The Hindu Business Line : Sunday, May 04, 2003

BSNL's new tariff plans: Getting to the pulse of the consumer
BHARAT Sanchar Nigam Limited (BSNL) has now upped the ante in the business of landlines that still dominate the telecom landscape. This comes on the heels of BSNL's success in the mobile phone business, where it racked up 2.3 million customers ... More

Pricing of long distance calls
THE "Dial 95" facility within each State has been made more attractive. It has been extended for distances greater than 200 km within the same telecom circle (usually each State is a circle). For instance, let us take the Tamil Nadu circle. The ... More

INSIGHT

MF asset information: AMFI must make them comparable
THE asset base of the mutual fund industry at the end of March 2003 has been placed at about Rs 79,500 crore by the Association of Mutual Funds of India (AMFI). The comparable asset base in March 2002 was at about Rs 1,00,500 crore, indicating ... More

Peer comparison beats benchmarks
A CURSORY look at the performance of balanced funds and income funds will tell you that almost all of them have outperformed their respective benchmarks. However, the benchmarks do not seem to be proving useful. Sample this. Alliance 95 ... More

SEBI must borrow the SEC stick
TEN investment-banking firms in the US have been forced to cough up $1.4 billion by way of disgorgement of profits (taking away undue gains), as penalties and for funding independent research and investor education. These relate mainly to the ... More

Steel revival package: Recasting to strengthen
THE domestic steel sector has had another dose of good news with the possible finalisation of the second tranche of the industry's debt-restructuring package. With the latest announcement, the Government has clearly signalled, and reiterated, ... More

MUTUAL FUNDS

Alliance MIP and Templeton MIP-Growth: No match for income schemes
Alliance: Sell
Templeton: Sell More

Income fund expenses: Investors stuck with high costs
AT A time when the returns generated by mutual fund income schemes are declining sharply, their expense ratios are proving to be sticky. With bond portfolios expected to earn about 6 per cent over a year, the high level of expenses could plunge ... More

Tata Life Sciences and Technology: Pare exposures
INVESTORS in Tata Life Sciences & Technology Fund can consider paring exposures. The fund has done better than most other sector-specific schemes. But its portfolio resembles that of a diversified fund. This is due to the rather liberal ... More

Investing in fund of funds
SEBI has cleared the proposal for fund of funds in India. It is a mutual fund that invests in other mutual funds. Why invest in fund of funds? Suppose you have Rs 50,000 to invest. Will you prefer to invest it in just one fund? You may not ... More

Birla Equity Plan: Pare exposures
INVESTORS can use the spike in the net asset value (NAV) of Birla Equity Plan over the past seven months to pare exposures. Though the fund has outperformed the majority of its peers over the past six months, it has trailed quite a few ... More

HDFC Tax Plan 2000: Hold/Avoid fresh exposures
INVESTORS in the HDFC Tax Plan 2000 can stay invested. The fund has performed well since launch, and has turned in returns of 13.1 per cent since January 2001. During the same period the market has been down about 12 per cent. The fund has ... More

STOCKS

Alfa Laval: Buy
INVESTORS can consider fresh exposures in Alfa Laval at Rs 233. At the current market price, the stock is trading at 8.5 times its trailing 12-month earning per share. The stock appears attractive at this price considering the good order book ... More

Grasim: Buy
INVESTORS can cement their stake in the Grasim stock, especially by taking advantage of any declines. Fundamentally, the company is on a solid footing. Generating loads of profits — sustainable earnings are up 40 per cent — and cash ... More

MICO: Book profit and re-enter at lower levels
AIDED by sharp growth in earnings, the MICO share price has moved by about 27 per cent since our earlier buy recommendation (Business Line, January 3, 2003). Existing holders can use further rise in the share price to book profits in ... More

Ashok Leyland: Hold
ASHOK Leyland's(ALL) performance in 2002-03 clearly reflects the resurgence in the commercial vehicles industry. While the top-line revved up 17 per cent to Rs 3,074 crore, the post-tax earnings accelerated 30 per cent to Rs 120 crore despite a ... More

Cipla: Hold
SHAREHOLDERS in Cipla can continue to retain their holdings. But no fresh exposure need be considered at this juncture. The stock trades at a price of Rs 631, which is 15.2 times its earnings per share for year-ended March 2003. VAT issues: ... More

Sundram Fasteners: Book profit
BUOYED by improved performance, the share price of the company has appreciated by about 30 per cent since the earlier buy recommendation (Stock Focus Column, edition dated June 16, 2002). Taking into account the sharp rise in share price in the ... More

TAXATION

Deferred tax accounting: Debit companies, credit investors
IT DEALT a body-blow to the profits of quite a few corporates in 2001-02 and sent several companies scurrying to the courts to stop its application. It is now two years since the new accounting standard on recognising deferred taxes became ... More

Why account for deferred taxes?
THE term "deferred tax" may sound ominous enough to put off all but the most ardent of number-crunchers... but it is not rocket science. Here are some FAQs. What are deferred taxes? The need for deferred tax accounting arises because ... More

CARS

Grand Vitara XL-7: Maruti times luxury drive right
SLOTH and the `we know the customer best' attitude are two characteristics that a company which is a market monopoly unfortunately tends to acquire. These stifle innovation and invariably lead to an erosion of market share. For quite some time, ... More

LIFE INSURANCE

Tata AIG's Assure Educare
Assure Educare is a child endowment policy from Tata AIG. It comes in two variants: Educare 18 which matures when the child grows up to be 18, and Educare 21 which matures at age 21. How it works? Educare is an ... More

STOCK MARKETS

Positive outlook for ITC, Infy
NIFTY (938.3): As anticipated, the index ruled firm and also managed to move past the first resistance level at 934. The near-term outlook for the Nifty continues to remain positive. A move towards the 955-960 range appears to be on the ... More

Bullish trend in HDFC Bank
THE stock market sentiment remained firm during the just concluded week. Initially, the old-economy heavy weights provided stability to the benchmark indices while the technology sector donned this role on Friday. Sensex (2966.6): In ... More

Nasdaq: Uptrend may persist

DERIVATIVES MARKETS

Futures in backwardation
THE trading in the F&O segment was lacklustre the whole week, with volumes dropping every day. Total turnover was down by 42 per cent on Friday as compared with the previous week. Nifty futures: The Nifty spot closed the week higher by ... More

Capturing dividend using options
OPTIONS can be used for multiple purposes. One common usage is for capturing directional movements. Depending on the investor's expectations of the movement of the underlying stock, positions are taken in the options market. Another usage of ... More

DO THE DERIVATIVES
Puts: Protected downside
X, a farmer, is worried that the price of tomatoes, which are now in the 300 - 320 range, will fall in the near future. Therefore, he calls a vegetable dealer and strikes a deal with him to sell the tomatoes at Rs 250 per box, in case he does ... More

Options guide

FIXED DEPOSITS

M&M Financial Services: Ride on
THE fixed deposit programme of Mahindra and Mahindra Financial Services (MMFSL) is a good investment option. The interest rate on offer is lower than that given by companies such as Ashok Leyland Finance. However, given the revival in auto ... More

INTERVIEW

`Efficiency, cost-control key to viability' — Mr Anil Singhvi, Executive Director (Finance), Gujarat Ambuja Cements
Gujarat Ambuja Cements has weathered a difficult period on the pricing front with considerable comfort. Mr Anil Singhvi, Executive Director (Finance,) provides insights on the company's strategies in tackling the industry situation. In ... More

COMMENTARY

Cipla sheds 10 pc on disappointing results
Cipla (Rs 632): The stock price of Pharmaceutical manufacturer Cipla fell by 9.9 per cent this week on the back of disappointing quarterly results. For the quarter ended March 2003 the company posted a net profit of Rs 46.7 crore as ... More

INCOME TAX

Handling short-term capital losses
I am a salaried employee. How is the short-term capital loss incurred by me going to be treated for tax purposes? Rakesh Reply At the outset it may be mentioned that the treatment of short-term capital loss for tax purposes will not ... More

NRI deposits and capital gains
IS interest from NRE deposits and NRNR deposits exempt in the hands of a non-resident? An assessee has filed a return showing a refund due from the department. This refund has still not been granted. The refund relates to one of the earlier years ... More

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