Why invest in SBI EQUITY
Improving macro indicators leading to better economic growth prospects and improved market sentiments.
Stable government with clearly articulated policy framework and pro-growth approach will lead to enhanced economic activity in India.
Potential opportunities arising from structural trends like home improvement, e-commerce, imports substitution & manufacturing exports, defense, education etc.
Robust stock selection process, tested in various market conditions has potential to identify growth stocks at reasonable valuations.
Opportunities across market capitalization with bias towards mid and small caps to generate value for investors in next 3 years.
This product is suitable for investors who are seeking*:
1-Long term investment.
2-A close ended equity fund that aims to generate capital appreciation.
3- High risk.
For more information please visit:- http://www.rrfinance.com/Maillers/sbi_24_nov.html
A Fixed maturity Plan (FMP) is a closed-ended debt scheme for a fixed period of time, wherein the duration of debt papers is aligned with the tenure of the scheme.
Features of FMPs
- FMPs generally invest in Certificate of deposits (CDs), Commercial Papers (CPs), money market instruments, and corporate bonds.
- FMPs provide predictable return & are not subject to interest rate risk.
- On tax adjusted basis, return on FMPs are better than bank FDs, as 3 years Plus FMPs qualifies LTCG Tax.
Mutual fund investors have the option of paying Long term capital gains tax at 20.6% with or without Indexation.
Tax Advantages of FMP
Fixed Maturity Plans scores high on tax advantage when they are compared to similar instruments like
Fixed Deposits (FDs). In FDs the interest earned is added to the investor’s income and taxed at individual personal income tax rate. Interest from Fixed Deposits is categorized as ‘Income from Other Sources’ under the Income Tax laws. In the case of FMP, the tax implication depends upon the investment option chosen – Dividend or Growth
Which Option Should You Choose?
- Dividend Option: Dividends in FMPs are tax free in hands of investors. However, Mutual Fund companies have to pay a Dividend Distribution Tax (DDT) of 25% plus surcharge and cess for Individuals and HUFs (28.325%) and 30% plus surcharge and cess for others (33.99%) before distributing it to investors.
- Growth Option: If any investor opts for Growth option, he is subject to Capital Gains Tax.
- Short Term Capital Gains (if units are held for 36 months or less) are taxed as per the Tax Slab Rate.
For Long Term Capital Gains (if units are held for more than 36 months) are taxed at 20% with indexation. The indexation benefit inflates the cost of purchase lowering long term gains tax liability, which is not in the case of FDs.
The length of the holding period matters, especially when one has to decide between growth and dividend options. Investors can go for the growth option if the holding period is more than three year and for the dividend option if the holding period is less than three year.
For more information please visit:- http://rrfinance.com/Mutual%20Fund/Mutual_Fund_Home.aspx
- Over FY05-09, annual equity inflow from households was 5% of incremental savings. Even if we assume half of if it now (as the incentives for mutual funds no longer exist) it translates into $10 billion of retail equity inflows every year.
- Indian households have sold nearly $8 billion (about Rs 48,000 crore) of equities in the last five years and equity exposure to total household assets is just 2%, which is among the lowest ever. Retail investors have been largely shifting their holding towards physical assets from the financial assets.
- Investments of retail investors in equities have been coming down from Sep ‘12 and in spite the market rising sharply in the last six months there is no rise of retail participation in equities.
- Retail investors are still either redeeming equity mutual funds or are switching to debt at current levels. Reportedly stock brokers are seeing net selling of direct equity holdings by retail investors. The rise in markets despite the above is a clear indication that FIIs, FIs, and large investors are buying at current levels.
- With fall in inflation, real interest rates have turned positive and are expected to remain so in medium to long term. It will lead to higher financial savings by households and more investible funds.
There is a very strong contrarian indicator and it strengthens the view of medium term upward move in the markets. We recommend retail investors to increase their allocation in Equity Mutual Funds (based on their risk profile) for medium to long term appreciation at these levels.
India’s Gross Domestic Product (GDP) grew at a slower than expected rate of 4.4% for the first quarter of the current financial year. The economy grew at the slowest quarterly rate since the global financial crisis. The growth was contracted by a contraction in mining and manufacturing. The agricultural sector of the economy grew at 2.7% versus 1.7% QoQ. Manufacturing sector growth contracted at (-) 1.2%. While the trade and hotels growth cue in at 3.9% versus 6.2% QoQ, the construction sector grew at 2.8% versus 4.4% QoQ. Electricity & gas sector grew at 3.7% versus 2.8% QoQ. Mining sector growth contracted at (-) 2.8% versus (-) 3.1 QoQ.
The Indian economy has been steadily losing momentum in recent years. Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March — the lowest level in a decade. The industrial sector contracted in the first quarter, the 1.1% fall in the index of industrial production showed. The decline in the purchasing managers’ index for services in the first quarter indicates a widening of the slowdown to services sector that expanded 6.5% last year.
Weekly Technical View
The week gone by saw the USD/INR pair continuing to surge higher. The rise seen this week was the highest seen in recent times as the pair touched new life highs. Technical indicators are reflecting the positive price action as the pair trades above the 13-day SMA and momentum readings like the 14 -day RSI are climbing higher. We recommend using any weakness to enter into longs.
Weekly Technical View
The week gone by saw the EUR/INR pair continuing to surge higher. The rise seen this week was the highest seen in recent times as the pair touched new life highs. The pair has also broken above the upper band of the 20-day Bollinger Bands, which is another bullish signal for the pair. We recommend using any weakness to enter into longs.
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Cutaway illustration of a fuel cell car (Photo credit: Wikipedia)
Tata Motors in association with Indian Space Research Organization (ISRO) has developed a Hydrogen-powered automobile bus after several years of research. It’s a CNG-type bus. Hydrogen in bottles at high pressure is stored at the top of the bus and there would be zero pollution. The fuel cell technology makes it a clean and silent bus on-road.
An ISRO team had generated technical specifications for all the elements and general specifications for the bus. ISRO and Tata Motors entered into a MoU in 2006 to design and develop an automobile bus using hydrogen as a fuel through fuel cell route. The company has successfully completed design and development of Fuel Cell Power System (FCPS) for bus application starting from 20Kw to 120Kw with co-operation of ISRO.
For more information about Fuel Cell Power System Visit:- http://en.wikipedia.org/wiki/Fuel_cell
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