invest India Economic Foundation, less than a sixth of those about to retire, around 113 million by 2016, are covered by some form of pension. Pension plans are one such investment-cum-saving option offered by most insurers for your golden years. In such plans, you pay a fixed premium over a certain tenure, which is the term of the policy. Then the net premium, after all the deductions, is invested by the insurer in various instruments, depending on the type of plan.

Pension plans available

There are two kinds of plans — endowment and unit-linked. Endowment plans invest your money in fixed income products. So you may find the returns low, although safe, after discounting the inflation. The other variant is ULIPs, which invests the corpus in stock markets, balanced funds, etc. Then comes the ‘with cover’ and ‘without cover’ plans. The ‘with cover’ pension plans, as the name suggests, comes with a life cover that takes care of any untimely demise. The most commonly available plan today is the ‘deferred annuity’ plans.

In these plans, the pension does not begin immediately. You can defer it up to a period of your choice. Let us assume you buy a pension plan with a tenure of 25 years. Then your annuity/pension will begin after 25 years from the effective date of your policy. Apart from that, you also have the option of deferring your vesting age. Suppose you have opted for a pension plan, in which the annuity would start from the time you turn 45. But if you plan to work for another five years, then you can defer your vesting age to 50, says Pranav Mishra, senior vice-president & head of products, ICICI Prudential Life Insurance.

Start Early

It is also advisable to start investing early. That will help you save a significant corpus for future. There is certain cost attached to your postponement of investment.

If one delays buying a life insurance policy even by five years, the premium goes up.

Flex it

Another point check is to ensure that the plan offers flexibility so that it fits the customer’s needs as they change. The trend is to opt for a ULIP pension plan with a fixed allocation strategy.

Know the charges

Every pension policy comes at a cost. Briefly, you have a fund management charge, policy administration charge, premium allocation charge and switching charge. A switching charge, however, is applicable only after you cross the switching limit available in every policy. According to industry estimates, the policy administration charge is anywhere between 0.20% and 0.50% of the premium. It depends upon the frequency of the premium and the premium amount.

Premium can be paid annually, semi-annually, quarterly or every month. Fund management charge falls anywhere between 0.75% and 2.5% per annum and the switching charge, if any, is usually Rs 100.

Death of the policyholder

This clause may vary from policy to policy. If the policy holder dies during the tenure of the plan, then the nominee gets the sum assured or fund value, whichever is higher in case of sum assured plans. If the nominee is the policyholder’s spouse, then he/she has an option of either an annuity or a lump sum amount. In case of zero sum assured policy, the beneficiaries get the fund value.

Other options

Should you lock yourself into an annuity plan? Most neutral financial advisors say no. One reason is the annuities are taxable. Secondly the returns are also low.

You earn anywhere around 6-7% on your annuities. Today, a five-year bank deposit, which also offers a tax break on investment under Section 80C offers 8.5-10%. Other monthly income options are the Senior Citizens’ Savings Scheme (SCSS), which offer 9% and the post office monthly income scheme (POMIS) that offers 8%. But again the tenure for these instruments is six years and eight years, respectively.

“I like the concept of annuity. It covers the life risk as an investor gets payouts till his/her life ends. But the rates are even lower than bank FDs. You get around 8-9.5% interest rate on your FDs. Similarly you park your money with the insurer but you earn only 6-7%,” says Swapnil Pawar, a certified financial planner with Park Financial Advisors.

If you have saved a higher corpus for retirement, then you can look at fixed maturity plans or even debt funds as they are more tax efficient than FDs.

Rishi Nathany, another certified financial planner, says annuities are low worldwide. At least in the US, social security benefits are available for senior citizens. But in India, the senior citizens have no such option.

The fact is that annuities ensure regular cash flow in retirement years. In other cases you have to customise your plan, be it a FD or FMP for a regular stream of income.

Larsen & Toubro CMD Naik conferred Danish knighthood

Larsen & Toubro CMD Naik conferred Danish knighthood


MUMBAI: Larsen & Toubro Chairman and Managing Director A M Naik has been appointed as Knight of the Order of the Dannerbrog (name of Danish flag) by Queen Margarethe of Denmark.

The Knight Cross was formally presented to Naik by ambassador of Denmark Ole Lansmann Poulsen here today. It is in recognition of contribution made by Naik in Indo-Danish relationship.

The ambassador said it is a rare honour and very few foreigners have received it. Naik is currently also the consul general of Denmark in Mumbai.

Poulsen said there is large potential for enhancing trade relations between Denmark and India. So far 75 Danish companies have made investment in India making Denmark 19th biggest investor in the country.

Meanwhile, Naik said the company has zeroed in on Hazira in Gujarat to set up its power plant where it will make boilers and turbines. The foundation stone will be laid in one month and plant will be commissioned over the next 24 months, he said.

Stock splits make stock more affordable and liquid for retail investors

Stock splits make stock more affordable and liquid for retail investors

Prerna Katiyar, TNN

Monday morning, when Mr Gupta opened his demat account to check his stocks, he was taken aback. “What has happened to my shares? How can it fall to this level? I bought the share at Rs 1,000 and it is now trading at Rs 240! Has the whole market crashed today or is it just my stock?” he wondered.

This had happened because the company has announced a 4-for-1 stock split and extra shares were still to be delivered in his account. Poor Mr Gupta, who had missed the company announcement, kept thinking he had incurred heavy losses. So let’s make the case easier for him and find the devil in the detail.

What is a stock split?

Stock split is the process of splitting shares with high face value into shares of a lower face value. It is like getting Rs 100 note changed for two Rs 50 notes. Does it change the value of your money? Not really. But now, you also have two smaller denomination notes which would be easily accepted by small vendors. A stock split increases the number of shares in a public company. The price is so adjusted such that the market capitalisation of the company almost remains the same.

Why split stocks?

Companies usually split their stock when they think the price of their stock exceeds the amount smaller investors would be willing to pay. “It is aimed at making the stock more affordable and liquid from retail investors’ point of view,” said Indiabulls CEO Gagan Banga. Generally, there are more buyers and sellers of shares trading at Rs 100 than say, Rs 400 as retail shareholders may find low-price stocks to be better bargains. Stock splits are usually initiated after a huge run-up in the share. This run-up may be linked to the performance of the stock.

Jaaju Jaaju Stories - The Wicked Sons

Jaaju Jaaju Stories - The Wicked Sons

From Jataka Tales

A very wealthy old man, imagining that he was on the point of death, sent for his sons and divided his property among them. However, he did not die for several years afterwards; and miserable years many of them were. Besides the weariness of old age, the old fellow had to bear with much abuse and cruelty from his sons. Wretched, selfish ingrates!

Previously they vied with one another in trying to please their father, hoping thus to receive more money, but now they had received their patrimony, they cared not how soon he left them--nay, the sooner the better, because he was only a needless trouble and expense. And they let the poor old man know what they felt.

One day he met a friend and related to him all his troubles. The friend sympathized very much with him, and promised to think over the matter, and call in a little while and tell him what to do.

He did so; in a few days he visited the old man and put down four bags full of stones and gravel before him.

"Look here, friend," said he. "Your sons will get to know of my coming here today, and will inquire about it. You must pretend that I came to discharge a long-standing debt with you, and that you are several thousands of rupees richer than you thought you were. Keep these bags in your own hands, and on no account let your sons get to them as long as you are alive. You will soon find them change their conduct towards you. Salaam. I will come again soon to see how you are getting on."

When the young men got to hear of this further increase of wealth they began to be more attentive and pleasing to their father than ever before. And thus they continued to the day of the old man's demise, when the bags were greedily opened, and found to contain only stones and gravel!

(From "Indian Fairy Tales" by Joseph Jacobs)

Indian Budget at a Glance 2002 onwards

Indian Budget at a Glance 2002 onwards

Rights issues are a safe bet in bear market situations

Rights issues are a safe bet in bear market situations

Prerna Katiyar, TNN

MUMBAI: Companies like SBI, Exide Industries and Gujarat NRE Coke recently announced rights issues. While their share prices have reduced considerably in the recent meltdown, they’re still trading above the rights price.

The equity market has seen a sharp correction in the past week. Just a couple of weeks ago, companies like SBI, Gujarat NRE Coke announced issuance of rights shares. SBI, for instance, announced a 1:5 rights issue at a price of Rs 1,590 per share.

While the share prices have seen correction (it was at the Rs 2,400-level some days back) to Rs 2,159, the rights price is still at a 25% discount to the latest market price. After adjusting for equity dilution, it’s still available at an 11% discount. The discount factor has reduced, but long-term investors could still consider rights issues like that of SBI, Exide Industries, Gujarat NRE Coke, Dhanalakshmi Bank, Centurion Extrusion if they are upbeat about business prospects.

What is a rights issue?

Rights issues are shares issued by a company only to its existing shareholders. In fact, rights issue is a method of raising further capital from the existing shareholders/debenture holders by offering additional shares on a pre-emptive basis, usually at a discounted price. The number of shares offered depends on the number of shares already held and other terms made in the offer. For example, if you hold 200 shares in XYZ and it makes an offer of one-for-two, you can buy up to 100 shares at the price stated.

Why the discount?

The main idea behind this is to make the issue attractive for its shareholders. Also, as the shares of the company usually fall post-issue due to equity dilution, it makes sense for the company to offer the shares at a discount.

Why does the company offer a discount and not go in for a further public offering (FPO)?

It’s money and nothing else. The company makes the offer to raise capital. This is done either to expand its existing business, set up a new plant, or even pay back loans. “It is largely because the company want to pass on the benefit to its existing shareholders that it makes the rights issue rather than going in for an FPO,” says SBI MF manager Jayesh Shroff. Also, the transaction cost for a rights issue works out to be lower than going in for an FPO.

I’m not a shareholder, can I still benefit from rights issue?

Yes, provided you become a shareholder of the company before the record date. While declaring a rights issue, a company also declares the record date or the date on which a shareholder must officially own shares in order to be entitled for the issue. For SBI, it is February 4, 2008.

One thing to be kept in mind is that you will not be entitled for rights issue if you buy the share on this date. You need to buy the stock two days before the record date for becoming a shareholder. Another important date to keep in mind is the closing date.

What options do you have?

Rights issue is offered to all its existing shareholders individually and you have the choice to reject it (which means, not to subscribe for any shares), accept it in full (subscribe for all the shares offered) or accept it in part. So you do have a right to say no to it.

Can I go in for more shares than offered?

Usually, shareholders are given a chance to subscribe for more shares than offered. Although, there is no guarantee that those number of shares will be allotted.

Is rights issue transferable?

Yes. You can sell them in the open market or transfer it.

Should one always go for it?

“Provided the investor is confident of the company’s management and the business model, one can go for the issue for the simple reason that he is getting the stock at a discount than the present market price,” adds Mr Shroff. Although, in a falling market, the lucrativeness of the offer is falling day by day, one may consider these issues as one is aware of the trading history and performance of the stock.

All that brouhaha about bonus

All that brouhaha about bonus
Prerna Katiyar, TNN

The Reliance Power bonus issue is finally out. The company declared a 3:5 ratio on Sunday giving three extra shares for every five shares held by a shareholder. These shares were issued to only non-promoter shareholders. The record date for the issue is still to be declared by the stock exchange.

What is a bonus issue?

Any company, which has excess reserves that it may have build by retaining part of its profit over the years, may decide to convert some amount into its share capital by issuing bonus shares. This doesn’t change the market value of the company. “It is one of the ways, in which reserves of the company get capitalised,” said PN Vijay Financial Services managing director PN Vijay. In case of Reliance Power, the company is converting its share premium reserves into bonus.

What is bonus ratio?

New shares are issued in the proportion of their holdings. If the bonus ratio is 1:2, for every two shares held by the shareholder, he will get one extra share. This means, if someone was holding 100 shares of a company, he will get 50 free shares making total holding of shares in that company to 150 instead of 100. Rajesh Exports was another company to issue bonus. The ratio declared by the company was 2:1, which means every shareholder got two extra shares for each share held.

Why a bonus issue?

It is one of the ways for companies to capitalise their excess reserves and reward its shareholders. “Rajesh Exports has reserves in excess of Rs 500 crore and so the company decided to pass on the benefit to the shareholders in the form of bonus issue,” said Rajesh Mehta, the chairman of the Bangalore-based jewellery maker Rajesh Exports. Also, a bonus issue is seen as a sign of a company’s good health.

How do shareholders benefit?

The shareholders get the bonus shares for free, thus bringing down the cost of owning the shares and the company’s profit too remain intact. “It’s a win-win situation for both the issuing company and shareholders. While the company doesn’t need to generate free cash and issues the bonus shares from its accumulated reserves, the shareholders get free shares,” said JP Morgan Asset Management India chief executive Krishnamurthy Vijayan.

How does the company benefit?

Corporate actions like dividend payouts and bonus issues are ways of rewarding shareholders. While dividends are paid from profit after tax (PAT), bonus shares are issued from excess reserves the company may have. This means in case of the latter, the company is able to reward the shareholders without touching its profits.

Also, from the company’s point of view, it is more of an accounting entry that moves money from one accounting head to another. “Except for the sentiment among shareholders, there is no change in the company’s valuations after the bonus issue,” said Birla Sunlife Mutual Fund CIO A Bala Balasubramaniam.

Record date & ex-bonus

Record date is the date set by the company for determining the holders entitled to receive bonus shares. For Rajesh Exports, it was February 5, which means that anyone who had shares of the company till this date were entitled for free bonus shares. For Reliance Power, the date is yet to be declared. After record date, shares of the company become ex-bonus.

What about Reliance Power?

Anil Ambani holds 45% stake in Reliance Power and another 45% is held by Reliance Energy. Mr Ambani said he will be transferring his own 2.6% stake in Reliance Power to REL so that REL’s holding in Reliance Power remains intact.

For all those who are still wondering how the cost of acquisition for retail shareholders came to Rs 269, here’s the math: Suppose you were allotted 17 shares, making the total amount you invested to 430*17 or Rs 7,310. After the 3:5 bonus issue, most likely you will get 10 ‘free’ bonus shares, which means you now have 27 shares still keeping the invested amount at Rs 7,310. Now divide 7,310 by the new total number of shares you own (27) and you will get the answer.

41 countries are tax havens according to OECD criteria

41 countries are tax havens according to OECD criteria


PARIS: Data from the Organisation for Economic Cooperation and Development points to 41 countries as having tax-haven status according to four criteria.

The four criteria are: insignificant or non-existent tax levels, absence of transparency in tax matters, absence of fiscal data exchange with other countries and attractiveness for straw companies with fictitious activities.

Some jurisdictions have taken steps to boost transparency in their dealings with the OECD, which seeks to coordinate economic policies among the world's leading industrialised nations.

Others, notably Liechtenstein, Andora and Monaco, exchange no information with other states.

However, of the total, 38 countries have made commitments to the OECD to ensure transparency and to exchange data:

Anguilla Antigua and Barbuda Dutch Antilles Aruba The Bahamas Bahreïn Barbados Belize Bermuda Cyprus Dominica Gibraltar Grenada Guernesey Cayman Islands Cook Islands Isle of Man Marshall Islands Mauritious British Virgin Islands US Virgin Islands Jersey Liberia Maldives Malta Montserrat Nauru Niue Panama Samoa Saint Kitts et Nevis Sainta Lucia Saint Martin Saint Vincent and the Grenadines Seychelles Tonga Turks et Caicos Vanuatu

The OECD has labelled three states as non-cooperative Andorra Liechtenstein Monaco

Tuesday, 26 February 2008

Rail Budget: Cheaper fares, lower freights, easy travel

Rail Budget: Cheaper fares, lower freights, easy travel

In his last full Railway Budget presentation, Railways Minister, Lalu Prasad Yadav offered everything from cheaper fares, lower freights to inclusion of technology in everyday rail life. Lalu had maintained that his Budget would focus on the common man. His Budget has promised the aam aadmi facilities such as more passenger trains, faster and easy travel procedures (ticket-booking and transport), reduction in passenger fares and fuel freights, discounts to females and senior citizens; to name a few. His Budget may have been directed to deliver part of his aforementioned promises.

Fare cuts

The Railway Minister has introduced a 5% cut in sleeper class as well as second class fares. Further fares for AC I, AC-II and AC-II have been cut by 7%, 4% and 3%, respectively.

All passengers above 60 years of age will now get a 30% discount, while females above 60 years would get a 50% discount.

Freight – related initiatives

The freight on petrol and diesel has been cut by 5%, while those on fly ash have been cut by 14%. The Railway Minister has cut the highest freight rate classification to 200. He sees the FY08 coal freight loading at 336 metric tonne. Yadav sees the total FY09 freight loading at 790 metric tonne as against 785 metric tonnes in FY08. He estimates around 310 metric tonne of additional freight loading in the next three years.

Easy Travel/ Better facilities

The Railways would be launching the Go-Mumbai Card/ Smart Card facility soon for easier ticketing for commuters. Besides, there will be an increase in ticketing counters to 15,000 in the next two years from the current 3,000 now. The number of auto ticket-sale machines would go up by 6,000 in the next two years. Yadav plans to look at leveraging the telecom boom for ticketing purposes. In this regard, trials for mobile ticketing have already started. The Railways plans to display online information in overnight trains of long distance.

For the convenience of commuters, especially senior citizens, 50 large stations across the country will have lifts and escalators, while 30 bigger stations would have multi-level parking system. The Ministry plans to run the Mother-Child Healthcare Express in alliance with the Rajiv Gandhi Foundation.

Apart from the facilities to the consumers, for those interested in joining the railways, the Group-D railway examinations would be taken in Urdu also, where it is the second language.

Technology updation

Lalu Prasad Yadav announced that the Government would introduce low maintenance and more comfortable stainless steel coaches from 2010. He said that Rs 4000 crore would be spent on green toilets for 36000 coaches in the next 5-year plan. All the trains will be run via online control in the next two years, Yadav promised. The trains would be linked via software communication by 2009.

The Railways need Rs 250,000 crore worth of funds over the next five years for IT upgradation, Yadav said. CCTVs and metal detectors would be put up at all stations, he informed. He will look look at multi model parks for Railways at various locations, he said.

Infrastructure updation

The Railways will start 53 new passenger trains. It will upgrade its infrastructure in the next seven years at the cost of Rs 75,000 crore. These funds would be employed to further develop saturated transportation lines. It plans to set up a 20,000 km high-density network. The work on connecting road for Pipavav Port has been completed, Yadav said. 25 tonne and 30 tonne axle-load trains will now be allowed for iron ore transport, he informed.

The Railway Minister informed that their 100 million tonne-worth business will come from the cement industry; which he targets as 200 million till 2011. Also, he aims to raise the annual steel traffic to 200 metric tonne in 2011 from the current 120 metric tonne.

Further, 50 new terminals would be developed for storage. He announced Special Purpose Vehicles (SPVs) for for links to Mundra, Kandla and Krishnapatnam ports.

Past Performance

According to the Budget Report, the Railways have a cash surplus of Rs 25000 crore in FY08. Its operating ratio is at 76%. Its work force stood at 14 lakh workers in FY08. The Minister informed that reduced fares increased volumes and profits.

The Railways has earned a cash surplus of Rs 25000 crore in FY08. Its operating ratio is at 76%. Its work force stood at 14 lakh workers in FY08. Yadav informed that reduced fares increased volumes and profits.

Some highlights of the Railway Minister's speech:

* Sleeper, II class fares cut 5%

* 10 Garib Raths in FY09

* Fares for AC-I cut by 7%, AC-II 4%, AC-III 3%

* Freight on fuels cut 5%

* Rs 68788 cr for 5 years cash surplus

* Dividend of Rs 88 rupees

* There were lean season discounts offered

* Peak season attracted surcharges

* Railway Fund Balance up at Rs 20,480 cr

* Railways adopted tariff to up market share; revenue

* Apr-Dec freight loading revenue is up 8-10% at Rs 34,700 cr

* Railways will look at leveraging telecom boom for ticketing

* There will be an increase in ticketing counters to 15,000 in 2 years from the current 3,000 now

* Revenue from passenger fares increased by 14%

* FY09 freight loading seen at 790 MT vs 785 MT in FY08

* FY08 rail operating ratio at 76.3%

* Trials for mobile ticketing have already started

* Railways to launch the Go-Mumbai Card/ Smart Card

* Online information display in overnight trains of long distance

* Rs 4000 cr to be spent on 36000 coaches for greent toilets in next 5 year plan

* Low mainenance and more comfortable stainless steel coaches to be introduced from 2010

* To have online control of trains in 2 years

* To link trains via software communication by 2009

* New coaches in all Rajdhani trains by 2010-11

* To start making steel coaches from FY09

* Level of Platforms to be upgraded for passenger convenience

* 30 Bigger stations to have multi level parking system

* 50 large stations to have lifts / escalators- for convenience of senior citizens

* 233 million ton loading was done in the year

* Additional earnings of Rs 2000 cr on freight service

* To upgrade infrastructure in 7 years at Rs 75,000 cr

* 310 mn tonnes of additional freight loading in the next 3 yrs

* 75000 cr in next 7 yrs to further develop saturated transportation lines

* To up auto ticket sale machines to 6,000 in 2 years

* Plan to set up 20,000 km high density network

* FY08 coal freight loading seen at 336 MT

* Work on connecting road for Pipavav Port completed

* 25 tonne and 30 tonne axel load trains allowed for iron ore transport

* 100 mn tonne business from cement industry

* 200 mn target targeted till 2011

* 50 new terminals to be developed for storage

* SPV for links to Mundra, Kandla, Krishnapatnam ports

* 25-30 tonne axle load trains to be started

* Annual steel traffic aim of 200 mt in 2011 vs 120 mt now

* To manufacture 20000 wagons in 2008-09

* To manufacture wagons having capacity of 22.9 tonnes in 2008-09

* 50 big terminals planned in Mumbai, Pune, Ghaziabad

* Concor to set up 8 depots

* Wagons would be available on lease here on

* Have 15 licensed operators for container trains

* To increase container train operators to 50-55 trains

* To have new wagon leasing policy

* New Bulk handling facilities to be erected for cement

* No busy season surcharge for cement transported in bulk via new facilities

* To have new policy for bulk handling terminals

* Special focus on door to door and value added services

* No busy season surcharge for bulk cement transport via new facilities

* SBUs (Strategic Business Unit) planned for cement, steel, coal, container sectors

* Rs 250,000 cr worth of funds required by the Railways over the next 5 years for IT upgradation

* 1 lakh crore worth of PPP (Public Private Partnerships) planned over the next 5 years

* Will look at multi model parks for Railways at various locations

* Railway property to fetch 4000 crore in 2008-09

* CCTVs and metal detectors to be put up at all stations

* 60 yrs and older passengers get 30% discount, female above 60 get 50% discount

* Plan fire prevention device in coaches on pilot basis

* Anti-fire gear to cost Rs 7,000 cr if pilot successful

* Mother-Child Healthcare Express to be run in alliance with Rajiv Gandhi Foundation

* Group-D railway examinations to be taken in Urdu also, where it is the second language

* To start 53 new passenger trains


Takreer plans to build new refining unit at Ruwais

Takreer plans to build new refining unit at Ruwais By Himendra Mohan Kumar, Staff Reporter GULF NEWS Published: February 25, 2008, 23:40

Abu Dhabi: The Abu Dhabi Oil Refining Company (Takreer), plans to build a new refinery with a capacity of 417,000 barrels per day (bpd) at Ruwais, 240 km west of Abu Dhabi, a senior company executive said on Monday.

"The project is in the front end engineering and design (FEED) phase. This phase will be completed in a year and then the construction of the unit will begin, subject to necessary approvals, with its completion planned for 2013," Takreer general manager Jasem Ali Al Sayegh told delegates at the ongoing Middle East Refining Conference here.

He declined to comment on the estimated cost of the project.

"We will have an estimated cost one year from now," said Al Sayegh, but admitted that Takreer is feeling the heat of project escalation costs, which is a global phenomenon.

Al Sayegh said the new refinery will complement Takreer's present 400,000 bpd plant at Ruwais.

The Ruwais refinery currently processes 120,000 bpd of crude oil and 280,000 bpd of condensate.

In addition, Takreer operates the 85,000 bpd Abu Dhabi refinery located on the outskirts of Abu Dhabi.

Al Sayegh said Takreer's future plans are driven by the demand growth for petroleum in the local and international markets.

The refiner's green diesel project, which aims to reduce sulphur content in gasoil as mandated by the government, is planned for completion by the end of 2011.

In addition, Takreer is building an inter-refinery pipeline, which will connect both refineries with its Musaffah product dispatch terminal in the second quarter of 2008.

"This project, upon completion, will eliminate shipment of products between refineries," said Al Sayegh.

Another senior Takreer executive said nearly 30 per cent of the refiner's output constitutes gasoline and diesel.

"As of now, we don't import any oil products. We meet all our domestic fuel requirements and export too. We are exporting diesel, jet fuel and naphtha, mainly to Japan and the Far East," said the Takreer executive.

He said the Ruwais refinery, which at present is undergoing partial maintenance, will resume normal operations within the next 25 days.

Takreer was established in June 1999 to take over the responsibility of refining operations of the Abu Dhabi National Oil Company (Adnoc).

du and Reliance Globalcom sign deal to offer new services in UAE

du and Reliance Globalcom sign deal to offer new services in UAE Staff Report GULF NEWS Published: February 25, 2008, 23:40

Dubai: du, the UAE's new telecommunications services provider, yesterday announced the signing of an agreement to seamlessly interconnect with Reliance Globalcom to offer a variety of domestic data services.

"We are pleased to expand our services by connecting the UAE to the Reliance Globalcom network via a strong regional partner such as du. Our relationship with du is part of a strategy to collaborate with quality service providers and leverage each other's strengths to extend network capability and reach in the region to serve the fast growing needs of our customers," said Punit Garg, President of Reliance Globalcom.

Besides offering bandwidth, strengthening the capacity and resilience of the networks, the strategic agreement will enable du and Reliance Globalcom to jointly offer a comprehensive range of value-added data services from the virtual PoP, which relays calls via third party circuits to the internet provider's central location.

Fast emerging services like global ethernet, managed services, IP VPN and MPLS will also be offered under the agreement.

"The strategic agreement will create tremendous synergies for all concerned. It marks a significant step for us towards our journey to become the regional hub as part of our international strategy," said Osman Sultan, du's Chief Executive Officer.

Andrew Grenville, du Executive Vice-President, International and wholesale, added, "du customers will benefit from direct access to the Reliance Globalcom worldwide network."

Friday sermon to be telecast live in sign language

Friday sermon to be telecast live in sign language
By Adel Arafah (Our staff reporter) KHALEEJ TIMES 26 February 2008

ABU DHABI — The Juma (Friday) sermon at Shaikh Zayed Mosque in Abu Dhabi will be telecast live in sign language from the first Friday of March, Dr Mattar Al Ka’abi, Director-General of the General Authority for Islamic Affairs and Auqaf (Endowments), said recently.

Emirates TV channel would telecast the sermon in sign language every Friday, he said.

The move was part of the authority’s commitment to the people with hearing and speech difficulties, who number more than 200 in Abu Dhabi alone as per the statistics issued by the Zayed Higher Foundation for Humanitarian Care, he said.

The authority had signed contracts with two specialists in sign language to convey, in detail, the Juma sermon, he noted. These people with special needs are an integral part of the society, and the authority was planning to introduce sermons in sign language in more mosques in all emirates, he added.

Want to test your fitness, climb 55 floors

Want to test your fitness, climb 55 floors
By a staff reporter KHALEEJ TIMES 26 February 2008

DUBAI — A high rise stair climb in Dubai’s iconic tall buildings will be held on February 29. As part of it, participants will scale 55 floors to test both their endurance and fitness.

The ‘Dynamisan High Rise Stair Climb’ was announced yesterday by Novartis Consumer Health (NCH).

The climb, to be held at the A W Rostamani 21st Century Tower in Dubai, is expected to be rolled out throughout the GCC countries over the coming months.

With the increasing incidence of lifestyle diseases such as diabetes and cardiovascular diseases in the UAE, this climb aims to showcase the benefits of taking the stairs and getting more physical exercise to combat obesity and help ensure a healthy lifestyle.

Stair climbing is an effective cardiovascular work-out and burns twice as many calories as other sporting activities; 15 minutes of stair climbing produces the same results as 30 minutes of running. Climbing up the first 20 flights will be aerobic, after which the climb will intensify becoming an intense anaerobic work-out.

Samah ElManzalawy, Dynamisan Brand Manager from Novartis Consumer Health said, “We all work long hours and tend to neglect our health, especially with regards to exercise. We are often too tired to exercise, even though it will give us an energy boost.”

The event is open to everyone.

Emirates to fly non-stop to Kozhikode

Emirates to fly non-stop to Kozhikode
By a staff reporter KHALEEJ TIMES 26 February 2008

DUBAI — Emirates yesterday announced it will launch non-stop flight six times a week to the southern Indian city of Kozhikode (Calicut) from July 1, 2008.

Boosting air connections between the booming Indian and Gulf economies, Kozhikode will become the third city in the state of Kerala to be served with non-stop Emirates flights from Dubai, after the airline introduced services to Kochi in 2002 and Thiruvananthapuram in 2006.

Kozhikode will also become Emirates’ 10th destination in India.

On the Dubai-Kozhikode route, Emirates will initially operate its Boeing 777-200 and Airbus A330-200 aircraft.

No ban on YouTube in UAE

No ban on YouTube in UAE
By Asma Ali Zain (Our staff reporter) KHALEEJ TIMES 26 February 2008

DUBAI — Internet users can be rest assured that YouTube, an active video sharing web site, will not be completely banned in the UAE as its content is already being regulated by the Telecommunication Regulatory Authority (TRA).

Users were concerned after Pakistan on Sunday asked its Internet service providers (ISPs) to completely ban the web site until further orders for posting blasphemous material.

A spokesperson for the TRA told Khaleej Times yesterday, “We have given choice to the Internet users in the country and not blocked the web site entirely. Adult content on the web site that is clearly against the religious, cultural, political and moral values of the UAE will automatically be blocked.

“Our ISPs (Etisalat and du) have an understanding with YouTube in this regard. Nearly two years ago, YouTube was blocked in the country. However, the TRA wants to provide flexibility to its subscribers. Therefore, the web site can be accessed in the country though objectionable content will remain blocked,” said the spokesperson.

“Following reports from Pakistan banning the site for blasphemous material, we were concerned that the UAE might follow suit since this is an Islamic country. Thankfully, the site is still accessible. Despite its drawbacks, it remains a rich source of information. It is fair though that the content is monitored and blocked if that is the rule in the country,” said Linda Brehick, a user.

“I think that the web site should be banned completely in the country because even though it is being monitored closely, there are certain objectionable materials that I would not like my children to see. It is practically impossible to monitor your children all the time. If the ban is in place, we can be assured that they will not have access to the site,” said Farida Mohammed.

According to Wikipedia, YouTube is the third most visited web site (as per statistics from Alexa Internet). It has been censored several times in some countries since its launch and it is banned in several countries including Brazil, Iran, Morocco, Pakistan, Syria, Thailand and Turkey. Saudi Arabia and the United Arab Emirates only block content that is not in line with their policies.

Monday, 25 February 2008

How to achieve your financial goals

How to achieve your financial goals
Sheetal Mehta | February 25, 2008 for

Saurabh Awasthi, 26, a media professional from Hyderabad was trying to figure out his financial goals. His wife Seeta, 25, too, was helping him in the exercise. At the end of the day both Saurabh and Seeta had exhausted themselves. They could not figure out as to what their priorities were: Planning for their 2 year old son's higher education, buying a home for themselves which they desperately needed or spend Saurabh's bonus on a world tour.

This, often, is the dilemma faced by many people planning their future finances. The most common question in such cases is how you should plan your finances. In the fast-growing Indian economy everyone is so keen on concentrating on their career and earning as much money as possible that they forget that the surplus money has to be invested for the future.

Or even if you do remember a bandwagon concept is adopted ?invest where everyone else is investing. But in the world of financial planning you must remember that one size does not fit all.

In my interaction with the people who I come across and further discussions with them I have noticed that they lack a clear picture of the purpose of their investments. Everyone just wants to invest and become rich. I wish if that were so easy.

Do not invest just for the sake of investing. As Ralph Seger rightly said, "An investor without an investment objective is like a traveller without destination." Although this quote has been used n number of times I would still like to use it here as planning without a definite goal is akin to a traveller without destination.

First and foremost you must remember the most important aspect of financial planning, and that is, what you want to achieve? Try doing this: jot down 5 important financial goals that you want to achieve in the next 10-15 years. I am sure not many will be able to do this.

But there is a simple way that may help you to develop a fundamentally sound financial plan and achieve goals for which you are working so hard. The first and foremost step is to note down your goals as this is the starting point of your planning.

Don't get foxed by returns on your investments

Goals give you an idea as to what you want to achieve. They can vary from just plain savings to your retirement, to your child's education, buying a house, buying a car, funding your or your son's/daughter's marriage etc. The job does not end here though. Even after listing them, you must have a clear vision about their priorities. The best, way to make this daunting task easy is to divide your goals into the following three categories:

~ Responsibilities: Like providing for your parents, providing education to your children, funding their marriage, meeting any unforeseen events etc.

~ Needs: This includes requirements that you have like providing for retirement, buying a house, providing for day-to-day life and also saving for the near future, etc.

~ Dreams: Or aspirations. It can be anything like buying a luxury car to buying a solitaire for your wife or a world tour. Your dreams may be out of reach but there is no harm in listing them as this can act as a constant reminder for you to work hard.

Based on the above three criteria you categorise your goals. You need to prioritise the above listed goals in an order of importance in your life and their requirements.? There needs to be a fair balance drawn between needs and responsibilities as at a certain point in time both could be equally desired by you.

Time frame

Once you have set your goals then the second important step is to decide the time frame in which you would like to achieve them. This factor is very important when you are planning to invest. The time period for investment is based on the time in which you wish to achieve your set of goals.

Let's take an example to understand it better.

Say you are planning to buy a car but are not sure when you can do it. You invest a part of your money in Public Provident fund, National Saving Certificate, Infrastructure bonds and some close-ended funds. After say 4 years a new car is introduced in the market which suits your requirements and you decide to buy it. But your entire sum is blocked as all of them have been invested in products which have a lock-in period.

Let me take one more example. Say your child's admission to higher education is just a year away. You are planning to invest money to meet this requirement. Carried away with the stock market boom you invest all your money in the market. Just a few days before paying the fees the stock market crashes and your capital is reduced to half.

Remember that stock market is a good avenue to invest but only if you are a long term investor and your goal is at least 8 to 10 years away and not when it just a year away. You need the capacity to hold and stay invested. Also, to enter the stock market with the intention to be a trader and not an investor is a risky affair and such foolishness is better avoided.

However, it is not necessary to fix an exact time frame. A rough estimate of when you will need money can also give you a picture as to how to plan your financial goals. However, if you do not give a set time to achieve your goals then you may not only digress from the right path of planning but also end up depleting your hard earned money.


After you have done the above two exercises you need to put a financial figure as to how much money you will require when you reach that stage. That is, you must know the future value of your requirements in today's cost. For instance, a two year MBA today may cost you say Rs 4 lakhs but eight years down the line you will surely need a higher amount for the same course.

To overcome this, the best way is to prepare a chart as given below:

(The above table is hypothetical)

You need to factor in the inflation cost and find out what will be the future value of financial goals. This can be calculated using a simple formula:

FV = Present Value * (1+ Inflation rate) ^ number of years left to achieve your goal

FV = 4,00,000 * (1+6%) ^ 8

FV = Rs. 6.37 lakhs (approximately). So this is the figure for which you need to plan for.?

I hope the above will help you lay a path for your investment planning. Planning varies depending upon your needs but the factors that help lay a path to your plan remain same for everyone. The above process gives you a clear picture as to the path you need to follow to achieve your goals. It also helps you to decide on the most suitable investment that will help you and not your friend or neighbour.

The author is a financial consultant and can be reached at

Virgin Atlantic jumbo jet is first airliner to fly partially on biofuel

Virgin Atlantic jumbo jet is first airliner to fly partially on biofuel

By Juliana LazarusPages Editor GULF NEWS Published: February 24, 2008, 23:07

London: Sir Richard Branson was one happy man yesterday when Virgin Atlantic became the first airline in the world to fly a commercial aircraft on biofuel.

The passengerless Boeing 747 jumbo jet made the journey from London to Amsterdam with one of its engines powered partially by biofuel made from babassu nuts and coconut oil, ingredients that are commonly found in products like shaving cream and lip balm.

The ratio of the blend was 20 per cent biofuel and 80 per cent standard fuel, Sir Richard said at Heathrow Airport before the launch, the result of a venture between Boeing, GE Aviation and Imperium Renewables.

"There were several reasons why Virgin chose babassu nuts and coconut oil over other energy sources," Branson said.

First, unlike ethanol it did not freeze at altitudes above 30,000 feet. Second, both fuel sources did not compete with staple food crops and did not mean deforestation - they were in fact harvested from existing plantations. Third, there was no need to modify either the aircraft or the engines for the flight.

Sir Richard conceded that the biofuel was still several years away from certification, but he was confident that when that happened, it would not only mean smaller carbon footprints in the aviation industry but also cheaper airfares.

Use of seatbelts in back seats may be made compulsory

Use of seatbelts in back seats may be made compulsory
By Alia Al Theeb, Staff Reporter GULF NEWS Published: February 24, 2008, 23:29

Dubai: Police are working with the Interior Ministry to issue a law that considers making not wearing seatbelts in the back of a car an offence, a senior police official announced on Sunday.

Brigadier Mohammad Saif Al Zafein, Director of Dubai Police's Traffic Department, did not elaborate on the issue, but stressed the importance of wearing seatbelts at all times. Currently, only front seat passengers need to wear seatbelts by law.

Police issued around 25,520 offences for not wearing seatbelts in 2007 with an average of 2,126 offences monthly. Brigadier Al Zafein announced the launch of a two-week awareness campaign on wearing seatbelts which began yesterday.


He said awareness regarding wearing seatbelts had started going down and the number of motorists who now wore seatbelts was only 50 per cent. Brigadier Al Zafein revealed that 332 people were killed in traffic accidents last year and it is estimated that 40 per cent of those victims in collisions were not wearing seatbelts.

He pointed out that 16 per cent of people who were killed in accidents where cars flipped over in 2007 were not wearing seatbelts. The fine for not wearing seatbelts is Dh100 and three black points. The law fines the motorist and the passenger sitting next to the motorist.

"We are coordinating with the Interior Ministry to issue a law that considers not wearing seatbelts in the back seat a punishable offence," Brigadier Al Zafein said.

He said the first week of the campaign would focus on spreading awareness on the importance of wearing seatbelts and the importance of using child car safety seats.

The second week will focus on road control and issuing fines to offenders.

"Seatbelts do not prevent accidents but they do reduce the damage to the lowest levels," Brigadier Al Zafein said.

He pointed out that traffic police issued 14 fines to motorists who allowed children under 10 to sit in the front of cars.

Lieutenant Colonel Dr Jasim Mirza, Director of Dubai Police's Security Awareness Department, said the focus of the campaign would be on educating schoolchildren.

Dubai Police's Traffic Department launched the campaign in coordination with the Santis HSE Group, a Global Health, Safety and Environment Consultancy and Gargash Enterprises.

Santis HSE Group and Gargash Enterprises officials will take the campaign to schools, streets and shopping malls in Dubai to promote safety and give out complimentary child car seats and car safety packages.

Black points await errant drivers

Black points await errant drivers
By Rayeesa Absal, Staff Reporter GULF NEWS Published: February 24, 2008, 23:29

Abu Dhabi: A black point system for traffic offences is to be implemented across all the emirates starting March 1, senior Ministry of Interior officials said on Sunday.

On March 1, the new Unified Federal Traffic Law comes into effect putting in place hefty penalties for serious traffic offences as well as black points against the licence of the driver.

"Earlier errant drivers could get away with paying comparatively low fines, but from now on the rules are getting tough", said Lieutenant General Saif Al Shafa'ar, Undersecretary of the Ministry of Interior, at a press conference, announcing amendments made to the Federal Traffic Law. Fourteen amendments have been made to the traffic law.

"The lives of 1,056 people were lost in 2007 alone all over the country in traffic accidents. This number is what forced the ministry to come up with the changes," he said.

The strategy of the ministry is to cut down traffic deaths as much as possible by effective changes in the traffic law clubbed with stringent implementation techniques, Al Shafa'ar said, adding that the new law will save lives and create a safe environment for all road users.

The maximum number of black points a motorist can incur in a year is 24 at which point his licence is suspended. Once a person collects 24 black points, the licence will be suspended for three months. If a motorist collects 24 points for the second time, the license will be suspended for six months. If it happens for the third time, the licence will be taken away for one year and will not be returned until the driver passes a training course from an institute authorised by the traffic department."

Senior officials said that if a motorist has collected, for example, 20 black points and feels that his licence could soon be taken away if he accumulates 24 points, he can take a training course at an authorised driving institute. Police will then remove 8 points. This option can be utilised only once a year.


If a driver is below 21 years and collects 24 black points, then the licence will be impounded for six months. It will be returned after the driver passes a driving course. Also, if a driver gets 24 black points within six months of issuance of his licence the licence will be cancelled and the person cannot apply for a test only after one year following the date of cancellation.

All government owned vehicles are exempt from these rules. The traffic department will inform the owner about details of the offences. If the vehicle was driven by another driver, the owner must send the driver to the traffic department within a month of notice. Otherwise the vehicle may be impounded for a month.

If the driver of a heavy vehicle has caused an accident which results in the flipping over of vehicles, or he has jumped a red light or overtaken in places not allowed, the vehicle will be impounded for one month and licence will be suspended for one year.

The ministry has already started an awareness campaign to reach out to all sections of society to familiarise them with the new law. Arabic, English, Urdu and Malayalam brochures will be distributed to the public as part of the campaign.

As part of the new law some vehicles have been exempt from registration and licensing fees such as vehicles belonging to those with special needs.

New leaf: Cancelled every year

In case a person gets five black points in May 2008 and gets another five in October, the points incurred in May 2008 will be cancelled in May 2009 unless the motorist has incurred 24 points in the year when the licence will be suspended.

Similarly, the points incurred in October 2008 will be cancelled in the same month the following year.

Saturday, 23 February 2008

FXLabs, Zapak, Sify Launch "Agni"

FXLabs, Zapak, Sify Launch "Agni"
Techtree News Staff

Game company, FXLabs, has launched its first PC adventure game, "Agni" starring Malaika Arora Khan as the lead character. For which, the company has partnered with Zapak and Sify.

FXLabs claims "Agni" is the first PC game developed in India. "Agni" is designed as a third person shooter-role playing game or TPS-RPG that features more than 10 original scenic stages, and four different characters named Tara, Ghayab, Adhira, and of course, Agni.

Speaking at the launch, Sashi Reddi, founder and chairman of FXLabs, said, "Agni will provide Indian gamers with international quality, and content with local flavor at Indian prices. We have followed international 'AAA' production standard that rivals the best PC games in quality."

Zapak will be the Buzz Marketing Partner (360 degrees) for "Agni" and will promote the game both online and offline via Gameplexes. While Sify will market the game online and through their GameDromes.

Also present at the occasion, Arun Mehra, chief marketing officer of Zapak Digital Entertainment, said, "We would get our users to sample the game through a 60 minutes trial version, which we will launch on soon. We will be promoting the game offline through our Gameplexes in 11 cities and host a tournament around it, to be flagged off by Malaika Arora Khan in Delhi next week."

Meanwhile, those who want to try their hand at "Agni", can download the game from the FXLabs Web site.

Change your signature, change your life

Change your signature, change your life

Ever wonder how much your handwriting says about you? Sure, you've heard about handwriting analysis and how the way you write a particular alphabet or sign your name can say a lot about your personality, but did you know that changing the way you write can improve your career or help you get over your inhibitions?

Sounds improbable but Chandraprabha Pupala helps people do exactly that. A trained graphologist and graphotherapist, Chandraprabha has been training people to improve themselves by improving their handwriting for the last five years.

In a telephone interview with's Shifra Menezes, she talks about the relatively unknown field of handwriting analysis and how she stumbled on to this unusual career choice.

Graphology is an unusual choice for a career. What initially got you interested in it?

Honestly, as a child I was very curious about why people behave the way they do. So I would observe them and study them but I never found any interesting way to know more about what made them tick. That's why I decided to become a psychiatrist.

So I took the medical entrance exams, and got into homeopathy. There was no scope to get into an MBBS course as per my score. I finally got tired of the whole process and took a one-year break.

It was then that I came across this book on graphology. As I learnt more about it, it was so interesting. In fact, my handwriting indicated that I would not have made that great a doctor.

It can be that specific?

I can be. The specific traits required by a doctor, say memory association needs to be stronger while creative association is much less compared to say an architect.

So I dropped the idea of becoming a doctor and decided to do a degree in management and I studied for the international certificate in handwriting analysis from the US, which I completed in 2003.

How did you get started professionally?

By the time I completed my course I had started reading quite a bit about it. There were people on whom I practiced my skills and I kept experimenting. A college friend of mine, Hitesh Jirawla (he is now my business partner), kept pushing me to try it professionally. At that I point I wasn't very confident about the acceptance of the whole concept.

I remember the first time -- we decided to approach one of the country's leading coffee shops. So we went and met people there but the response was very disappointing. They were pretty resistant to the idea and said that if at all we wanted to do it, we couldn't charge anything.

So that was disappointing, there was no real acceptance for this kind of work.

After that we did some more research how to approach people with our idea and I gathered the courage to approach Cafe Coffee Day. There we got a nice response. They introduced this process in their HR procedures, for recruiting area managers and higher-level personnel.

After some time, I started working with the outlets as part of their marketing activities where I would sit at various outlets across Mumbai and analyse the handwriting of their customers where they could get a coffee for free.

Tell us a bit about graphology and what you do.

I have noticed that many people do know quite a bit about handwriting analysis, but that's not all there is to it. You also need to understand behavioural patterns, how a person reacts, what are their defence mechanisms.

When we label a particular trait, saying the handwriting indicated it, most of the time people refuse to accept it -- they get offended, or they have their inhibitions about revealing their weaknesses. So the process has to be handled as a counselor, which is the most important thing.

We are working on spreading awareness and we want people to get into this particular stream.

We also follow up on the people we work with, to measure efficacy and also, this kind of business will not survive without case studies and actual proof that it works.

We say your public image is your signature. In the corporate world, the biggest challenge people face is portraying one's talent. The biggest gap is between what you are and what you want to project to the world.

We don't realise that we might just be portraying a negative aspect or an unhealthy aspect of ourselves. This then becomes a habit. Most people reflect different personalities with different groups of people, this is because somewhere along the line one is projecting oneself on a wrong frequency. By changing the signature or designing one's signature we attempt to align what you are and what you want to project to the rest of the world.

There are a lot of people who use standardised signatures, which I find a little funny. Everybody has their own ambition or life patterns and what works of one person will not work for another.

What people must understand is that it is not about having a simpler life but about helping you achieve your true potential. The compatibility between what you are and what you want to be is the most important, which very few people actually get.

How accurate is graphotherapy in addressing a person's fears etc?

I believe the accuracy in ascertaining an individual's personality from their handwriting has an accuracy of 90-95 per cent.

Tell us about your company.

Chandraprabha wasn't a formal company until two years back. Up until then we were just freelancing, and the tie-up with Cafe Coffee Day was on for about a year or so. At that point we hadn't even thought of making a company out of it because there was a lot of resistance and questions about the whole thing.

After we completed the course, Hitesh and I decided that we would take up working on the therapy aspect of graphology. At that point there was nobody in India who addressed this aspect professionally. The concept was usually confused with other concepts. People usually undertake teaching and training at times but those are not that specific.

The application on graphology and graphotherapy has huge scope, so we decided to explore this route.

What were the challenges you faced?

Firstly, people were not really aware of how graphology works and didn't really believe that it was effective. There was a lot of energy that we had to put in to convince them that it works. That was the biggest challenge.

Right now we don't have any competitors as such, but taking this up as a full-time career has its own risks. When we take the idea to a company, we first have to begin with making them aware of the particular science, then that it does, in fact, work.

Once they are convinced it works, they begin accepting it and the business aspect comes in. This is a long process for anybody.

Do you train people in graphology?

We do train people, but that is a very select work. It's mostly done in the HR projects.

Most of the work happens when people want to transform themselves and their lives. So that includes handwriting analysis and signature design, which means changing handwriting and changing personality which is graphotherapy.

Tell us about your clientele.

There are a lot of people in senior management positions with whom we work -- CEOs and MDs. We also work with individuals who want to transform their lives and there are a number of celebrities as well.

We have worked with Devita Saraf who is director of Zenith Computers and CEO, VU Technologies, Ruchir Mody, managing director, Torrent Pharma, Sabira Merchant had got her handwriting analysed a while back.

Over the last five years, we have analysed over 10,000 individuals. However, we still rely highly on word of mouth promotion.

How many people do you have on the team?

I'm the only graphologist on the team. The rest of the team is on the admin side of things. There is a whole module clients need to follow for the therapy to be effective.

It is not a future predictive science at all. Handwriting works on a simple principle, where your brain gives instructions to your hand to write; what we are doing is using your hand to give instructions to your brain.

When you are thinking there is a chemical process happening in your brain, a chemical pathway is formed called a neuropathway. Now every time you write, a neuropathway is created. When you make a change in your handwriting you are actually altering your neuropathway.

The therapy works on exercising your handwriting. We develop a stroke looking at your requirements. It's not that your handwriting will look beautiful after the programme, but it works on addressing a particular fear or weakness.

So, we work on a particular letter or stroke for a minimum of 45 days, and then the hand gives instructions to your brain. That's when it begins to work in a mechanism.

How does one go about establishing a career in this field?

At this point in time in India, firstly one would require all the skills of an entrepreneur to take it up full-time -- a lot of determination, a lot of courage. You have got to be persistent, and push through no matter how tough the going gets.

Another thing that people must understand is that it is not a future predictive science. Once people actually understand that, their interest level tends to just drop. It's more like a psycho-analysis of an individual's personality.

It is a big responsibility, because you are trying to help people improve themselves. So whether you are reading a book or getting trained by someone, you need to be aware of that responsibility.

Five years down the line, is it still a challenge to convince people?

There is still a lot of resistance to the idea, people still do have reservations. However, I have done a few media events with news channels and radio stations. That has opened people up quite a bit, but there's still a long way to go.

Is there money to be made in such a profession?

The cost of our services ranges anywhere from Rs 5,000 for an individual to Rs 60,000 for corporates. When we started out it was Rs 50 to Rs 100.

Are there courses in graphology in India?

There are many people who claim to offer courses in the subject, but after looking at what they offer and the work they do, I would say that they were nowhere near what a training programme should be.

What are your plans for the future?

We are developing a training course, but right now the main limitation is time. We are focused on the clients and the application side for now. We are doing some training for corporates, but we will come up will a certification programme soon.


How the Sensex is calculated

How the Sensex is calculated
Sharat Chandran, Commodity Online

For the premier Bombay Stock Exchange that pioneered the stock broking activity in India, 128 years of experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons became members of what today is called The Stock Exchange, Mumbai by paying a princely amount of Re 1.

Since then, the country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

Sensex is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, Sensex is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies.

The base year of Sensex is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float methodology. (See below: Explanation with an example)

Due to is wide acceptance amongst the Indian investors; Sensex is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time (From 1979 onwards). Small wonder, the Sensex has over the years become one of the most prominent brands in the country.

The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The Sensex captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through Sensex.

Sensex Calculation Methodology

Sensex is calculated using the "Free-float Market Capitalization" methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.

The base period of Sensex is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of Sensex involves dividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor.

The Divisor is the only link to the original base period value of the Sensex. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate Sensex every 15 seconds and disseminated in real time.


BSE also calculates a dollar-linked version of Sensex and historical values of this index are available since its inception.

Understanding Free-float Methodology

Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalisation of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market.

It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares in the market.

In India, BSE pioneered the concept of Free-float by launching BSE TECk in July 2001 and Bankex in June 2003. While BSE TECk Index is a TMT benchmark, Bankex is positioned as a benchmark for the banking sector stocks. Sensex becomes the third index in India to be based on the globally accepted Free-float Methodology.

Example (provided by reader Munish Oberoi):

Suppose the Index consists of only 2 stocks: Stock A and Stock B.

Suppose company A has 1,000 shares in total, of which 200 are held by the promoters, so that only 800 shares are available for trading to the general public. These 800 shares are the so-called 'free-floating' shares.

Similarly, company B has 2,000 shares in total, of which 1,000 are held by the promoters and the rest 1,000 are free-floating.

Now suppose the current market price of stock A is Rs 120. Thus, the 'total' market capitalisation of company A is Rs 120,000 (1,000 x 120), but its free-float market capitalisation is Rs 96,000 (800 x 120).

Similarly, suppose the current market price of stock B is Rs 200. The total market capitalisation of company B will thus be Rs 400,000 (2,000 x 200), but its free-float market cap is only Rs 200,000 (1,000 x 200).

So as of today the market capitalisation of the index (i.e. stocks A and B) is Rs 520,000 (Rs 120,000 + Rs 400,000); while the free-float market capitalisation of the index is Rs 296,000. (Rs 96,000 + Rs 200,000).

The year 1978-79 is considered the base year of the index with a value set to 100. What this means is that suppose at that time the market capitalisation of the stocks that comprised the index then was, say, 60,000 (remember at that time there may have been some other stocks in the index, not A and B, but that does not matter), then we assume that an index market cap of 60,000 is equal to an index-value of 100.

Thus the value of the index today is = 296,000 x 100/60,000 = 493.33

This is how the Sensex is calculated.

The factor 100/60000 is called index divisor.

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