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Welcome to the most comprehensive investment blog on the web: Investing-In.com

Investing-in is a one-stop web resource for learning & educating yourself on various financial assets & instruments available for making your investments. Our blog not only focuses on educating our blog readers on various international investments, but also emphasizes on other aspects of investments; especially the macro outlook for financial markets and the major asset classes (including gold).

The Value of the Rupee Is Often Influenced by Trends in the Yen

June 26, 2012

Newcomers to trading foreign currencies are immediately astounded by the enormous amount of information that must be assimilated daily.  Currencies do not trade in a vacuum.  In today’s modern era of globalization, currencies are the “fulcrum points” upon which global commerce teeters to and fro.  Currencies come in pairs, and any information, fundamental or technical, that can impact either country’s economy in any way must be taken into account by a forex trader or he risks an unanticipated financial setback in the market.

Currency brokers and traders alike attempt to stay abreast of every correlation in the market that might suggest a potential trend in the making.  Fundamentals do move the currency market, but often it is a combination of many factors that produce a noticeable change in direction, making it difficult to pinpoint the actual details leading to the shift.  The value of the Rupee has declined some 20% in the past ten months for a number of reasons, but tracking its correlation to the Japanese Yen is one way to gain insights into what might happen next.

The following diagram illustrates this market relationship between the Rupee and the Yen over the past two years:

Forex Market Correlations

Much has been written about the ongoing success story in India.  Over the past four decades, the nation has benefited from corporations in developed economies in the West “off shoring” various activities to Indian enterprises due to low labor costs, favorable legal infrastructure, and low government corruption.  GDP growth over he period has been significant, and although present forecasts may be 5.2% for 2012, there is not a developed economy in the world that would not be happy with this figure.  In India, however, this figure represents a material decline from years past.  Inflation and slower growth are now true concerns, and the value of the Rupee has fallen as a result.

What is the correlation with the Yen all about?  As a developing economy, Indian investors must accept the vagaries of the “carry trade” in today’s world of global investing.  International banks, corporations, and investors often borrow funds in a low interest environment and then invest them where potential returns are higher.  The Yen and the U.S. Dollar are typically the “carry” currency in this scenario, due to their near zero interest rate postures at the moment.  The investment side of the transaction has often been in Indian securities, due to their potential for high returns.

The “carry trade” scenario works fine as long as relative currency valuations remain constant or the rate for the target country, in this example India, appreciates.  When the local currency appreciates, the investor reaps two rewards – the return on his security and a bit extra from the better exchange rate when funds are repatriated.  While the first half of the chart illustrates favorable conditions, the past year reflects how quickly capital flows can reverse in today’s electronic trading environment.

The first “Divergence” occurred following the earthquake in Japan and the political strife in Europe.  In both cases, funds were repatriated back to their respective homelands, causing a massive shift in “carry trade” positions, especially in India.  As the Yen strengthened, the Rupee fell.  An increase in domestic interest rates by the RBI reversed this trend, causing a brief “Convergence”, but a “double-dip” recession in the majority of countries in the Eurozone has created a more “Risk-Off” mentality to grip the minds of the investment community.

At present, another divergence has taken place.  What is a likely scenario for the future?  A weaker Yen may yet cause another convergence.  Stay tuned.

Housing and Urban Development Corporation Ltd (HUDCO) Bonds – Download Application Form

January 27, 2012

HUDCO Tax Free BondsIssue: Housing   and   Urban  Development  Corporation   Limited   (HUDCO) Bonds – Tax-free, Secured, Redeemable and Non-convertible Bonds

Issue opens: 27 January 2012

Issue  closes: 6 February 2012

Credit Rating:  Fitch AA+ (ind) by FITCH & CARE AA+ by CARE.

Allotment Basis: First-come-First-serve basis.

NEED APPLICATION??

DOWNLOAD >>  Housing   and   Urban  Development  Corporation   Limited   (HUDCO) Bonds Application Form  | >> CLICK HERE << |

BOND PARTICULARS:

ISSUER HUDCO HUDCO
Issue Structure Secured, NCD, Listed in NSE BSE Secured, NCD, Listed in NSE BSE
Expected Issue Size Rs.4684.Cr Rs.4684.Cr
Credit Rating AA+ by CRISIL & ICRA AA+ by CRISIL & ICRA
Face Value Rs.1000 per bond Rs.1000 per bond
Minimum Subscription 50 BondsX5 50 BondsX5
Tenure 10 Years 15 Years
Interest Payment Date 15th October Annually 15th October Annually
Put & Call Option None None
Coupon Rate –for

(Application > Rs.5.00 Lacs)

8.10%p.a. 8.20%p.a
Coupon Rate – for Retail Category

(Application <= Rs.5.00 Lacs)

8.22%p.a.* 8.35% p.a*
Issue Opens 27TH January 2011 27TH January 2011
Issue Closes
Allocation Basis first-come first-serve basis. first-come first-serve basis.

TAX BENEFITS

1.    The income by way of interest on these Bonds shall not form part of total income as per provisions under section 10 (15) (iv) (h) of I.T. Act, 1961;

2.    There shall be no deduction of tax at source from the interest, which accrues to the  bondholders in these bonds irrespective of the amount of the interest or the status of the investors;

3.    As per provisions under  section  2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T.  Act, a listed  Bond  is  treated  as  a  long  term  capital  asset  if  the  same  is  held  for  more  than  12  months immediately preceding  the date of its transfer. Under section 112 of the I.T. Act, capital gains arising on the transfer of listed Bonds shall be taxed @ 10% without indexation;

4.    Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957.

SALIENT FEATURES:

  1. The Bonds are issued in the form of tax-free, secured, redeemable, non-convertible bonds and the interest on the Bonds will not form part of the total income.
  2. In case of over-subscription; allotment shall be on first cum  first serve  basis  upto  the  date  falling  1  day  prior  to  the   date  of oversubscription   and   on   proportionate   basis   on   the   date   of oversubscription.
  3. Credit rating agency CARE has rated the bonds “CARE  AA+” & FITCH has rated the bonds “Fitch AA+ (ind)”.  Instruments with this  rating  are  considered  to  have  the   high  degree  of  safety regarding    timely    servicing    of    financial    obligations.   Such instruments carry very low credit risk.
  4. The bonds are fully secured by way of floating first pari  passu charge on the present and future receivables of the company to the extent of amount mobilized under the issue.  The security cover is 1.0 times of the outstanding Bonds at any point in time.
  5. The Bonds bear an attractive coupon rate; 8.10% p.a. for Tranche 1 Series 1 (bonds maturing after 10 years) and 8.20% p.a. for Tranche 1 Series 2 (bonds maturing after 15 years). (Tax free).
  6. HUDCO shall pay 8% p.a. for Tranche 1 Bonds as interest on the Application amount retained.
  7. HUDCO shall also pay 4% p.a. on refund of application amount. Such  interest  shall  be  paid  along  with  the  monies  liable  to  be refunded.
  8. Issuance  will  be  in  DEMAT  as  well  as  PHYSICAL  form.  The bonds will be listed on both BSE and NSE; facilitating  trading of these bonds.
  9. Investors can pledge or hypothecate these bonds to avail loans.

NOTE:

For all the categories  Tranche-I  Series 1 Bonds and Tranche- I Series 2 Bonds  shall carry interest  at the coupon rate of 8.10% p.a. and 8.20% p.a., respectively, payable annually on the Interest Payment Date.

However, an additional interest at the rate of 0.12% p.a. and 0.15% p.a. shall be payable to the Allottees under  Category   III  for  the  Tranche-I   Series  1  Bonds  and  Tranche-   I  Series  2  Bonds   respectively. Accordingly, Tranche-I  Series 1 Bonds and Tranche-  I Series 2 Bonds Allotted to Category III Investors, shall carry an aggregate coupon rate of 8.22% p.a. and 8.35% p.a., respectively,  payable annually on the Interest Payment Date.

Please note that the aforesaid additional interest of 0.12% p.a. and 0.15% p.a. shall only be available to the original Allottees and shall not be available in the following instances:

1.    In  case  the  Bonds  are  sold  and/or  transferred  by  the  original  allottee,  the  transferee  will  not  be entitled to receive the interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and Tranche- I Series 2 Bonds respectively and shall only be entitled to receive the interest at the  coupon  rate of 8.10%  p.a. and 8.20%  p.a., for the Tranche-  I Series  1 Bonds  and the  Tranche-  I Series 2 Bonds respectively.  However, in case of any transfer by a permanently  disabled Allottee  to their legal heir(s), the transferee shall continue to be entitled to receive interest at the coupon rate of 8.22%  p.a.  and  8.35%  p.a.,  for  the  Tranche-  I  Series  1  Bonds  and  the  Tranche-  I  Series  2  Bonds respectively.

Where the Bonds are held in joint names and subsequently  there is a change in the sequence of the names of the joint Bondholders, the joint Bondholders subsequent to such change in sequence of names, will no longer be entitled to receive the interest at the coupon rate of 8.22% p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and the Tranche-  I Series  2 Bonds  respectively  and shall  only  be entitled  to receive the interest at the coupon rate of 8.10% p.a. and 8.20% p.a., for the Tranche- I Series 2 Bonds and the Tranche- I Series 2 Bonds respectively. However, in case of change in name of any of the joint Bondholders,  such joint Bondholders shall continue  to be entitled  to  receive interest at the coupon rate of 8.22%  p.a. and 8.35% p.a., for the Tranche- I Series 1 Bonds and the Tranche- I Series 2 Bonds respectively.

DOWNLOAD HUDCO Tax Free Bond Application >> CLICK HERE <<

Why Invest in India?

October 12, 2011

These days, India is the place to be, with its rapidly growing economy, thriving population and fast paced development; it’s definitely the best emerging market. The Indian economy is starkly different from what it was even a decade ago and is now on a growing curve which is rapidly rising. Today, the Indian economy has a considerable and stable growth rate, great foreign exchange reviews and capital markets which are flourishing.

A clever investor will therefore see this as the golden opportunity that it really is and invest in the Indian economy because the returns are going to be nothing short of phenomenal. Even a decade ago, foreign investors were not being welcomed into the Indian market, but things have changed quite a bit since then because of the phenomenon of rapid globalization.

** Get Free Investment Advice: Know More >>

Government Incentives

The long term capital gains for foreign companies have been reduced to twenty percent! Previously, there used to be a ban against the use of foreign trademarks and brand names. But this has been removed. Now foreign trademarks can be used within the country freely. Moreover, the Indian budget has been steadily lowering the tax rates for foreign companies over the years. Both types of firms – Indian as well as foreign – have been exempted from paying export earnings!

In short, the government is making up for all the lost time it spent in driving away foreign investors and doing everything it can to invite them. The Securities Exchange Board of India (SEBI) has recently come up with guidelines which are nothing, if not encouraging toward foreign brokers. With the help of this, Foreign Brokers can now choose to set up Rupee or foreign currency denominated accounts to credit fees, brokerages and other expenditure of similar nature; indirectly facilitating online investing in India easy.

India has a very bright future ahead because of the fast paced development that the country has been going through. Another reason why foreign investors should invest in the country is the sheer size. It has a GDP of 1.3 trillion US dollars currently and that is saying something! This makes it the eighth largest economy in the world.

If the Low cost base is taken into account, then the GDP actually trebles, making it about 3.8 trillion US dollars. And it is soon set to be among the top three economies in the world – after the US and China, considering these PPP terms.

Economy and Population

The fast growth in India’s economy, despite the recession is another reason why foreign investors find it so attractive. It is growing at a steady rate of 8.75% and this growth rate is set to increase by 9 to 10% every year for the next decade or so. These figures are really impressive because India is showing a great resilience in the face of global recession which has hit the top economies of the world.

The Indian economy also offers high savings. The average rate is about 37% of the GDP which is quite a lot. The domestic savings meets most of India’s investment requirements and just about 20% of India’s total public debt is sourced from foreign borrowing!

India is also a relatively young country with an average age of just twenty five years. Investing in a thriving, bustling economy like this, full of young blood is sure to bring back sizeable returns. Over the next two decades, India’s working age population is set to reach an all time high of two hundred and forty million. The workforce is an extremely talented one, with a high degree of morals, integrity, skills in English and of course entrepreneurial skills. So if you are looking to invest, invest in India!

** Free Consulting to Invest in India: Know More >>

How to Invest in Retirement & Pension plans in India?

January 25, 2011

NRI’s – non resident Indians and PIO – person of India origin, and many foreigners who want to settle down in India to share in the economic growth, are looking at possible retirement benefits that they can enjoy after their term is over. If you are young and an earning individual, there are several attractive plans you can avail of that can ensure you mange a lifestyle similar to the one you are used to now. The primary need of a retirement benefit is to keep maintaining the same lifestyle and live comfortably in future.

Get Free Insurance Consultation:

www.nriinvestindia.com/insurance.html

Live life on your own terms

Among the many retirement plans that are much sought after, the Reliance Retirement Plan is one of them. It will ensure that you keep earning reasonably good money once you hang up your boots. You can live life on your own terms even after retiring from your work place where you could have earned a fat salary. Even though you will not enjoy the perks that went with the cushy job, you can still maintain a similar standard of living.

You can even take holidays with your family or spouse like you did when they were paid for by the company you worked for. You can even start a new business of your own after retirement if you have lined up a good and effective plan when you were young with years of employment ahead of you. Many people in India have gone into businesses or started their dream ventures as soon as they retired from service.

To do that, you will need money later on in your life which can provide the seed capital for a start up venture to realize your long cherished dream of financial independence. To make your old age satisfying and golden, the retire plan offered by Reliance offers a guaranteed return on your investment, additional premium payment facilities, vesting age choices between 45 to 85, tax free commutation and tax deductions for premiums paid.

The main reason for the rise in so many retirement benefit options in India is because of a breakdown of the joint family system.

More nuclear families

Old parents, after their retirement from service, do not want to depend on their children to look after them. Instead, they are trying all possible avenues to ensure that they can enjoy a reasonably comfortable lifestyle after they retire from service. With more and younger people going in for nuclear families, the situation will leave little hope for elderly people 10 or 20 years later to be looked after by their children. Living costs are going up along with medical care which requires families to have considerable money after they retire from service.

The situation is similar in middle India as well with second rung cities coming into focus all of a sudden. Many IT companies are also locating to smaller cities to tap the local work force. In addition to the changing scenario, the elderly people these days want to maintain an independent lifestyle which would not hinder the set-ups of their children. Children are also re-locating elsewhere and they do not generally want to come back to their place of birth.

The need for a good retirement policy in India has become acute as old people are living into their late 80’s and 90’s these days.

A longer span of life requires a comfortable bank balance and a regular income well into their old age to maintain a good lifestyle. People are also not willing to cut down on their incomes or pair down their lifestyles anymore. On the contrary, they are looking for ways and means for increasing their income to keep up with the rising living costs.

 

Three Indian Markets To Watch Over the Next Five Years

September 26, 2010

India’s economy is rapidly changing.  Seasoned investors and beginners alike can take advantage of these trends over the next five years.  Here are three sectors to consider:

1. Auto

With the seventh largest auto industry in the world, and fourth largest auto manufacturer in Asia, India is poised to become a top contender for world class auto manufacturing status.  Since government restriction was relaxed in 1991, Indian car manufacturing has experienced phenomenal growth.  Japanese automakers like Honda and Toyota are outsourcing their labor force to India, creating a skilled community of auto manufacturers.

India-based car companies should not be overlooked.  Companies like Tata Motors have become very proficient at producing fuel efficient, economy sized cars. As demand for economical cars increases in the United States, a new potential market for Indian imports is created.

2. Power

Over the next twenty years, the Indian government intends on dramatically increasing the power sector of the economy and opening up opportunities for privatized power companies.  Rural India is becoming more developed with each passing year, and power companies are vying for the opportunity to provide quality service to these areas.  Building a modern electric power grid is a top slated project for the next decade, and government funding has already been allocated to this endeavor.

Several Indian companies are beginning to research renewable energy resources.  These will likely provide a unique opportunity for investment in the coming years.

3. Telecom

The telecommunications field in India is booming and analysts predict that the trend will continue well into the next five years.  Wireless subscriptions now number in the hundreds of millions.  As technology becomes more readily available in rural sectors, this number will only continue to increase.

Bio: Alexis Bonari is a freelance writer and blog junkie. She spends much of her days blogging about Education and CollegeScholarships. In her spare time, she enjoys square-foot gardening, swimming, and avoiding her laptop.

PAN Card India

How to start a Company in India and its benefits?

September 16, 2010

With the Indian economy going great guns and poised to measure up to the other Asian tiger, China, India, with the world’s second largest population, is the toast of the world. More and more business owners and corporate houses from the world over are setting up shops in India in a bid to take advantage of the surge in her economy and the large chunks added to her formidable middle class. This section has the purchasing power and is growing by the day.

START a COMPANY in India: www.IndiaCompanyLtd.com

Primarily, for company formation and registration in India, get the draft Articles of Associations and Memorandum prepared as you bring in the application money and get the directors appointed. You need to have at least 2 directors for a private limited company registration. You can form a company by going to the website of the MCA (Ministry of Corporate Affairs in India) at: http://www.mca.gov.in by paying a fee of INR 500 to register a private or a public limited company’s name as the first step.

After you get the name approved, you need to submit Form 23 along with a Board resolution copy and pay the registration fees. Fees are dependent on the share capital and to get an incorporation certificate, fill out Form 1B. Once you log in to the MCA website, the process and guidelines are simple and easy to follow. Form 32 needs to be filled out for appointment of directors and Form 18 for address proof. After you complete these formalities, you can get the incorporation certificate within a month’s time.

Form 2 needs to be submitted to RoC for share allotment and Form 5 in the event of an increase in share capital. You can submit forms online at the MCA website with digital signatures of the authorized signatories. Director Identification Number or DIN forms can be easily downloaded from the site, filled out and sent to the Noida office of the MCA.

The director has to notify the details of the DIN by filling out a DIN 2 form and for informing the RoC, it requires a DIN 3 form. After completing all these formalities your company is established, but you need to complete some other registrations for doing business in India. After the incorporation procedure, your company needs to get a TIN or a taxpayer’s identification number and a CST number from the website of the Commercial Tax Office.

For companies that are into the services industry, registration for service tax is necessary. You can do that at the website of the Central Excise Commissioner or at http://www.servicetax.gov.in. You would need a PAN number for the company permanent account number for income tax purposes by submitting both Forms 49A and 49B and you can check out their website for details.

For tax deduction at source, you would need a TAN or company tax deduction account number from the income tax department. If your company would be involved in import and export, you need to get an import export code number or an IE number.  There are steps to go about it and you can check the website http://www.ap.nic.in/jdgft/iec.htm for details about getting it done. It is primarily important for any business that your company wants to do in overseas trade. It is applicable both for import and export trade.

Patent registrations can be done at the office of the Controller of Patents, Designs and Trademarks with the help of Form TM1 at ipindia.nic.in. You have to pay INR2500 as fee for a ten year validity of patents. It is only after you get the trademark that you can use the R symbol on the brands that you manufacture or market in India.

From all financial transactions, you need to open a current account with a bank and share certificates can be issued by submitting Form 2. For filling up physical forms, get rubber stamps made of your company.  From transparency with shareholders, get an agreement done.

To conclude, one must not forget to acquire all the requisite documents from the MCA for running the company. To mention these documents would have Memorandum of Association, Articles of association and Incorporation Certificate.

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