Financial Analyst

How you avoid Credit card Bill.

2010-11-11T23:00:00.000-08:00

Credit card used to pay each and every bill of everyday.You can pay your utility bill to flight ticket charge and your shopping bill.Credit limit decided on the basis of your credit rating and the credit rating judge by the financial institution according to your income your financial condition.If you have good credit rating than you can also able to apply for the unsecured credit card.Unsecured credit card is convenient for the people ,those have huge expenses ,and it is not possible to carry cash each and every time or it can be beneficial when you need to travel out of your home town for your job and business on this time unsecured credit card help you a lot.There is also demerits of unsecured card is that some time you cann’t control your expenses which will create financial burden on you.

Interest on some credit card high and for some credit card interest rate is zero. So when you go for credit card from your bank or any financial institution ,it is better that you can checkout all the detail available in the market, which help you to save your money.

Secure credit card is one where you need to deposit security amount and as per your security amount your credit limit is decided. Secure credit card help you to build your credit rating .Each and every credit card company report to the credit bureau for your payment status which help to build your credit rating .

Credit card debt is create a financial burden on you and if you use more than your credit limit ,you need to pay penalty fees on that, not only that if you forget to pay your bill on time than you need to pay interest on the due amount, which is also create a unnecessary burden on you.

You can easily avoid the unnecessary charges on credit card debt by preparing budget and avoiding the unnecessary expenses, use cash to every day shopping.

East Asia develop as tourism hub

2010-10-29T00:03:00.000-07:00

Everywhere there was panic of financial crisis in Eastern Asia South Korea, Japan to Philippines were the major tourism country affected by the global financial crisis. One of the biggest tourism markets is Philippines; many tourists from South Korea come to that place. But this year rate declined by 9.4 %.. China contribution to the to the Philippines tourism industry is nearly about 15 %.

Global crisis is the main reason for the decline of the tourist inflow which leads to the several damped consumer sentiments leading to the reduction in the tourism. Japan and South Korea are the top markets that represent from were maximum number of tourist arrive to Philippines. Hotel, travel and other industry comprises are the part of Hospitality industry are the most expensive industry of compare to other industry in Asia.

It is very tough phase for Filipino tourism industry as foreign tourist arrives dropped admits unfavorable business condition. As the hotel prices are relatively higher in the Philippines than other Asian countries, the government should encourage construction of new hotels and other tourism-related establishments. Construction of new hotels will spur price competition and increase the availability of rooms, which, in turn, will push the foreign tourist arrivals in the country.”

South East Asia which include India, Pakistan, Nepal and Bhutan. India is now become the largest foreign tourist destination but Indian tourism industry is also affected by terrorism, undeveloped infrastructure facility. Nepal and Bhutan is also not getting the importance among the foreign tourist.

India has big advantage of large number of efficient doctor, surgeon and world class medical facility, and most important is that cost of medical expenses is comes one third in compare to US and any European countries. So, different patients from all part of the world come to India .Indian Govt. also develop different infrastructure facility to become one of the important medical tourism destinations in the world.

China and Thailand are two big competitors in the same field. China has good number of physician but there is not world class facility available second Chinese are not able to speak English as fluently like Indian .Thailand has all the option to attract the new medical tourist.

How big is the sukuki bond market and what are their advantage

2010-10-09T03:33:00.000-07:00

The market for sukuk is estimated at $85bn at year2007. The market is divided into two broad categories; on the one hand, global sukuk(which are listed on global markets and usually denominated in international currency, mainly the US dollar), and on the other hand , local or domestic sukuk(which are issued by Muslim issuers on their respective domestic markets, and are denominated in local currencies).

Listed sukuk represent roughly one-third of total sukuk outstanding, or $30 bn. We, at S&P, do rate sukuk for an outstanding, amount at mid-year 2007 in excess of $12 bn, or 30% of listed sukuk.

For issuers of sukuk , one advantage is to have access to alternative sources of funding, while diversifying funding sources. Given the wider appetite for these assets-based (and sometimes assets-backed) securities, issuers a can broaden their investors more inclined to comply with religious rules. Finally, sukuk have upside value embedded in them , reflecting the very begin economic environments from which sukuk are issued, mainly the Gulf region and south East Asia, both growing very fast and where the outlook is positive.

Capitalization in the sukuk market has been substantially increasing over the last seven years. The sukuk market has increasingly grown exponentially since 2000 with an average growth of approximately 805 per annum. It grew at a slower rate in the beginning, but suddenly accelerated in 2003. Initially, the market was limited to the domain of sovereign issues; however, realizing its vast potential , a number of corporation in the Middle East as well as Asia have started to take opportunity.In 2000, there were only three three corporate sukuk worth almost $5.7bn; and in 2006, the figure substantially grew to exceed $27 bn.

The global sukuk market continued its rapid growth in the first half of 2007, edging up 75.1% YoY while the international sukuk market expanded by 83..3%YoY. The first semester of 2007 also saw sovereign sukuk issues rise to total of $4.4 bn as compared the corporate sukuk had risen to a total of $20 bn. In term of currency, as at the end of june 2007, Malaysia ringgit-denominated sukuk represented 70% or $17.2 bn of the total sukuk being issued globally.

In line with the development of Shari’ah banking, the Islamic capital market in Indonesia is also on the rise. The growth of Shari’ah bond issues. Till now, 17 Indonesian corporations have issued Shari’ah bonds woth almost IDR2,209.4bn ($245.5 mn), with two types of Shari’ah bond so far, namely Ijarah, accounting for 63% (IDR 1,394.4 bn) ($155 mn) and Mudharabah for 37% (IDR 815 bn) ($90.5 mn).

Interest free debt consolidation

2010-09-30T22:40:00.000-07:00

In the finance market there is lots of changes comes up after globalization. As every country think to reduce there import duty to actualize the open economy process. In the financial market too banks and the govt. of every country want to reduce there interest rate near to zero. In some countries bank are already reduce their interest to zero. As per Islamic finance and sariah rule interest is strictly prohibited .That means the whole world financial market try to adopt the same think tank as Islamic finance, which they apply from last hundred of years.

In Islamic finance debt, mortgage, investment and debt consolidation all applicable if they follow the sariah rules and regulation. In Islamic law interest is strictly prohibited, but you can help other with debt, or be able to take debt if its interest free. Interest free Debt Consolidation Company, lender of debt or mortgage issuer can charge a specific fix amount as installment and they fix the installment with their rent.Interest free debt consolidation company can fix the monthly or quaterly payment for there coustomer and there commission charges also include on the installment amount this will help to the customer to get out of the unnecessary burden with change in interest rate in the market.Interest free debt and mortgage also has the same benefits.

Few years ago all the investor from Middle east invest their income from petroleum export in US bonds , and they leave there interest they just get the profit of increased value of the US bonds.

These will beneficial for US bonds issuer too. When the US dollar market value reduces after gulf war, the Middle east investor change their mood of investment and they shift their investment from US dollar bond to other courtiers bonds. On the mean time innovation of the sukuk is give a lot of help to the middle east investor .UK is the first country want to develop their market as a sukuk hub to get the middle east investors money and on the mean time rise of Euro also helps a lot. Japan , Singapore and China are some of the big name from Asia run on the same path. Malasia become the largest sukuk bond market in the word after the innovation of sukuk but there is great competition from Singapore, Japan and China.

Bigger prospect of sukuk

2010-09-25T00:26:00.000-07:00

Despite the stupendous rise in terms of volume, the Islamic bond market is just like the tip of the iceberg in comparison to the overall global bond market. The development which has taken place so far has mainly been driven by economic and political factors. The so-called a war on terrorism in the aftermath of the September 11, 2001 attacks on the World Trade Centre has helped immensely to instill a sense of Islamic identity across the Muslim world, prompting many more to seek ways of expressing their religious convictions. Adding to this, further are the strengthening oil prices which have fueled an unprecedented economic boom in the Middle East.

To capitalize on the new-found interest among investors across the globe,issures are placing greater thrust now on innovation in an effort to cater to different classes of both buyers as well as investors. This has seen players-structuring and development of new products and services which are Shariah-compliant. For instance, experimental ideas are emerging in product and infrastructure finance, apart from sukuk. The most visible sign of this innovation is seen in retail products, such as Islamic mortgages. And the next focus for innovation in retail products will be the Islamic credit cards, or the creation of quasi overdraft facilities (based on a concept known as tawarruq). Experimental ideas are now also emerging in product and infrastructure finance, aside from sukuk. Private equity is showing intense interest too, as is the so-called diminishing musharaka (sharing) structure, which produces an effect akin to the amortization of a loan. However the field which is arguably attracting the most brainpower is derivatives and structures finance. But, concepts such as derivatives and hedge funds, for example, are considered particularly controversial, given the Qurans ban on gharar (speculation). Nevertheless, these criticisms are certainly not inhibiting the development of new ideas at present. On the contrary, most observers believe that product proliferation will further intensify this year.

Islamic Debt bond Market

2010-09-16T00:10:00.000-07:00

Debt and interest on debt is strictly restricted in the Islamic countries. Free debt help is allowable without taking any interest ,or these can be treat as help to someone without intention to get interest from the lending person. As per Quran taking interest or paying interest on debt or loan is against the sariah law. So the bond investment is not popular among Muslim. Most of the petroleum exporting countries are investing there surplus amount in the US free debt help bonds and they not taken interest on the investing amount, these is beneficial for the US and also helpful for these country to protect their religious value. Sukuk which is plural form of sakk is come into existence to fulfill Muslim believe which is also a same thing as free debt help bond where there is no interest is calculated on invested amount of bond. There is no interest is calculated on the bond value.
Sukuk bond market demand continue rising after its arrival. The main reason behind the increase in the sukuk demand is devaluation of market value of the dollar and recession in US economy.
Most of the petroleum exporting country are investing there surplus in US bond market but after 2000 when the US dollar market value continue depreciated and the US economy faces lots of problem and there is continue rising of the US fiscal debt than there is a big problem arises for the OPEC investor and they think that they loss there reserve market value.
Euro would give another option to the investor, but euro unable to become the close competitor of the US dollar.
Islamic finance today is led predominantly by sukuk(plural of sak) bonds; sukuk is an Arabic word which means “certificates.” In its simplest form, sukuk are analogous to assets-backed securities which provide an investor ownership right of an investor ownership right of an assets. The most important criteria for the issuance of sukuk are the existence of the underlying assets on the balance sheet of the issuing entity, which distinguishes sukuk from conventional bonds. Unlike the conventional bond, which is a contract debt obligation entitling the holder to receive interest as well as principals on specified dates, a sukuk holder enjoys proportionate share in the revenues generated by the sukuk assets as in the proceeds of the realization of the underlying assets. Another distinguishing feature of a sukuk is that in cases where certificates represent a debt to the holder, such certificates will not be trade-able in the secondary market and instead is held till the maturity period or sold at par. Moreover, adherence to strict Shari’ah rule, which prohibits speculation, prevents Islamic investors from using conventional hedging tools such as interest rate swaps, forwards or options to offset fluctuations in interest rate and currencies. In last couple of years, the Islamic bond market has undergone huge expansion, partly boosted by the oil-driven financial liquidity in the Gulf and the rapidly growing number of Muslims seeking more religiously-sanctioned products. However, the western world too has begun several banks
Insurance and pension funds, particularly from Europe, entering the fray, with the aim to tap the boom in the Gulf economies led by soaring profits on the back of strong oil prices during the past five years.

Credit Repair after bankruptcy

2010-09-09T23:02:00.000-07:00

Repair Credit after bankruptcy is hard but it can be done.You need to create a good transaction history to apply for the credit card.Try to avoid bankruptcy because its badly affect on your credit score, but it don't mean you can loss everything after bankruptcy.
Try to avoid unnecessary expenses or postpone the unwanted expenses for future.Try to use cash for most of the transaction.First you can prepare the monthly budget for your income and expenses this help you to get the actual picture of your financial condition.

You can apply for the secured credit card where you need to deposit a specific amount with the issuing company as a guarantee deposit.This deposit is work as your credit limit.
This guarantee money is refunded when you make a good transaction history with the bank.

Its very easy to get the personal loan or car loan and the installment payment for your loan is also measure for your credit history.If you have made all your installment payment on time than this will go in your favor.

You can apply for store card, this is the secure credit card. Getting the unsecured credit card is the last step.
If you can create a good credit history by paying all you installment on time and there is no default history than you can apply for the unsecured credit card. If you rejected than apply on next half of the financial period.

These are the steps for repair credit after bankruptcy, but if you control your unwanted expenses than sure you don't need to face the problem of bankruptcy.
Future financial condition is not predecide but at least you need to make proper arrangement that if there is any adverse condition arises tan what is your backup support o get out of the financial crunch.

Many time people select the the big installment option for payment of there loan and try to come out of the debt as soon as possible, but when they select the big installment option they donâ€™t assume there future uncertain financial condition. Suppose your monthly income is $20000 and your mortgage installment is $10000 and due to some reason there is medical bill come $ 50000 ,or you got married or you become a father than your monthly expenses increases and you cannot be able to afford the huge installment payment. This is better than you can fix your installment 40% of your income to avoid these circumstances.

You made all your A to Z expenses with card so, you made a huge expenses on different payment.Try to avoid unwanted expenses or make the cash payment when there is small transaction and always try to use your resource by planned manner. Budget is the best way to control your unwanted expenses.

Russian Economy dependence reduce on petroleum

2010-09-01T04:29:00.000-07:00

The investment climate in Russia has improved after the government’s efforts to attract private investors. The country has been witnessing several high-profile development deals with western companies. The first global beyond fund in Moscow is Texas Pacific Group (TPG). Others include IKEA, the Swedish furniture retailer, Wrigley, the American chewing gum maker and Wal-Mart. Western firms are also attracted to the consumer boom in Russia. On the other hand, domestic firms are also rising hefty sums for investing in the domestic markets. Overall, Russian firms raised $2.75bn through stock offering in 2006 .However industry expert says that the domestic growth in many sectors is possible only if there is an influx of cash from its primary resource industries and rapidly increasing service industries.

The banking sector is dominated by the state-owned players Sberbank and VTB. Experts opine that the Russian government’s banking model is required to be a mixed banking model is required with dominant role for several state-owned banks competing with strong private and foreign banks. Ideally, In the coming days, There may be some consolidations or tie-ups with strong private and foreign banks. The recently reported Russia-based Ros bank and France’s Societe generale merger is in the right direction. So far, the largest M&A deals are in oil and gas, metals and mining industries. Although, the FDI in Russia is still much lower, It is ahead of Japan and Canada.

Russia may achieve dynamic economy status as the country is slowly moving away from oil dependency. Besides, the recent entry of Russia in the WTO may attract more foreign competitors to the Russian market. However, much depends on the public and the private sectors to effectively act as intermediaries for the demand and supply to determine the shape of Russia’s medium term future, economically and politically. To join the world as a competitive partner, Russia should capitalize on its resources and boost its economic development. However, global experience reveals that natural resources may turn out to be a curse, rather than a blessing. More ever, the increasing corruption level may hamper Russia’s economic diversification. Adnan Vatansever, Associate Fellow at the Institute for the Analysis of Global security (IAGS) warns, “Undoubtedly, Russia has emerged as one of the world’s primary energy suppliers today. Its increasing reliance on natural resources, however, raises questions essential for Russia’s future evolution as well as its international role.

Cadbury Schweppes.................... Beverages on Block

2010-08-27T20:11:00.000-07:00

On June 19, 2007, Cadbury Schweppes, the world’s largest confectionery company and the makers of popular Dairy Milk chocolate,in a significant yet surprising development, announced its decision to separate its American confectionery and beverage businesses to concentrate more on it confectionery business. The move assumes significance as earlier, in March 2007, the confectionery major had stated that it would either sell or demerger its Americas Beverages, which owns brands such as Dr Pepper,7Up,Sunkist, Snapple, and Hawaiian Punch. However, executives at the London-headquartered firm stressed that it was not a surprise move as the confectionery giant-as stated by Ken Hanna, Cadbury Schweppes’ CFO – had “been working on the possible separation of beverage for at least a couple of years”. Such explanations in the media by some investors that the British giant might itself be up for sale. Some investors even speculated that Cadbury’s decision might have been influenced by the US activist investor, Nelson Pletz, who recently acquired close to 3% stake in the British major.

The transport and General Workers’ Union (T&G), which has some 2,000 of Cadbury’s 3,500 UK workforce as its members, has expressed concern about Pletz’s intentions.”Cadbury is iconic British brand and a very successful company which does not need the attention of Pletz”, said Brain Revell, T&G National Organizer for food and agriculture. He termed Pletz’s intervention in Heniz as “a ruthless pursuit of profit for share holder”.He added, “Cadbury, with its Quaker background, has been an enormous success for all its stakeholders and shareholders as well as its workforce.

Japanese real estate boom or a bubble

2010-08-19T22:53:00.001-07:00

The US sub prime crisis in several ways is reminiscent of the property bubble that took place in Japan in the 1980s. The two events, though separated by almost about two decades, share several striking similarities. Both bubbles were inflated by heavy speculation which, in turn, was fueled by a combination of easy availability of finance and an explosion in new, complex financial products. At its dizzying height, property prices in Tokyo’s Imperial Palace valued more than the entire land in Florida. During the 1980s, Japan’s economy experienced rapid surge in asset prices, increase in money supply and credit, and an expansion of economic activity. What further led to the emergence and expansion of bubble were factors like protracted monetary easing, taxation and regulation biased toward accelerating the rise in land prices, progress of financial deregulation and aggressive behavior of financial institution. During the bubble period , Japan implemented policies that facilitated easy credit Japan and organized large trades through loans from banks. The most famous economic bubble lasted from 1986 to 1990 and it has taken Japan over a decade now it recover from that crisis, although banks are still grapping to clean their balance sheets while land prices are on a journey down south.

While such atrocious valuations may be missing from the US real estate scene, the fact is that the US housing prices kept pace with and even outpaced inflation consistently till 2005.

Between 2000 and 2005, the housing pieces in the US leapt up from about 5% to close to triple the digit. The mortgage lenders dearly with many of them, including Citigroup and Merrill Lynch, writing off billions of dollar question is there any lesson to be drawn from the Japanese assets bubble?

China become the largest technology exporter of the world

2010-08-13T21:48:00.000-07:00

China was once viewed by the world a manufacturer of low quality and low priced products such as toys, apparel and textiles. However ,this perception is no longer valid.

It is rapidly emerging as a world class producer of advanced technology products, including semiconductors, fiber optics, pharmaceutical, etc. China’s incredible economic growth has been achieved mostly by its trade and export supremacy. Low manufacturing costs, abundant technically-skilled labor and thriving consumer market have pushed China towards becoming a global manufacturing hub.Its ‘global path’ has stretched significantly. It is now the world’s largest producer of the mobile phone,PCs,and cameras.The huge domestic market is attracting mammonth hi-tech firms worldwide,which have found a ninch in China. The country is in the process of becoming a technology superpower soon.For instance,though a meager 8% of Chinese have access to the internate , this equates 100 million people online, second only to the US. China replaced America as the world largest technology exporter.

Nonetheless, China has long way to go before it could catch up with the US on the technology front. The gap between both the countries in terms of progress in high-technology. The dragon is slowly gearing upto challenge the American dominance in the technology world.The main problem with the Chinese electronic sector is that most of the branded producer facing the problem from duplicate items with low quality.Suppose a black berry device which is a branded company provide new feature and gadget in there new model,the feature model with same name available in China with low prices,this will hamper goodwill of the company.

Food prices vs biofuel

2010-08-05T23:03:00.000-07:00

The food prices across the globe hit a record high,and show the signs that they will go on rising this year too as well as in future .In fact ,expert are says that year of cheap food over and the world economy has get used to it .The reason behind the spurt in food prices is certainly not bad harvest,but turning too many foodgrain into fuel.More over the increasing in demand of the biomass energy is also diverting agricultural production away from food crops,leading to mass starvation in poor countries.
The skyrocketing oil prices are driving the demand for biofuels. The increasing demand of biofuels indicate that the prices of the basic staples food such as corn is no longer based on its requirement as a food ,but also a fuel.Accordingly the food market is under going a major change,and there is an unexpected rise in the prices of food grain such as wheat,corn,maize and soybeans around the world.

Biofuels are commercial crops and here the return are much higher than the tradition food crops.
Regular cultivation of the food grain also reduce the productivity of the field so production of the biofuels also help to get achieve the recycle of the food grains.

Western countries are highest suppliers of food grain the world market.Canada,US and Australia are the main source.Asian countries produce huge food grain but most part of the production consumed by themselves.So, very low portion go to the world market which not affect the world trade of the food grain.
It is the problem for all countries so it is important to think on this to get the solution.

Bike Insurance basic point

2010-07-31T03:16:00.000-07:00

Every teenager or youth generation has passion to ride bike.Bike is not comfortable as like car but the passion and style is always place its importance above the car and also the bike is less costly than car.

Bike or motorcycle insurance dependent on some factor:

Age Group : Insurance company charge lowest insurance premium from older and charge high rate of premium from lower age group ,but if you are new rider your charge might be higher.

Geographical Location : City and traffic jam area has higher risk of accident therefore the insurance premium charge is higher here on the other hand the suburban area or low trafiic jam area has low insurance premium charge there.

Bike Technology : Highly improved and technical efficient bike are less chance of accident therefore Insurance premium is low for these bike user.

Previous record of the Bike user : Previous driving record also impact on the current charge of the insurance rate if you first time buy a bike than the previous car driving record measure.

Home Address : If your house located in high crime jone where most of time bike stolen than generally the insurance premium is high there.

Your profession : Your profession is also matter on the insurance premium suppose you have a building contractor or real state agent than the chance of your bike damage is high when you parked at under construction site .

When you go for bike insurance than remember one thing that the insurance company paid the market value of the damage bike so if you take high insurance to get high cover than you may be in loss.

Life insurance minimize risk of sudden death

2010-07-22T04:01:00.000-07:00

Death of the sole earner is arising the financial risk for the family member. Suppose the Mr. .x has four members in his family, and Mr. X’s spouse and two children are totally depending on him. Mr. X monthly income is $10000 in a month but due to sudden death of the Mr. arise financial problem in front of the family member to survive, Insurance is help in this situation.

Life Insurance Company indemnifies a large sum amount to the family member which help to the family for the children education also help to survive.

Life insurance not only paid on death of the policy holder but also when the policy holder reaches a estimated age.

Insurance is the risk which insurer bear and indemnify to the policy holder or the beneficiary in case of death of the policy holder or the when the policy holder age reached as mention in the deed of the insurance.

Life insurance is not come under the category as like other insurance .As in the other insurance the insurance company paid to the policy holder actual loss arises by any loss but in life insurance there is no question arise for the actual or partial loss.

Life insurance is also contract of good faith that means the policy holder need to disclose all the heath related issue to the insurer or need to submit the medical certificate before the insurance company before apply for the life insurance.

Life insurance policy becomes void if the policy holder committed suicide, or the nominee kill the policy holder to get the policy amount.

In life insurance the policyholder is not actually the sole gainer of the risk arises ,only the family member get the advantage of the insurance policy.

Basic Step for Auto Insurance

2010-07-16T02:05:00.000-07:00

Auto Insurance is insurance for car, two-wheeler and three wheeler the main segment is car insurance. Auto insurance is also work as a hedge tool to protect your first investment in the automobile or car .Suppose anyone buy his or her first car and it mate with accident in first ride than the owner loss all his\her investment in a day. Auto insurance is helps to hedge the auto investment by indemnify the loss arises by the accident.

Auto insurance is also indemnifying the accidental coverage to the insurer which also gives some extra advantage to the insurer.

The main coverage area under the auto insurance comes as:

1. Coverage for the loss of vehicle: Insurance Company indemnifies value of the vehicle which insured.

2. Accidental coverage to the Insurer: Auto insurance company paid accidental claim to the insurer, claim amount depend on the basis of terms and condition.

3. Coverage the loss arises to the third party: Insurance Company paid the loss to the third party arises by the accident.

Insurance company can’t fulfill the coverage on certain Scenario:

1. Violation of rules and regulation: If the car driven by the minor age and they don’t have valid license.

2. Violation of traffic rules and regulation: If the insurer drive car after taking alcohol.

3. Not disclosed all the material fact of the insured property: Suppose the insurer use the stolen car in that condition also the insurance company not indemnify the loss arises by the accident.

4. If the insurer intentionally met with accident: If the insurer intentionally met with the accident, or damage his car than the insurance company not indemnify the loss arises to the insurer.

Home Loan charges reduce by the PSU Bank

2010-07-10T01:38:00.000-07:00

Home Loan is available with low interest rate from Public sector bank with high number of EMI incomparability to private banks.
Public back are supported by the central bank of the country therefore they are able to go into the market with low interest rate with generally more number of EMI than private banks. We are not go with its long term affect on the Economy of the country because definitely these will create some pressure on the economy and arise the fiscal deficit.
The home loan taker is the prime advantage gainer of the plan, and the govt. Employee is the main target for this loan.
Private bank are also follow these strategy in long-term to protect their existing market.
Personal home is the dream of every individual, and the bank provides the chance to materialize the dream.
To buy a home huge amount required and for an employee or middle class people ,it can’t be possible to arrange such a large some money on the primary stage of their career but the house or the property value will increases and at the middle age or at the last part of their service period if they invest their large some of total life reserve for home than its create the financial crises for the future .
Therefore home loan gives one option to pay the loan amount from the monthly salary and it’s only the 40% of the total income and only in 20 years the employee are able to pay the total amount to the bank.
When you go for the human loan than you need to check all the rules and terms of the bank before apply for the loan.

Insurance is Hedge tool to uncertain risk

2010-07-02T03:42:00.000-07:00

Insurance is agreement between the insurance company and the insurance holder, to protect the insurance holder from uncertain risk.
Insurance is also a hedge tool to protect the interest of the people. Insurance company charges premium on the holder on monthly or yearly basis. Now a day’s all movable and immovable goods comes in the criteria of insurance. One more thing need to consider that Insurance Company compensates only the loss portion, or the percentage insured.

Some basic steps:

1] Low Premium rate: Insurance premium vary with different insurance provider, so it’s better to check the market and go for the lowest premium rate available in the market.

2] Good liquidation position: Insurance is the hedge tool to protect from uncertain financial risk, so it’s good to go with that company which has financially strong in the market; means go with the company which has good liquidity position.

3] Disclose all the material facts of the insured item : Insurance company always mention in there rules and condition documents that in some circumstances they not pay the loss to the insurance taker, so always disclose all the material facts to the insurance company to become on the safe side.

4] complain to the regulatory board in case of fraud: If the insurance company not pays the damage or delay the payment than make the complain for this to the regulatory board of that country.

5] Insurance coverage: Insurance company paid only the risk which is insured, so its make sure before take any policy that how much risk is bearable.

6]There is interest on the insured property : Insurance holder need to prove that he has the interest on the insured property and any damage of the property affect the insurance holder financially.

Precaution steps for Home Loan

2010-06-18T20:28:00.000-07:00

Home Loans are available by nationalized and private banks more easily than before .EMI on the home loans reduce than before and the loan refund time frame increase than before.
But this one is not only beneficial from point of view of debtors but also from the point of view of banks as banks get high-income.
As the interest rate reduce in the market therefore banks concentrate more on capital return than the interest rate return.
From the debtor point of view also get the benefits of the low EMI and long period to return debt which reduce the burden on the debtor.

There are some precaution need to measure before apply for the home loans from any banks.
1. Terms and Conditions: The whole terms and condition need to check before apply for the home loan.
Check that If there is any hidden charge on the loan.

2.Check the lowest interest rate : Check the lowest interest rate available in the market normally the interest rate are more or less fix, but its differ from bank to bank .As the 1% change is also a big matter .

3. EMI Amount: Emi generally charged 40% of the net disposal income as per the rule. As the future is uncertain it’s better to reduce the EMI 15% of the disposable income ,and save the certain amount as reserve.

4. Future Plan: People generally increase their EMI amount for the future as they think there total income increases in future .It’s true that after 5 years the total income of anyone more than the present income ,but on the same time there expenditure also increases with the time ,so its better t to keep the EMI in the same formate than to increases in future.

Related Info :
Buildings and Contents Insurance : Over 50? Save money with the UK’s specialist over 50s home insurance provider.

Dollar becomes world currency and the large part of the foreign trade made in us dollar.

2010-06-07T03:14:00.001-07:00

US dollar come into existence in the world market after the world war 2 .After the second world war most of industrial countries of Europe and Asia suffered a lot .Only the US industries has get the advantage of the huge demands of industrial goods between the second world war and after the second world war .US dollar is not become the world currency due this reason only.
Petroleum was playing the crucial role to get this advantage to the dollar.
USA is the highest energy consumer in the world after the Second World War and the 60% of the total consumption comes from import. It’s the US strategy which convinces the OPEC cartel to sell their petroleum in US dollar. Other countries need to sell their goods or sell their gold to get the dollar on the other hand US don’t need to sell their goods or to sell the gold.
US has to spent a lot to maintain the Army bases in the different part of the world ,spent a large portion of their GDP in the war ,but still the dollar value continue raising in the world there is some reason behind these .Petroleum play the main role and second one that all the OPEC countries are again deposited in the US or invest to purchase the US bonds ,these help a lot to get the US dollar a strong position in the world market.
US dollar close competitor is Euro .Euro comes in the world market after 1990.Euro is provide the new weapon to the European countries to fight against the US dollar supremacy in the world market .
US war against terror and Iraq, Iran and Middle East and Afghanistan war reduce the US influence in the Arabic countries and they are think to change their old pattern to invest in the US security market. It’s true that Euro work as competitor to the US dollar but still the US dollar is only currency used for petroleum trading.
So in near future there is very little chance that Euro get superiority over the US dollar in the Global market.

Basic criteria for valuing a financial institution

2010-06-03T03:24:00.000-07:00

Financial Institution main business raise money from the public and lend this in the market ,Interest on the lending is the prime source of earning and the interest on deposited is the main expenditure .Now the whole ability of the management governed how the institute collect money from general public at low rate .
Basic criteria a financial analyst follow for valuing a financial institution as summed up by the CRAMEL model. In this model factors like Capital Adequacy Ratio, Resource raising ability, the quality of assets, the quality of the management, earning quality and leverage are analyzed and conclusion reached.
1.Capital Adequacy ratio: capital consist of assets, again assets divided in high risky and low risky. Risk of the assets increases with the risk of the assets.The ratio of the risk weighted assets of an Financial Institution referred to as Capital Assets Ratio.
2.Resource Raising Ability: Ability of the financial institution measures by their ability of raising fund from market at economic rate, and the fund raiser at short span of time.
3.Assets quality : when the financial institution lend their fund on that time they need to measure the riskiness of the assets .They need to check the credit worthiness of the institution where the fund invested also need to check how the fund used by the lending company and where the investment made by the lending institution.
4.Management Quality: Constitution of the Board of Director. Further the competence, technical expertise and objective of the senior management team, the management system like ALM management, portfolio and risk management and mechanism of the internal audit are also consider.
5.Earning Quality: Financial institution main source of income is the interest on the lending amount. Financial institution need to check that change in the interest rate has any affect on the income of the institution.
6.Liquidity : Liquidity of the Financial Institution effect on the business of the financial institution, keeping this in view its average borrowing tenure is always exceed the average tenure of the investment.
Under this category one may look at debt equity ratio, the interest coverage ratio, the borrowing profile and tenure of the investment.

Indian stock market perform well than Chinese stock market

2010-05-25T02:15:00.000-07:00

China’s growth rate is much greater than India, but its stock market not performing as same as the Indian stock market, there are lots of reason behind this.
1. Lack of Transparency:
In china Govt. has sole control on the all medium of information there for current status of the market not available to the investors, where in India this information available to every investor easily.
2. Socialistic pattern of investment:
It’s true that after 1970 China implemented some policy of open economy but still China is a socialist country and most of the economy depend on the public sector.
3. Violation of the copyright act:
In China the violation of the copyright act is the serious concern, which demotivate the investor as they are not able to protect goodwill of their product in the market.
4. Wrong data presented by the Govt. Agency:
As china is the socialist country true picture of the economy not available in the market therefore the investor are not ready to take the risk of investment in the stock market.
5. Major dependence on the Foreign Company:
In China most of the investment in the manufacturing sector done by the foreign investor .this is also create a problem of heavy dependence on the foreign company.
6. Unequal distribution of the income:
Growth of the Economy in China is not equal in all part of the country. Here poor become poor and rich become richer day by day which create social unrest in the country.
In India large portion of the investment are made by the Private investor here public as well as private investor are made the investment side by side .In India 2/3 of the total market investment made by the Indian industrialist or by the Indian Govt. dependence on the foreign investment is 1/3 of the total.
After Satyam scam the credibility of the Indian stock market reduce among the foreign investor.
Question arises for the credibility of the SEBI, but only the Satyam scam is not the best criteria to judge the performance of the SEBI.

Hedge Fund

2010-05-20T21:58:00.000-07:00

An Aggressive managed portfolio that use advanced I investment strategy to get more return than the general investment are called hedge fund investment .Hedge means the protection ,hedge investment help to get the shelter from the current market fall. Hedge investment or the hedge is give birth to the FRA (Future rate of agreement).FRA is the policy to transfer the agreement to the future to get the advantage of the general rise of the interest rate .Hedge funds investment is generally differ from the mutual fund investment as the mutual fund investment need to follow some rules and guideline for investment but the hedge fund are free from any rules and regulation for the investment. Hedge fund investment generally for the rich people as the investment are highly risk able .In the US there is a criteria for hedge investment that the investor has at least 1 million net worth of assets .Hedge fund generally need to protect the risk of interest but actually this means of investment for getting higher return .
Magegment fees are calculated on the NAV of the fund on the per annum basis but paid on the monthly or quarter basis and charged as 1% to 4 %.
Performance fees are charges on the net profit of the fund investment as there is no profit no need to pay the charges.
Main Risk:
Volatility: Hedge fund are highly elastic than other investment.
Lack of transparency: Hedge funds not follow the rules and regulation there for there is no governing body to check the performance of the hedge fund which means transparency of the investment is very low.
Lack of regulation: There are no specific rules or regulation for the hedge fund investment as a result the hedge fund manager decision is the last decision for the investment.

Buy Back Of Equity Shares

2010-05-12T02:55:00.000-07:00

Buy back of shares means reducing the total number of shares from the market.
Buy back of shares help to increase the goodwill of the company as well as help to increase the market value of shares .Buy back of shares require a large lump sum amount of liquid cash .Buy back help dispose the excess cash reserve of the company to protect the ownership of the company or to consolidate the ownership in the few of hands.Buy back has some condition also .In the different countries there are different rules need to follow when any company goes for the buyback policy .Company need to inform there shares holder in the general meeting that company goes for buyback process.Company need to get clearance from the governing body of that country.company not able to issue fresh equity three months after the buy back process.
Company purchase there own shares from the market at a premium amount ,but these condition not exist after a some time because the market price of the shares increase up to the shares price to get the advantage of the increase amount benefit.

Prime Objective to buy back are:
1.To reduce the outstanding equity capital:
To reduce the outstanding equity capital as a consequence of which the floating stock in the market reduced.Buy back help to minimize the total amount of equity capital from the market,which help to stabilize the market price of the share.

2.To increase the return on the remaining portion of the shares :
Buy back help to reduce the volume of equity capital in the market and the remaining equity holder get the higher return than before .Suppose the net profit of the company is 15 million dollar and the total number of equity share holder are 100000 holding total 1 million shares but after the buyback of share the total number of shares reduce to 50000 that means 15 million dollar distributed among the 50000 shares definitely the unit holder getting better return than before .
3.When the company has surplus cash and run out of favorable investment opportunity:
Buyback is only possible when the company has sufficient liquid assets in their reserve and the investment rate of return is less than the cost of equity than the company goes for the buyback policy.
4.Support the shares price:
Buy back help to increase the market value of the shares and to reduce the fluctuation in the shares price of that company.

Bonds are not totally risk free investment

2010-05-04T23:09:00.000-07:00

Bonds are less risky than the equity but it doesn’t meant its risk averse bonds investment are default risk as well as the interest rate risk.

If the market down and recession than there is no option to save the investment by any means .

1.Default Risk:

Suppose any company become bankrupt than the investor lost there whole investment.is the some part paid in the future than also the investor loss the current market value of the rupee.

2.Interest rate risk:

Interest rate risk will arise with changing in the interest rate in the market.Bonds are not held till maturity ,in that case the investor get the low amount of there investment that means price loss.If the hold the bonds till maturity than the suffer from the capital loss if the market price of the bonds reduce.

Change in the price fluctuation caused by the interest rate elasticity of bonds .Increase in the interest rate has increase the interest income as well as the reinvestment of that income gives the higher income .Increase in the interest rate reduce the market value of the bonds menace the investor get lower return by resumption of the bonds .It menace that increase in the interest rate has positive reinvestment effect but negative price effect.On the other hand reduce in the interest rate ,reduce the reinvestment income but the resumption value of the bonds increase due to reduce in market interest rate,that means the reduce in the interest rate has negative effect on the reinvestment but positive price effect.

To protect the investment from the elasticity of interest rate change ,Bond immunization is the right way.

Bonds immunization not depend on redemption value(yield to maturity) of the bonds ,it depends on the duration of the bonds.

If a liability needs to be paid after a particular time period then the investor needs to go for the Bond immunization which is exactly of the same duration as liability period and here the interest rates are on compound basis.

Bonds immunization helps to protect from the fluctuating interest rate market.

Guide line before investing in the security market

2010-04-27T02:01:00.000-07:00

The main motto to invest in the security market to get the better return than the general fixed deposit or the bank deposit .Security market is provide the good return but here the risk of investment is much higher than the other investment option. To reduce the risk factor some precaution needed.
Security analyst has taken some basic step to educe the risk .

1. Quality of Management:
Quality of the management help to achieve the company goal which help to get the better return and also help to increase the turnover of the company. In every company there is saturation point but the good management with new innovation are able to get the primary level again .

2. Overall growth prospect:
If you want to purchase any company shares than check the past performance of that company .
Its liquidity, financial result ,assets combination etc.
As I past performance is not always good to judge the future of any company but still it help to decide the primary level of investment.

3. Quality of Earning:
Quality of earning menace the financial result of the company from last few years ,also check the turnover ration which help to get the financial structure of the company.

4. Clear information of the corporate strategy:
This means to check the transparency of the company. If the company regularly provide the financial result ant the financial position information also provide the assets and debt information of the company which help to get the clear picture of that company it also help to make the right future prediction of that company. This help to get the information that where the fund investment and how much it invested.

5. Liquidity position:
Investment in the security is very risky so when anyone go for the investment in security market than its better to check the liquidity position of that company which help to get knowledge that if there is any financial problem arises than the investor get back there capital investment.

6. Position in the market place:
Market position help get the financial strength as well as the goodwill of th company ,Goodwill of the company some time major difference in the investment and the price of the security.
7. industry prospect:
Industry prospect means the growth strategy relation with the Govt and the society .Some time the Govt. promote some industry and on the other hand Govt. impose some extra duty on some other industry to reduce the import or to increase the export extra.

8. Relation with the investors.
Relation with the investors means the company provide all the material fact financial information in the regular interval to the investor .They paid the dividend and the interest as time period decided in the agreement and also company informed the investor the new business strategy which effect the earning of the investor.

Different types of bonds

2010-04-22T03:11:00.000-07:00

Bonds are easily converted intro the liquid cash in comparison to other source of the invest . In financial market depends on the pure debt reduce with the introduction of the different means of bonds. Main category of bonds are:

Secured and Unsecured bonds:

Secured bonds are backed by the assets that means the secured bond holder has the right sell the property related to the bond to get the amount back .Unsecured bonds doesn't arise any right of the holder of bonds on the assets o the company.

Convertible and non convertible bonds:

Convertible bonds are those which converted in the equity shares after the maturity period. Non convertible bonds carry interest on the investment portion its not transfer into equity shares.

Bonds market innovation:

Now a days the pure debt rarely used to collect the funds as this arise financial burden second one that the debt fund collected by any industry need to follow many rules and regulation as well as the restriction by the Industrial governing body that debt capital collected up to limited amount.

In the financial market there is new way of fund raising system invented which reduce the dependence on the pure debt.

1.Zero interest rate Fully convertible bonds:

Here the interest rate is 0 and the bonds converted into the equity shares after the maturity period .

Example: Suppose the market value of the bonds is rs10 after maturity rs 100 bonds converted into the 2 equity shares of rs35 each with premium rsrs30 on each.

2.Detachable Equity cu pons:

Here the bonds holder get the detachable equity cu pons which they transfer into the equity shares aft6er maturity or they are able to sale the detachable portion in the market.

3.Secured Premium Notes:

Here the investors get the flexibility ,that after a 4 or 7 years the investors are able to go for the equity transfer with pay the remaining amount or go for the nonconvertible portion with getting interest as well as capital appreciation .

4.Triple option convertible bonds:

Here the investor get the fully transfer option at the maturity of the bonds or go for non transferable option or get third one transfer the half portion into the equity shares and remaining in nonconvertible portion get the interest on that.

5.floating rate bonds:

This bonds interest rate changes with change in the market interest rate therefore these bonds are called floating rate bonds.

6.Extendibles Bonds:

Extensible bonds are those bonds,where the maturity periods are more than one here the issuer extend the maturity period with the changing market condition. If the interest rate arises than the holder can increase the maturity periods on the other hands if the interest rate reduce than the holder has right to sell the bonds.

7.Foreign currency bonds:

In this bonds the issuer country collect money from the homeland bonds holder and issue the foreign bonds this bonds help to the holder to get the benefits of the higher interest rate of the foreign country .

These bonds are know as Bulldog in UK and Samurai in Japan.

8.Govt. Bonds:

Govt. collect the debt amount to fulfill the gap of the fiscal deficit ,demand for the Govt. bonds is now a days increase as this is the safes means of investment.

9.Inflation rate bonds:

Now a days the European and the American market arise the funds by issuing the inflation bonds the market value of these bonds increase with the inflation,and the interest rate also provide a good source of income.

A New Way to Collect The Debt Fund(Convertible Debt Bonds)

2010-04-20T02:05:00.000-07:00

Convertible debt is one of the hybrid investment where one can invest in the debt bonds and these debt bonds transfer to equity shares on the later period.
Debt bonds help to get the debt for long period of time as well as it not arise any liquidity crunch situation among the company to return the cash on the maturity of the debt bonds.
US and the Japan are the two largest debt bonds market in the world.
What are the basic need that a company use convertible bonds or convertible debt bonds,company wants to get the finance with lowest cost and debt bonds fulfill that also it help to arrange debt finance for long period of time.

According to the transfer norms convertible bods divided in the different categories:
1.Issuer terms based:
I used this terms as these bonds are converted into the equity on the maturity but the conversion depends on the will of the issuer. If the issuing company does want to transfer the debt bonds than its pay the amount on cash to the holder with interest on it.

2.Conversion on the third party shares:
Generally this is not a convertible bonds as because the issuer company issue any third party shares to the holder in place of its own shares . This type of convertible bonds issued by the newly opend company .

3.Mandatory convertible:
This is the actual convertible bonds where the issuer company transfer there convertible portion on equity shares after the maturity period.
4.Cash payments:
Here the issuer company paid the amount as per the current market value of the bonds with the interest amount or paid more amount than the actual market rate .

5.Issue of the old or new dividend based bonds:
Here the issuing company has right to issue the shares based on old or new dividend rates.
6.Partial convertible bonds:
The issuer company transfer a fraction amount to the bonds to the share and paid the remaining amount as cash with interest on it.

7.Issue of the holding company shares:
Here the issuing company transfer the bonds on the holding company shares ,these issue help to get the AAA rated company shares by the investor .
8.Reverse convertible:
Reverse convertible is actually one type of extension of the maturity period by the issuing company on the maturity date of the old bonds.

Uses:
1.Long term borrowing:
Issuing company arrange the finance for a long time ,because the convertible debenture maturity period some time more than 5five financial years.
2.Low cost of borrowing:
The cost of borrowing is less than the debt borrow ,here the interest rate calculated on the bonds but paid on the maturity as well as the company no need to pay the liquid cash on the maturity period ,they only transfer the amount on shares.
3.Voting Right transfer:
voting right transfer only when the equity shares given on the conversion but if the preference shares issue than the no voting right transfer to the holder of the shares.

4.Help to collect the huge amount by debt:
There is certain condition that a company cannot raise fund by debt after a certain amount but the convertible debt bonds help to get extra amount from the market.
5.Tax advantage:
Tax calculated on the net profit of any company but the interest on the convertible bonds deducted before the tax deduction.

Some Basic Steps For Shares Or the Bonds Transfer

2010-04-15T02:11:00.000-07:00

Transfer of shares has some criteria need to follow. If all the criteria not followed than the shares transfer become void .

1.Proper Documentation:

All the shares certificates and document transfer in the name of the purchaser.

If the all relevant proof of documents are not present than it require to inform the Bord of Directors to prepare the document in the name of the purchaser .

2.Proper Stamping:

All the relevant document are properly stamped before its transferring .

3.Verification by the Registrar of the Company:

All the relevant documents should be presented before the registrar of that company for its verification this time period within the 2 months but in some cases extended by the central Govt.

4.More than One Receiver:

If there is more than one receiver than all of them need to signed in the transfer paper with there detail of holding percentage.

5.Joint Holder of the Shares:

If the shares and bonds are jointly owned ,than everyone need to signed documents for approval of the transfer of the shares certificates.

Special cases of the Transfer of the shares certificates:

1.President of a country or Limited company:

The nominee of the president or the nominee of the Bord of Directors of any company can sign for transfer of the shares certificates in the name of the other party.

2.Minor Case:

in case of the minor holder the nominee or the guardian can sign the transfer certificate .

3.Power of the attorney holder;

The power of attorney holder of any Company have the right to make the transfer deal and signed in the transfer certificates.

4.Lunatic holder of the shares:

Lunatic people are not able to sign the transfer deed of the documents ,the legal guardian or the nominee make the transfer and signed in his or her place.

5.Shares transfer by any Trust:

In case of the shares transfer by th Trust trusty has the right to signed in the transfer documents as per the law.

6.Limited Company:

In case of the Limited company the Bord of Directors of the Company has the authority to tarnsfer the shares or the nominee appointed by the Board has the right to signed in the tranfsert deeds.

7.Liquidation Case:

In case of the liquidation the Liquidator appointed by the Govt. or by the Court has the right to signed in the transfer deed.

8.Claim of the Tax authority on the move able assets:

If the tax authority has lump sum tax due and the shares has in the control of the tax department than the Tax commissioner has the rights to signed in the transfer certificates.

Special cases of share transfer:

Cu-pons and Certificates transfer : Cu-pons and share certificate are different things. Cupons are issued and after submitting the cu-pons share alloted to the holder the cu-pons transfer no need any kinds of documentation like share transfer.

Transmission:

Shares transmitted to the other family members of the family in case of the death of the owner. In case of the partnership business the shares transfer to the other lived partner. In case if the holder of the shares made any will than this shares transfer as per his guideline.

Insolvency:

In case of the insolvency the Insolvent-or appointed by the Govt, has the right to dispose the shares,and sign the transfer deeds.

Lunacy:

In case of unsound minds the legal guardian and the nominee appointed by the court has the right to transfer the shares.

Step should be consider before the investment in the Mutual Funds company

2010-04-14T00:03:00.000-07:00

Mutual funds investment now days get the important means of investment as it gives higher return with low risk in comparison to other mens of investment.
Some criteria are decided to go for the mutual funds investment :

Suitability: Before investing in mutual funds you need to decide that this is the right means of investment and also suitable with your requirement and fulfill the condition which you want .
Level of risk:

Level of risk: Mutual funds pay the good return but it doesn't means it risk free investment , risk level not ignore .Than it require that you decide how much risk you can afford, because there is interest risk capital risk due to reduce in price value of the bonds the market go down ,than also the investor lost there money which invested in the mutual funds, therefore the investors need to first select how much risk level he can afford.

Investment objective: When any investors invest in the mutual funds he first decide the objective of investment. Objective means he prefer the growth means want to get the capital profit on redemption or prefer the increase in the income by dividend on the investment.

Funds performance:Funds performance check by the past record of the funds,but its also true that past trends cannot decide the future performance. Past trends only help to check the performance ad some situation,it also helpful.

Funds portfolio:Before investing in any mutual funds scheme ,investor need to check the portfolio combination. Where the funds invest its funds.
Funds objective: Funds objective means Funds invest total investment in particular sector or in specific industry and there is any deviation the investment trend in the near future or not.
Diversification of investment base: It also needed to check that fund change it investment policy regularly which is not good in point of view of investment return .Regular diversification show that the investment is not earn long term gain in the market.
Transparency : Check that Mutual funds company regularly produce his financial report in media also send the news letter to the investor also the detail of the investment and income report available at all of its branch office.
Discloser:Mutual funds disclose all its material facts and policy to the governing bodies appointed by the govt. to look after the performance of the mutual funds there is no hidden agenda or investment.
The main goal of invest is getting good return get when we sell the investment therefore there is need to check that mutual funds sell there investment at regular interval and maintain th profitable business by selling except in some cases when market goes down. When we decide to sell the funds:
Regular under perform by the Funds: When the fund company market value regularly reduce than it better to sell the funds to minimize the capital loss or to save from further loss.
Drift in investment style: suppose the mutual funds company change his investment pattern and invest in different avenue than the path of investment mention in the rules and regulation book of that Mutual funds than its better to sell the portion of investment.

Consolidate : Means to get return or collect the funds from the sale of the investment.

To earn the tax break:If anyone want to get the tax benefits investment than go for the tax saving plan or to invest in the equity where the investor get the tax benefits on the investment.

Govt. Bonds is safest way on investment

2010-04-06T04:07:00.000-07:00

Govt. security or treasury bonds, now a day gives a good return and it’s also a safe investment, there is not a issue to loss capital due to adverse condition.

Future for the treasure bonds also goods as interest rate reduce day by day and there is not any symptom in the market that Govt. increase the interest rate in the near future, In that market scenario, the bank deposit reduce and money comes in market and the increased money flow in the market increase the inflation situation and also affect the purchasing power of the currency.

Govt. issues this security bonds in the market not only to reduce inflation pressure but also to meet the fiscal deficit.

Now the question arises what is the fiscal deficit?

Govt. makes different development plans and also invests in defense and other research programme, there is no other option to reduce investment or neglect any one of this sector, but the actual investment in these means most of times more than the revenue generate by the govt.

To meet this extra expenditure Govt. need to take loans from the world monetary funds or raise money from internal sources.

Loan taken from world financial institution not good from any respect because some time world bank of International Monetary Funds impose different terms and condition on the country to use such fund on a related field also these institution demand to concentrate on specific field of economy and they also want the total detail of the use of that funds which is never appreciate because it disclose many financial plan of the economy which need to kept secret for the development, or economic growth.

Than there is only one way to raise money by the issue of the Govt. security.

Budget deficit of US govt. in 2010 is$1.57 trillion and in 2011 it will be$ 1.267 trillion.

Advantage of the Govt. Bonds:

1. Safe means of investment: Govt. bonds are the safe means of investment. Govt. bonds market value not change as like other investment avenue, it is the safest way of investment.

2. Liquid cash transfer: Govt. bonds easily transfer into liquid cash as per requirement, by mortgage it to any bank or to sell in the open market.

3. High interest rate: Govt. bonds interest rate not change with the change in market situation that means if you invest in one interest rate till the maturity you got the same interest rate benefits. Interest rate in the Govt. bonds higher that the bank deposit or other investment plan.

4.Capital gain : Govt. bonds market value not reduce as like any other means of investment .Investor always get better return after maturity of the bonds.

5. No need to maintain Portfolio investment: Govt. bonds are most safe way of investment, you don’t need to invest in different means of investment or maintain the portfolio management to minimize the risk of investment.

6. Good future prospect: As per the economic situation the market demand for the govt. bonds increase, as the reducing rate of interest and development of infrastructure Govt. need huge investment in future which means Govt. collect that money from issue of the bonds.

Precaution step taken before investment----

2010-04-01T22:59:00.000-07:00

Investment is a risky work if you want to get high return than definitely you need to ready for high risk, lower the risk lower gain, but some precaution will reduce risk or minimize the risk.
First you need to understand why investment is required.
Suppose you have $10000 today but the purchasing power of $10000 is reducing with the time .Investment help to maintain the marginal value of money.
Second you have a requirement $50000 after 10 years and you save from today to get this amount .In every year you need to reserve $5000 to get the amount $50000 after 10 years ,or you need to deposit a certain amount today in any bank to get the
$50000 after 10 years, in any one this condition you are not benefitted by the market change, or $5000 every year not help your money to get extra advantage ,on the other hand if you invest $5000 every year in any investment plan which is quite necessary that as liquid that ,you easily converted that investment in liquid cash than you are getting extra benefit from your saving .suppose I purchase $5000 share of a company every year and after 10th year when I need the liquid cash than I sell the whole share in that time and the whole investment arise near about $ 70000 that means I get $20000 extra.
Again the investment depend on the basis or requirement suppose You need cash money or need equivalent amount to pay to any other after a long period of time .
Suppose you need liquid cash on maturity than you definitely go with the option when the liquid cash easily available after maturity like debt bonds investment.
Debt bonds issued by the Govt. or any other financial institution to collect money.
This amount converted into cash after maturity, here the interest rate is also high compare to normal market but the risk factor is also high.
I will never advice anyone to invest his total reserve in any single investment plan .First I suggest That if you have a surplus amount of reserve than you go with the investment plan, you never go to invest your total income in the investment plan if do to any reason market down than you lost your total amount at one time.’

Steps that need to monitor before investment:

1. Risk taking ability: First you need to decide how much financially strong you are, if you are financially strong than surely your risk taking ability higher than other.
This ability varies with age group with reserve amount with market condition.
People from 30to40 age groups are risk averse they not ready than the 40 + people.
Market ups and down will also affect the investment plan if market continues upward trend than surely the investment increase in the market, and vice versa in opposite Condition .
2.Interest rate :Interest rate in the market change the investment, suppose if the interest rate high than the investment reduce ,people choose to deposit the amount and get the interest on the deposit amount, but if the interest rate low than investment increase in the market.
3. Past trend: Past financial result of any company would help to collect money suppose the company show good financial result in the past definitely, investore go for that company for investment, but as per my point of view I will never recommend anyone to invest based on the past record.

4. Economic policy of the country: Open market economy will attract the investor, on the other hand autocratic or the socialist plan distracts the investment.

5. Future plan: Future prospect of any company is help to understand the future trend and help to make the future projection for that company .I will recommend anyone to select the investment plan as per the future prospect, which help to know the actual financial position of the company in future.

5. Liquidity position: If you want to invest in any plan first need to decide the liquidity position because if the company does have adequate amount of liquid cash than might be possible you loss your money.

6. Time period of investment: Never ever make any decision of investment or disinvestment by regular changing situation of market always go for long term investment plan which help to get better return.

7. Portfolio investment system: Never put your eggs in single basket, mean to say never invest in any single company of the investment plan .Invest indifferent sector of investment which helps to reduce the financial risk.

New Era of Global Investment

2010-04-01T00:34:00.000-07:00

Return from the Asian market continues increase on other hand devaluation of dollar arise a fear of capital loss among the investor.

Is it the right time invest in the Asian countries and get the maximum return.
Yes its true that that Asian economy play a major role in the world economy, the boom of Chinese, India, and other east Asian countries attract all foreign investors , and the Yuan, rupees now as gained much value in the world market.
As per the US financial statistic ,Chinese economy now the third largest economy and Indian economy comes in the 6th spot ,but in the future the Chinese economy cross the Us economy and become the biggest economy of the world and India become the second largest the time frame set for this phenomena ,2025 .
The reason behind this prediction is that when the whole world facing the recession only these two Asian giant not affect much by the world recession .Other countries reduce their manpower in factory for cost cutting on the other hand, Indian and China generate new employment opportunity.
If India and China maintain the same economic growth than it’s not a big task for these economy to get this position, but it’s too early to predict that the time come to invest in the Asian market, because we never forget the downfall of Asian Tiger in mid 90s.
The growth of the Asian market total depend on the growth of the Japan as Japan is the largest economy in the Asia, and yen play big role in the Asian market, also the growth of the Asian market directly or indirectly depends on the Japanese economy but there is no sign of revive in the near future by Japanese economy.

But there is second aspect too, one time the total world economy depends on the US for there growth but now the scenario total changed.
After World War 2, dollar become the world currency and the Asian European countries directly or indirectly depends on the US export for getting the foreign currency.
Japan became one of the big economies, because after 2nd World War Japan become the biggest trading partner of US .Demand for the Japanese electronics; cars increase 10 times more than the pre War time.
GM loss there US market but the Japanese Toyota, Honda, Mitsubishi, Nissan get the new market and their demand increase many times than before.
Japanese companies also used the dumping system to increase there market share, and therefore the US market filled with Japanese electronics.

Not only Japan Euopean Union also export the 1/3 portion of total export only to US, Middle countries also export most part of there petroleum to the US.

In the present economic world, China and India’s demand for energy increase multiple times than before, these two countries require energy for their industrialization.
Economic growth of India, China, Egypt and other East Asian countries gives the new market to the world.
Indian become the biggest mall car producer in the world, new middle class population of Indonesia and China demand more luxuries goods for consumption and the demand much higher than the actual production of consumer durable goods ,therefore all big consumes producing companies open there factory in India and China.
Indian stock exchange cross the mark of 16000 points.
Main points to concentrate when invest in any Asian country ----------

1. Security issuing companies liquidity position, that industry capable to return or not.

2. Check the interest rate of that country is it fluctuate according to market or not.

3. Influence of the Govt. on the foreign investment, because the autocrat govt. impose restriction the payment of interest on foreign investment, which done in past by the Malaysian and Indonesia in past.

4. One more thing that high return means high risk but try to invest in AAA rate or in the blue chip companies to reduce the market risk.

5. Last but not the least to use portfolio management than to invest in any single industry.

Portfolio management helps to minimize the financial risk

2010-03-30T01:57:00.000-07:00

Portfolio management is just minimizing the risk of investment it not reduces the total risk to zero.
Suppose someone invest in any company share or debenture or other means of investment ,the motive behind every investment is to earn revenue but the investment in any single sector is increase the risk many time in comparison to the portfolio management .In portfolio management the investor invest same means of investment not on any other means but he distribute his investment in many segment ,therefore it reduce the risk percentage , and the loss of any one investment cover up by the gain of other investment .
Suppose a investor has $50000 in hand he want to get adequate return by investing this amount. He has 1st option deposit this in the bank and getting return as interest on it but the return which he get is very less but it’s a safe means of investment there is not financial risk, 2nd one deposit this amount in the govt. bond which is also a secure investment and return is better compare to deposit in the bank, 3rd one to invest it in the AAA rated or blue chip companies here return is good and risk is low, but still it not say safe. If any one want to get the big return by his investment than he need to invest in the equity or the bond market where the return is good but the financial risk arises and here the need of the portfolio management arises .In a portfolio management one can invest his money in the shares of the different companies .
But it also not possible to invest in all companies, investor need to decide in which company he want to invest and in which company he doesn’t want to invest, now this question depend on the perfiormance4 of the company in the last few financial years with the future projection and also the ability of the internal management, the sector of the industry from which the company belong.
Mutual fund are the same think tank of portfolio management , the organized way of the investment ,here the different financial analyst are regular watch the market and according to the market report they decide where to invest or where not. Mutual fund sector invested the total collected funds to the blue chip companies and as per the market up and down they help to the investor to decide to purchase or sale of the securities and for this they charge only a nominal amount as a fees.

As per my point of view if anyone want to invest for the long period of the time in that case than its better to maintain there investment as per his will by a normal watching the ups and downs of the market he don’t need to become panic by a normal ups and down and here the portfolio management helps a lot to reduce the investment risk.

If you want to get the future projection of the market than Collete the financial report of the company and future projection report you need to calculate only the financial risk by calculating the standard deviation (S.D.) of the return and the beta of the return.

Financial report of the company generally gives all the detail information regarding this.
You need to make future projection report as per the current market atmosphere and according to the in future demand of the goods.

Medical Tourism a new way to earn the Foreign Exchange

2010-03-29T02:45:00.000-07:00

Medical Tourism concept is not a new its developed in 2000 or 3000 years ago when the European Countries peoples were travel to the Greek and the Asian countries peoples travel India.
In the new era with the development of the science and technology the US and European countries developed first as the Medical Tourism epicenter but later on after the 90s when the countries like India, Jordan and other Asian countries provided same facilities at lower cost then the epicenter change to Asia.
World’s leading medical facilities with well trained doctors available in developing countries like India, Thailand, HongKong, China, Taiwan but the charge for the medical services 5 to 10 times lower than the European and American countries.
Open heart surgery charges in the US or any European countries is 1 million rupees on the other hand same thing charged in India 00.4 to 00.5 million rupees, facilities provided by the doctors are same on both the countries.
Not only the treatment but also the medicine charge is much lower than the any developed countries.
In India foreign tourist come from African countries, from South East Asian countries and also from the developed countries like UK, USA, Canada, East European countries.
As the medical tourist get the lower charge, good hospitality with world class modern equipments available.

According to the American report more than 500000 tourists traveled in 2005 for dental and other medical checkup for other countries. As per the estimate the medical tourism industry become 100 bn dollar industries in 2012.
As the western and other countries prefer Ayurveda and yoga as the new way of treatment it also not any side effects therefore the in near future 70000000 medical tourist goes in developing countries like India and Brazil for the medical treatment