Another fuel price hike likely, says Moody's

India may go for another round of hike in energy prices as global crude prices continue the upward swing, says credit rating agency Moody’s. "As global prices continue to soar, the government will likely announce further increases in energy prices and cuts in subsidies," said a report by Moody’s Economy.com, an associate of Moody’s.

After much dilly-dallying, the government had earlier this month announced hike in price of petrol by Rs five a litre, Rs three for diesel and Rs 50 for a gas cylinder to help oil marketing companies partly meet their under recoveries because of surging global crude prices.

The government still gives Rs 300 subsidy for a gas cylinder.

The government had to face an all-round criticism for its move to raise petrol prices and even Prime Minister Manmohan Singh addressed the nation to explain the rationale for the increase.

Following the appeal of the Prime Minister, many states also cut sales tax on petroleum products to blunt the impact of fuel price hike.

Moody’s further said authorities would continue to hand out assistance to the poor households while trying to tame inflation, given that price rise is the biggest obstacle of the incumbent government in restoring voters’ trust in the lead up to the general election.

Global crude oil prices were ruling above 138 dollars a barrel on Thursday.

Top 8 money tips for NRIs

NRIs, have you’ve been toiling hard to rake in that extra bit but unable to fathom where all your money disappears by the end of the month? Chances are there’s a money leak. Fix it right away with a financial budget before your expenses balloon to unimaginable proportions leading you to a debt trap.

A financial budget can help you set your finances in order. It’ll help you allocate your income appropriately among your needs, wants and desires enabling you to meet your financial goals easily.

Here’s how NRIs can go about managing their finances:

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  Ascertain your total income: Jot down all your sources of income. Apart from your regular employment, your part time jobs, dividends, interest income from investments are all sources of income. Total them all.


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  Save atleast 20% to 30% of your gross income: Says Kairav Shah, Vice President, Personal Finance, Apnaloan.com, “Make it a point to set aside 20% to 30% of your total monthly income towards savings always. Leave this money untouched. And depending on your age, goals and risk profile invest this amount in mutual funds, equities, fixed income among others.”


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  But then do you have a good support system in place? For instance if you’re living in places like Australia wherein children’s education, retirement, health are supported by the government there’s not much to worry. States Shah, “If you’re covered under a social security in whichever country you reside, you may reduce the said percent by about 5%.”


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  Buy property at the earliest: NRIs, buy a home at the earliest wherever you stay outside India. Opines Shah, “Most NRIs make the biggest mistake of not buying a home in the foreign country they stay and continue to live in rented apartments for long periods. You must consider buying a home at the earliest. This is because over a period of time property gets expensive, and if you continue to wait, back home too you’ll not be in a position to buy on your return after several years since by then the same may get unaffordable. You’d lose out both ways.”


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  Are you spending on a need or a want? Paying up your monthly rent, electricity and grocery bills are all needs you can’t do without. But you can surely cut down on your several outings at expensive restaurants and shopping sprees that burn a deep hole in your pocket.


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  With several malls around convenience is in, no doubt. But think. Are you buying goods that you really need or are you following herd mentality? Have you used that food processor you bought last Christmas or is it still lying in a sealed pack in the corner of your kitchen unused? Analyse your past purchases and you’ll know your spending habits.


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  Put off impulse purchases: Do you go berserk when you hear of heavy discount offers, free gifts and cashback schemes. Stop! Simply put off impulse buying. That buy-one get-one free offer may not be as good as it seems. Besides, give a thought – do you really Need that shirt now or do you Want it because it simply appears to be a good offer?


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  Follow the 60:30:10 ratio: Try maintaining a ratio of 60:30:10 between your needs, wants and desires. Maintain a list of each of your expenses howsoever insignificant they may seem. And you’ll know how much you’ve ended up spending on items you don’t really need. Segregate the fixed and variable expenditure. While there’s not much you can do with the former, you can easily fine-tune your variable expenditure.


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  Contingency fund is a must: Financial emergencies such as loss of employment, illness in the family, accidents etc can spring up unpleasant surprises just anytime. You need a contingency fund that can take care of sudden financial needs. Opines Shah, "Keep aside three to six months of your income for emergencies. And you won’t have to dip into your savings in case of a financial crisis."


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  Stick to your budget, review regularly: Creating a budget is easy but its hard to stick to it. Ascertain each time how closer you have been to your laid out plan. Make necessary changes wherever needed, fine tune and stick to your budget always come what may. Do a review to find out how far you’re on track and whether there is a diversion at all. If yes, make up for the same in the next month and soon you’ll be on the right track to achieving your goals.

Retirement planning tips for NRIs

‘I am just 30 years old, why do I need retirement planning?’, remarked Sachin Karkera, an NRI who has been in the Information Technology industry for the last five years. With the recent salary boom, Sachin aspires to buy a luxury four-wheeler within a year and is already paying the EMIs for his house.

He has also started planning for his one year old son’s higher education after witnessing the alarming rise in education costs. “I’m already trying hard to save for my present goals. Do I need to think of retirement planning now which is still at least 20 years away?” he retorts. But at the same time, Sachin is also content that he has been contributing Rs 15,000/- annually towards a retirement plan that started last year.

Retirement Planning is usually the most neglected savings motivator for Indians. Studies say that old age security as a savings motivator ranks far below than saving for expenditures such as children’s education, wealth creation and even unforeseen financial emergencies.

The growing need for higher education has led today’s professional to begin his career when he almost turns 25 years of age. Further, due to stressful and hectic life styles, the same professional desires an early retirement, sometimes as early as 50.

Advancement in the field of medicine helps us live longer, to almost an average life expectancy of 75 years. Which means that a professional has not only to earn for his life during his (shortened) working life (of around 25 years, as cited above) but also to provide for his retired life, which typically extends to another 25 years. Even worse is the case with nuclear families setting in.

Paying a small premium towards a pension plan to secure tax benefits under section 80C is the only step directed towards saving for one’s retirement, but the repercussions of the same will be realized only at the time of retirement, and by then it’ll be too late.

So, when is the right time to start retirement planning?

Ideally, retirement planning should begin when you start earning. For, that way you gain the most from the power of compounding of money. Even small amounts that you set aside early in life can work wonders for your retirement kitty.

How do I plan my retirement?

Planning Basics: While planning your retirement take into account the standard of living you expect at the time of your retirement, the sources of income available, inflation rates, need for lump sum amounts, need for rising medical costs, existing retirement plans among others. Create a plan and maintain discipline by adhering to the same.

Ascertain how much you’ll need: For example, lets say if you presently need Rs 2,40,000/- per annum (Rs 20,000/- per month) to maintain your lifestyle, on retirement at age 50 years, you will require approximately needs Rs 10,30,000/- per annum at an average inflation rate of 6% per annum.

Note that the said amount does not take into account any upward trend required in the standard of living. Now to save towards the abovementioned amount you need to set aside Rs. 47,500/- per annum (around Rs. 4,000/- per month) at a growth rate of 15% per annum and that’ll help you meet your budgeted retirement corpus. If you delay saving the said amount by another 10 years, you’d need to treble the required contributions per year.

Speaking about Sachin, no doubt, it may be too early for him to estimate his retirement expenses or his sources of income available during his retirement, but making an early beginning would help him reap the benefits of compounding of money.

When it comes to retirement planning making an early and planned beginning is important if your aim is to have a blissful retired life. So wake up, plan your retirement right away before its too late.

Investment Schemes for NRIs in India

Exciting times ahead for NRIs! The government of India has, in the recent past, opened up the economy for Foreign Direct Investment (FDI). Huge efforts have gone into mobilizing and formulating specific schemes that will attract FDI for various sectors of the Indian Economy.

BANKING

As an NRI you can hold a variety of accounts, making it easier for you to choose the one that suits your requirements. For example:
Foreign Currency (Non-Resident) Accounts [FCNR]
Non-Resident (External) Rupee Account [NRE]
Ordinary Non-Resident Rupee Accounts [NRO]
Non-Resident Non-Repatriable Rupee Deposit Accounts [NRNR]
Resident Foreign Currency Account [RFC] for returning Indians
Banks are further authorized to grant loans/overdrafts to NRIs/PIOs, both on a repatriation or non-repatriation basis. But remember that these loans are granted in Indian rupees against the security of their deposits in NRE/FCNR accounts.

HOUSING

NRIs never had it so good! Several housing finance institutions, those approved by the National Housing Bank, as well as the commercial banks are authorized to grant housing loans to NRIs/PIOs. The terms of repayment are the same as those applicable to Indian residents! The rate of interest on the loan is as per the directives issued by the RBI or the National Housing Bank.

INSURANCE

Several insurance companies such as The National Insurance Company (NIC) offer special insurance schemes to NRIs for personal accidents and also in the event of death.

EDUCATION

A maximum of 15% seats are reserved for the children of NRIs/PIOs in private medical and dental colleges in India. However, in other universities and colleges, NRI students are admitted according to the policies of the government of India. In this case, they need to pay the same fees as are applicable to Indian students.

OTHER SCHEMES

The Indian government offers special schemes for investment, such as NRI bonds and India Development bonds. NRIs are allowed to invest in establishment of schools and colleges on repatriation as well as a non-repatriation basis.

The government has also started issuing PIO cards to people of Indian origin who hold foreign passports and are living abroad. The cardholders are entitled to a range of educational, financial and cultural benefits in India.

How many credit cards should NRIs own?

Do you own more than one credit card? Perhaps you’ve been saying yes to all those so called lifetime free cards. Credit cards can be a great financial tool if used responsibly but can prove to be disastrous if handled carelessly. So what’s the ideal number of cards one should own? And what are the ways to manage them?

According to experts you can own multiple credit cards and make the most out of the free interest period, the reward points, the discount offers that come along provided you are smart enough to pay up your total outstanding on the due date.

Says Jeet Shah, certified financial planner, “To play safe, keep two credit cards. And segregate your expenses on the basis of small and big time purchases. Preferably keep one card for buying grocery, clothes among others at supermarkets and utilize the other card strictly for high end purchases that can go over Rs 25,000/- such as a home theatre, a TV set, computer and the like.”

Managing multiple credit cards also means keeping track of the due date, interest free period, the maximum credit limit among others. But then there are other benefits too. For instance you can easily split the huge cost of big ticket purchases between two cards. That way you don’t have to worry about exceeding the maximum credit limit on one card.

Do you roll over credit? Stop right away: But if you lose track, the repercussions can be huge. If you’re an impulsive buyer, chances are you’d simply go on a shopping spree not giving a thought to the huge bills. You may start postponing your payment and soon over a period of time you’ll realise that you’re already neck deep in debt. To avoid such situations, simply pay up your dues fully on your due date. And yes, keep away from rolling over credit.

Good credit paying history? Expect rewards galore: Also, considering your good payment history, your credit card issuing company may choose to reward you by increasing your credit limit. Which means, rather than go in for multiple cards you can easily get an increased credit limit on your existing card. So use credit responsibly and rake in the most from your credit card.

Investment mistakes NRIs should avoid

Absence of a goal: Not chalked out a goal yet? What’s holding you? Before you park your money blindly in stocks, fixed deposits or the like ascertain when you’d need it. Do you have atleast three to five years? Or would you need your money before that?

For, your money will be able to work more for you that way. If you have a time period of atleast around a year, consider investing in equities. If you think you’d need your money before that, liquid funds are for you. Equities outperform all other investment avenues easily in the long run. And if age is on your side and you’re considering a long time horizon, plunge into equities head on.

Absence of an emergency fund: No emergency fund yet? Life is unpredictable. Set aside funds for an emergency right away. Put aside atleast three months of your monthly expenses if you’re single. And if you have dependents, invest a minimum of six months of your monthly expenses in a liquid fund. You could park your money in flexi deposits, liquid mutual funds to name a few. But take into account the tax implications.

No insurance cover: Not given a thought to insurance yet? You’re not alone. For most, insurance is just another tax saving avenue. But reality dawns when illnesses or death strikes. And by then its too late. Insurance is your safety net that’ll help you handle uncertainties of life with ease. Insure yourself right away if you have dependents. Buy a pure risk cover for the maximum term possible. It’s the cheapest insurance you can buy. A pure risk cover is a must if you have liabilities such as a loan. If you’re a male aged 25 years of age you would be able to easily get a pure risk cover of Rs 10 lakh for an annual premium of around Rs 2,600/- for a 20 year term.

Being too greedy: Who doesn’t want to rake in the most moolah from his investments? But then, opines Bijal Bakhai, certified financial planner, “When your investments have already raked in high returns, it makes sense to slice and book profits. If you wait further to make more, chances are you may end up losing even what you’ve earned. So be contented. If you’ve invested in equity for a year, expect around 18% to 24% and in case of debt expect returns of about eight and a half percent”.

Selling at panic: Collective selling, acting on rumours without basis is akin to herd mentality and can prove dangerous. The stock market is not for the weak hearted so analyse the situation and decide whether to stay invested or ship out.

Borrowing for speculative gains: Banks do offer loans on securities no doubt, but borrowing heavily for speculative gains may mean taking high risks and can ruin your future financially.

Timing the market: Its time in the market and not timing the market that helps you gain the most. Experts have time and again stressed on how even the so-called veterans have not been able to succeed at this one. So don’t ever time the market. Believe in long term investing and watch your investments grow.

How to prepare for the date with the taxman

Come June/July and the salaried and self employed individuals start bracing themselves to file their income tax returns (ITR) for the previous financial year. The last date for this annual ritual, falls due on July 31. Even though tax has already been deducted from income and there is no further liability to pay tax, there is still a need to file ITR.

If taxable, income during FY07-08 exceeds the exemption limit of Rs 1,10,000 (Rs 1,45,000 and Rs 1,95,000 in case of a women and senior citizens, respectively, resident in India), there is a legal obligation to file ITR.

Get ready to file ITR as early as possible, instead of waiting for the due date to arrive. For this purpose, keep all documents, (viz: Form 16/16A, bank account summaries and details of property, rental income, etc) ready and handy, before calculating tax liability and filling ITR. Often, interest income on savings bank account and FDs and income of minor children is overlooked while filing ITR. Such income is taxable and any omission could attract penal consequences.

Additionally, individuals are required to furnish information on specified transactions in ITR, which are currently being disclosed through Annual Information Return (AIR) by the specified parties. Although, not yet mandatory, the new ITR can also be filed electronically. If uploading is without digital signature, one needs to print Form ITR-V and submit the same to the tax office, alongwith the ITR, within 15 days of e-filing of ITR. Here, the process of filing ITR gets completed only upon physical filing of ITR-V.

E-filing is more convenient and involves no personal interface with the tax office staff. The return can be filed anywhere and anytime. Currently, however, the e-filing scheme is restricted only to tax payers, who are assessed or are assessable to tax at any of the 60 cities specified in schedule A of the Notification No 1073(E) dt: 30/9/04.

All capital cities of major states and other large cities in all states find place in this notification.
Tax payers may face some problems while filing their tax returns, such as frustratingly slow downloads and a very high uploading time. The portal often hangs up upon minor typewriting errors.

Under physical filing, the individual has to file the respective ITR along with the Acknowledgment form with the Tax Officer. The return needs to be signed and verified by the tax payer personally. The CBDT has not provided any clarification on the problems/issues faced by an individual while filling up the information in the ITR.

For eg: on debatable tax claims, which are subject to differing interpretations, the individual may wish to make the claim by putting appropriate notes, or disclose certain facts, in the ITR, in order to avoid any penal consequences for concealment. However, making suitable disclosures of such claims in the ITR, is practically impossible, as no enclosures are permitted to be filed with the ITR. With the introduction of the Tax return preparers (TRP) scheme, tax payers can seek the assistance of TRPs for filing their ITR.

Late night snack kills sleep: Study

Is the Euro 2008 fever keeping you awake? Make sure you stay clear of that bowl of chips and repeated refills of cola while catching the football action. An international study, released on Wednesday, says that late-night snacking and a high fat diet through the day lead to poor sleep at night.

According to researchers at the Federal University of Sao Paulo in Brazil, positive and statistically significant correlations were found between total energy intake, late-night snacking and repeated awakenings during sleep.

The study focused on 52 healthy volunteers between 20-45 years of age. Their food intake was analyzed by a three-day food record. An overnight polysomnogram or sleep test was performed to determine their sleep pattern. Said lead author Cibele Crispim, "We found that increased fat intake was associated with a lower percentage of sound sleep, a higher arousal index and increased sleep apnea. This confirms that high fat intake and dinner fat intake negatively influence the sleep pattern."

The findings were announced at Sleep 2008, a global meet of professional sleep societies in Baltimore, US.
An adult needs roughly eight hours of sound night sleep to feel fresh.

Nutritionists say chips and cola taken at night can make people toss and turn in bed. The reason — fried food and drinks that contain caffeine take 12 hours to digest as against fruits that take half an hour and raw vegetables that take an hour.

"When we consume fried food late at night, the digestion process takes place constantly within us, seriously affecting our sleep. We recommend a person should hit the bed at least three hours after the last meal. Fried food late at night also leads to acidity that again hampers sound sleep and adds to your body weight," Dr Charu Dua, chief nutritionist at Max Hospital, told TOI.

An Indian adult should acquire 1,600 calories a day through his diet while a woman should get at least 1,400 calories. Recommendations say less than 25% of our diet should be fat.

However, when we consume just 10 pieces of chips, we take in 4 grams of fat that translates to 36 calories.

"Usually we consume hundreds of strips of chips every sitting, meaning we are taking in roughly 40 grams of fat or 360 calories. Usually in an Indian palate, 45% of the food consumed is fat, which takes our calorie consumption to more than 2,000," Dr Dua added.

When the Brazilian team analyzed data of people who consumed fatty food all day and tried to sleep, they found that these subjects woke up more times, tossed and turned through the night.

There was also greater chance of abnormal breathing while sleeping in this group. They also spent less time in REM (rapid eye movement) sleep each night. REM sleep is the sleep state during which dreaming occurs.

Bad diet therefore causes sleep debt. And when it becomes high, it leads to sleepiness that occurs when you should be alert and interferes with daily routine and activities, reducing your ability to function. It has a powerful negative effect on your daytime performance, thinking and mood. Inadequate sleep decreases performance, concentration, reaction time and causes memory lapses, accidents and injuries.

Oral sex, throat cancer linked

Growing prevalence of oral sex may be leading to an increased incidence of throat cancer, according to a new study. In the study, a virus called human papillomavirus (HPV), contracted through oral sex, was found to be a much stronger risk factor than tobacco or alcohol use. With 6,000 cases per year and an annual increase of up to 10% in men younger than 60, some researchers believe that the HPV-linked throat cancers could overtake cervical cancer in the next decade.

"It’s almost a new disease, in a sense. It’s now becoming a dominant sub-type of the disease that we see in our clinic," the Age.com.au quoted Dr Ezra Cohen, an oncologist at the University of Chicago Medical Centre, as saying.

The HPV infections likely took root decades ago as the Baby Boomers were reaching adulthood, and only now are spurring a rise in throat cancer cases. Experts suspect that the reason behind the increase is the changes in sexual practices that emerged in the 1960s and ’70s.

Returns from fixed deposits turn negative

As inflation breached the psychological level of 8% and settled at 8.1%, real interest rates on long-term bank deposits have turned negative after a gap of nearly three-and-half years. Last time, this phenomenon happened in December 2004, when the point-to-point wholesale price index was at 6.7% and term-deposit rates remained in the range of 5.25-6.25%, according to Reserve Bank of India (RBI) statistics.

The present negative returns on public savings in select maturities have fuelled an all-round expectation of a rise in deposit rates, especially with State Bank of India (SBI) biting the bullet. ET spoke to a cross-section of bankers and financial market players on the issue of real interest rates.

A majority agreed to the economic logic of rising deposit rates to cover inflation. But it appears that banks are unlikely to follow the country’s banking leader in this aspect, as there is no dearth of systemic liquidity in the absence of significant credit demand.

Interestingly too, as an economist with a leading bank explained, interest sensitivity remained pretty low in the country and banks were unlikely to witness an ebb in deposit collection even with real interest turning negative.

Be that as it may, real interest rates have turned negative for select long-term deposit products offered by Axis Bank, Bank of Baroda (BoB), HDFC Bank, ICICI Bank and United Bank of India (UBI). For instance, the returns are negative for over three-year maturities at Axis Bank, for over five-year maturities at BoB and for 1-3-year maturities at UBI.

Last time round, deposit rates on inflation-adjusted terms remained negative for the entire second half of 2004.
During that time, the key inflation index sea-sawed between 6.7% and 8.5% and deposit rates were kept below the inflation rate without having any significant impact on mobilisation. Now, the price index has again touched 8.1% for the week ended May 17, the highest in 45 months. It rose from 7.82% in the preceding week.

Union Bank of Indian chairman and managing director MV Nair said: “It is advisable to watch the inflation scenario for the next couple of months to take a decision on deposit rates.”

Allahabad Bank chairman and managing director AC Mahajan said: “The bank’s asset and liability committee met on May 27 and has decided to keep the rates unchanged at the current level.”

Real interest rates on short-term deposits (less than one year) have been negative for quite some time now. However, short-term interest rates reflect merely demand and supply factors.

“People keep funds at short-term instruments for liquidity and transaction and interest on such instruments is merely incidental and not meant to cover inflation. Long-term rates should reflect that,” a senior executive at Bank of India explained.

SBI, on the other hand, had to increase its deposit rates to attract resources to meet the short-term credit demand from oil marketing companies, in the light of rising crude oil prices. National Commodity & Derivatives Exchange chief economist Madan Sabnavis said: “As such, there is no significant credit demand and there is ample liquidity in the system. So, banks are unlikely to raise deposit rates hereon.”

Investment banking company Centrum Capital managing director TR Madhavan said: “Banks should have a need for short-term funds before they raise deposit rates. Seemingly, they don’t require it at this juncture, given the current liquidity in the system.”

A rise in deposit rate typically means more pressure on lending rates to cover the cost. But the signal from the Reserve Bank of India is indicating a softening of lending rates. So, banks are busy in protecting the interest rate margin.

Thanks to inflation, you are losing money on FDs

Inflation is no longer just eating into your pocket by way of higher grocery bills. It’s also eroding the money you’ve safely put away in a fixed deposit in your bank or post office. That’s because at 7.61%, it is more than enough to offset your interest earnings, giving you negative real returns.

Most banks offer interest in the range of 8% to 8.75% on fixed deposits of tenures ranging from one year to 10 years.

The country’s largest bank, SBI, for instance, offers 8.5% on deposits of two years or more, while for shorter duration deposits, it gives 8.75%.

That may seem like it still gives you some positive real return after accounting for inflation, but that’s an illusion for most.

This is because the interest income is taxable, even if your deposit is covered by Section 80C of the Income Tax Act.

If your annual income is above Rs 5 lakh, the tax deduction would be at 30.9% (including education cess), which means the effective interest income comes down to 6.05% if the nominal rate is 8.75% and to 5.87% if the rate is 8.5%. In either case, the current level of inflation more than wipes out this return.

Even if your income is lower, between Rs 2.5 lakh and Rs 5 lakh per annum, where the tax rate applicable is 20.6%, the effective interest rate would be between 6.75% and 6.95%, again not enough to give you a positive real return on your deposit.

Real estate and gold, which typically appreciate fast in inflationary periods, are possible options that are relatively risk-free.

Equity could be another option, but that requires a different kind of risk appetite and more in-depth knowledge of the market.

With an annual income below Rs 2.5 lakh current levels of bank deposit rates and inflation give you a marginal positive real return.

With a tax rate of 10.3%, your effective interest earnings on deposits would be between 7.62% and 7.85%, barely allowing you to keep your nose above water.

How to steady your investment ship in a stock market storm

Every equity investor is a long-term investor until the market falls. Rahul Ahuja is one such investor. He ( all of 40 years old) is a small business owner who seemed to understand the risk associated with the equity markets. His equity exposure kept going up last year with the booming stock markets and there was a point where he had around 95% allocated to equity.

“Oh, I am a long-term investor and I can afford to take risks,” Rahul used to say. However, saying that you can stomach volatility and actually going through it are two different things. After seeing his portfolio plummet by 40%, his long term seems to have changed from 15 years to 15 weeks.

One of the key things that investors like Rahul forget is that emotions play a very important role in the investment process. However, the cardinal rule is to remember that when the markets are good, be cautious and when they are sad, rejoice and enter them.
Up until the start of the year, people were exuberant about equities as an asset class and would sing praises of the opportunities available in the Indian markets. Similarly, it had become an expected norm that equities would go up by 30% every year. When the reality has now hit most investors that markets cannot go up forever, they worry about their investments and wonder whether they should have been in equities at all. This is precisely where most people go wrong and you should enter the market in a staggered manner regularly on every sharp fall.

No structural bull market goes up in a singular and linear fashion. There are periods of irrational rises and intermittent sharp corrections. The market rose very quickly from 15000 to 21000 but it took only a few weeks to come back to 15000 levels. We are in a situation where the market is treading the water for a while before the next up move can begin.
The key questions: Have we hit the rock bottom and if yes, when will the next upward move begin? Frankly, there are no straight answers for these questions. But then, don’t let the fear of the markets threaten your investments. If you have started an investment programme, don’t just change your tracks just because the markets have changed their tracks.

Look at what has really happened and see how best you can benefit from it. Investing is a continuous learning process. You learn all the time but your best lessons will always be learnt in the backdrop of such sharp and broad corrections. These are times when you also understand that the promises of highest returns that brokers, fund houses, insurance companies, and agents have been doling out were actually nothing but lies of the highest order. You learn to question your own decision-making process and how relying on fancy projections can be injurious to your financial well-being.

You need to do an honest introspection of your own emotional behavior and how you really react under pressure. Understand how you have reacted during previous falls and rises. Analyse your self critically in the context of your equity investments and overall portfolio. Based on your responses, you should decide whether you can ride tough times, or look out for exit opportunities or a combination of both.

People who have seen and done it before will vouch that big money in equity markets is mostly made by a few people who buy through the bad times and ride it till there is a reversal of fortune. As long as India continues to grow at 8%, we will just get bigger and better.

Asian real estate mk't to address climate change

The real estate markets around Asia and the world will transform quickly and adopt "green building practices," both in developing new buildings and improving existing ones, as new government policies drive progress towards addressing climate change and other key environmental issues.

"This transformation will be driven by various combinations of regulation, government incentives and changing market dynamics", according to r.e.design, Asia’s first green real estate guide released here today.

"Tenants, in turn will also help drive the Green Real Estate growth through their corporate social responsibility programmes, desire to attract and retain quality employees and aspiration to improve productivity", says the guide that outlines the urgent need for the real estate industry to address the challenges of climate change and sustainability.

"Green buildings are set to become standard practice and we need to quickly understand them, including how they deliver value to us. The uptake of green building practices in India is now quick and real estate practices are changing accordingly", said Simon Carter, author of the guide and Regional Head of Sustainability Asia Pacific for Collier International, leading property consulting companies.

India currently has about 26 built green buildings covering close to 11 mn square feeet. Out of these five buildings have secured platinum or gold Leed ratings. Currently, 218 buildings have registered themselves to obtain a green certificate, with Mumbai leading the pack with 51 buildings, followed by Chennai at 35. Bangalore has close to 12 buildings registered for receiving the certification.

"The green market in India started with the developed world shifting some of its back offices to India. Unlike other markets, the growth in green buildings is largely driven by occupiers", said Joe Varghese, MD, Collier International India, while making out a case for green estate.

On the cost factor in investing in green buildings, Carter said "Over-focusing on costs can be very misleading. When markets transform, it is the cost of not having a green buidling to lease or sell that will be a matter of concern".

While some of the green buildings may have an initial cost, premium attached towards its construction as compared to conventional buildings, in the long run these buildings could save up to 40 to 80 per cent of energy cost. The energy requirements of some well designed green buildings around the world was as low as 15 per cent than that of a conventional building, said Carter.

"In the changing climatic situation, we need to redesign our buildings and also redesign the way in which we transact, develop, value and manage real estate", he said adding that 9.9 per cent of residential and 5.4 per cent of commercial buildings account for world green gas emission.

Blindly aping the west, may not be the solution to the problem, said Joe underlining the need for coming out with local green solution to address the problem in India.

Speaking about the guide, Carter said it is intended to assist investors, developers and occupiers design strategies that manage the risks and leverage the long term value for their real estate. At its core are four key guides for managing green, developing green, occupying green and creating green and finally living green, he said.

The guide provides tips to save energy, manage waste, reduce operational cost, he added.

Sensex will range between 14000 and 18000 this year

Overseas investors are still bullish on India. But further investments will depend on how the Indian market pans out in the coming months. My view is that over the next one year, market will range between 14000 and 18000,” Kotak Mahindra Bank head of international business Paul Parambi told ET in an exclusive interview. “With regards to corporate earnings, there will be several sectors like IT and financial services where earnings will taper off,” Mr Parambi added.

What is the sense you get from your overseas clients? Is the mood buoyant or are people wary?

International investors do not have many choices. If they want to invest in a large market with strong long-term fundame-ntals , India is the best bet. Many large investors — especially institutional investors — have identified India as a market of strategic importance. But then new investors will only come in when the Indian market attains reasonable comfort levels. The belief in India is intact, but there are short-term concerns.

Rising inflation, concerns over sustained growth, widening fiscal deficit as a result of surging oil prices and political uncertainties are key concerns of foreign investors. All said, at 15x1-year PE multiple, India is very attractively valued. There are several stocks with good embedded value at PE as low as 13x. Other than India, it is Brazil with its great commodity play that is drawing lots of foreign investors.

What is your take on money flowing out of India?

From what we see, there have been no major outflows (with regards to investments) from India. I am a bit unsure about FII redemptions worth Rs 20,000 crore. Even if there has been a sell-off , it could be on proprietary accounts of foreign investment banks, winding up of participatory notes (PNs) or hedge funds cutting leveraged positions on PNs.

I am not sure if the Rs 20,000 crore worth of investments that have flown out is on account of genuine foreign investors redeeming their portfolios. It is possible that in current markets foreign investment banks could be cutting proprietary book positions, but I have serious doubts on the theory that states non-institutional foreign investors are redeeming their India investments. At this point of time, there is no other sane market in the world for foreign investors to side-step .

How do hedge funds perceive India as an investment destination? Are they making money in this volatile scenario?

India is clearly a market that is of interest to hedge funds given the size and trading opportunities. These funds take different forms from equity long/short funds to distressed asset funds to convertible arbitrage funds and so on. They can also short the market using the derivative markets. However, making money in this market depends on the skill set of individual managers and the time perspective of their respective funds. Many of the India dedicated hedge funds are really managed by managers with a long-only mind set and I suspect many of them would be finding it difficult to deliver the returns expected by their investors.

P-Notes and their impact on the equities market?

I think, repealing PNs was the right move as direct investment through FIIs and through the sub-account route is a much superior route from the regulatory perspective for investing into India. But, while repealing PNs there needs to be a simultaneous opening up of the sub-account route for investing into India. The notification on sub-accounts has come out only recently and the inflow from new sub-accounts should now commence.

There are two concerns plaguing foreign investors. The first one is where FIIs have to give an undertaking to Sebi that their sub-accounts have not issued any offshore derivative instrument including participatory notes, or purchased them from non-resident Indians or resident Indians.

Food crisis: Is the world ganging up against India?

Is the world ganging up against us? It seems so, if you read between the lines of statements made by the US president and officials in the recent past. First, US president George W Bush dropped the bomb by saying that India’s increasing food consumption is the reason for the world food crisis. Then cam his secretary of state Condoleezza Rice’s remarks supporting Bush’s statement.

Even though India countered this argument pointing out that the US’s race for biofuel is the cause for the food crisis, the Americans are not ready to digest that. Now, US Under Secretary of Commerce for International Trade Christopher A Padilla has come out against India, saying that the export ban on several commodities by New Delhi will harm its South Asian neighbours and drive up prices rattling the international markets.

In a strong criticism of India’s handling of the food crisis, the US said: “Indian government’s decision to impose certain export bans on non-Basmati rice and edible oils has rattled international market. We can only adequately address this crisis if we discourage continued use of export controls that will harm India’s neighbours and drive up world food prices.”

The US official said while export bans are designed to increase short-term food security, imposing restrictions will make the situation worse.

“Export restrictions take food off the global market, drive prices higher, and discourage farmers from responding to market forces and investing in future production,” he further added.

The world’s largest producers of agricultural goods — the US and India — should refrain from the use of export quotas as it will only exacerbate food shortages and inflate prices.

India is the second largest rice producer in the world, the third largest wheat producer, and the seventh largest corn producer.

India used to provide up to one-sixth of world exports of rice. But after the new export curbs, it will export only around 1 million tonnes of Basmati rice this year.

According to analysts, the reduction is certain to contribute to the rising world prices.

After the US attack came the UN salvo against India. In a recent report, the Food and Agriculture Organisation (FAO) had warned that prices would stay high unless the export curbs are eased. The FAO said: “The pressure would considerably ease if India, which is about to harvest a bumper 2007 secondary crop, would relax its current export curbs.”

Then another global giant in food research, the International Food Policy Research Institute, said that the countries with export curbs are following ‘starve your neighbour’ policies.

Besides the US, there are several other countries which have asked India to lift ban on foodgrain export.

Fearing a global backlash against India, the Centre is also taking steps to check the bad press.

Food and agriculture minister Sharad Pawar had last week said he does not want to continue with the export restrictions once domestic prices ease on better supply.

However, India is yet to lift ban on export of agri commodities. India’s concerns are different. It is facing a 45-month high inflation of 8.24 per cent now. To add to that the country will go to polls in this year. This has caused immense pressure on the present government to control domestic prices of several essential commodities.

During the regime of NDA government, prices had soared and the BJP-led coalition lost the election due to the rising prices. This time around, the Congress-led government is facing the same problem. The finance ministry and the prime minister are desperately trying to rein in the prices, but, as the FM said, the government can do precious little in case of crude oil prices, which may touch $150 per barrel by the time of America’s Independence Day on July 4.

Even while facing criticism of the world, Indian government put up a brave face, saying that India’s ban on food export has hardly anything to do with the crisis. It blamed the US’s blind run for the biofuel, especially ethanol from corn, for the situation.

However, it seems, the world is not listening to India.

India can become the Annapurna for the world

The main objective of Reserve Bank of India (RBI) relate to maintaining price stability and aid the process of generating output and employment. Agricultural prices are really critical for the household budgets of about a billion people in our country. About sixty per cent of our work force in India is dependent upon agriculture and related activities.

Though most policy issues in this regard fall within the domain of governments and universities like yours, the RBI has to monitor the developments and aid public policy through the financial system – especially in terms of price stability, financial stability, financial inclusion and credit delivery.

In this background, while there are many issues in agriculture, I will confine to a few. I will briefly explore the serious problem of food that is confronting the world today. This is followed by a narration of the Indian situation. In particular RBI’s approach to agriculture is described.

Food Prices as a global issue
In recent months, there has been a phenomenal increase in food prices globally. To illustrate, while the global food price index rose on average by 10.5 per cent in calendar year 2006 and by 15.2 per cent in 2007, it has increased by a substantial 40.8 per cent in the first four months of 2008 compared to the corresponding period of the previous year.

According to the Food and Agriculture Organisation (FAO), 37 countries in the world are presently facing food crisis, 31 of which are in Africa and Asia. Last week (end of May) the World Bank unveiled a US$ 1.2 billion fast track funding facility to help combat the impact of rising food prices on the poor. World leaders are currently (June 3-5 in Rome) meeting for a High-Level Conference on World Food Security hosted by FAO.

The summit comes at a time when food prices have registered an increase of 55 per cent, in the last twelve months. The agenda for the summit includes measures relating to augmenting crop production, trade, aid, diversion to bio fuels and increasing investment in agriculture science and technology.

The overall purpose of the High-Level Conference is to address food security issues in the face of soaring food prices and the new challenges of climate change and energy security. The objective of the Conference is to assist countries and the international community in devising sustainable solutions to the food crisis by identifying the policies, strategies and programmes required to safeguard world food security in the immediate, short and longer term.

Undoubtedly, the current global food situation is very serious and hence, we need to understand the reasons for such dramatic increase in food prices in a short period.

First, it is said that rapid growth of China and India is lifting standards of living of millions of people every year thus putting enormous pressure on global demand. It is also argued that the food basket has changed and is contributing to higher demand. However, a closer scrutiny would reveal that enhanced demand cannot explain a sudden spurt in prices in one year since these two economies have been growing at elevated and accelerating levels for over a decade, if not over two decades.
Further, China has been a net wheat exporter and its per capita meat consumption had reached western standards by 2005. India is an exporter or an importer at the margin, except in regard to vegetable edible oils where it has been a consistent net importer in recent years, and also to a small extent in regard to pulses.

Second, the drought conditions, possibly induced by climate change, in some countries like Australia and Ukraine, may provide some explanation for price increases. It is also likely that dwindling stock levels observed in several countries could have exacerbated the scarcity conditions. Further, administrative measures in some countries to restrict or discourage exports of food products might have stabilised prices in those countries but could have enhanced the prices in some other countries. However, these reasons do not fully explain the widespread global increases in prices of all the commodities at the same time.

Third, it is argued that increases in energy costs are resulting in cost push inflation but contribution of energy costs to overall costs in agriculture may not explain the huge increase in food-prices.

Fourth, related to the current elevated energy prices, there has been diversion of corn and edible oils to bio-fuels, which are significantly influenced by policy mandates. Very clearly this diversion to bio-fuel is a policy induced new reality which coincided with price escalation in precisely those products and hence, is noteworthy.

Fifth, the financialisation of commodity trade and current extraordinary conditions in global financial markets could have influenced the spurt in prices. The recent reductions in interest rates in the U.S. and the injection of liquidity have resulted in investors seeking new avenues such as commodity markets, in view of the turbulence in financial markets and the low returns in treasuries.

The relatively easy liquidity and low interest rates, by themselves, make holding of inventories attractive and thus induce greater volatility to commodity markets. The weakening of the U.S. dollar is also advanced as a reason for the recent volatility in commodity markets, including food items. It is evident that this phenomenon is also now coinciding with the across-the board rise in food prices.

In brief, while there are demand and supply side pressures on food items, there is considerable merit in the arguments that recent extraordinary increases in food prices are closely linked to the public policy responses to high energy costs in advanced economies, and the turbulence in financial markets and financial institutions.

It is said that the impact of such policy induced diversion of food to bio-fuels is significant at this juncture and reflects a preference to fill the fuel tanks of automobiles rather than fill the empty stomachs of people.

Similarly, it is sometimes held that the weight accorded to financial stability in public policy may now be at the expense of stability in real sector – especially of sensitive commodities like food. At the same time, there is a general consensus that public policies in regard to food in many economies around the world have not provided adequate incentives to farmers to increase the supply of food and other agricultural products to comfortably match the growing demand over the medium term.

As regards prospects for the near future, there are severe imponderables, especially relating to the path of future prices of oil; progress in restoration of normalcy in financial markets, especially currency markets;and the extent of slow down in the U.S. economy and its consequential impact on the world economy as a whole. Further, public policies in regard to food, especially diversion to bio-fuel; cross border trading; subsidies; and replenishment or use of buffer stocks; would impact the evolution of prices globally.

However, the redeeming feature is that supply response in regard to food grains is possible in a year or two. As per FAO estimates, wheat output is set to achieve a new record in 2008, though against the backdrop of deeply depleted stocks. Global production of rice in 2008 is expected to be marginally better than the previous year and hence, some depletion of stocks held may be expected. Global output of edible oil is anticipated to fall by about three per cent in the current year, and according to FAO, oil seeds and edible oil prices are expected to remain firm.

What is the medium term to long term outlook for food prices at the global level?

According to the Agricultural Outlook from OECD and FAO, while agricultural commodity prices should ease from their recent record peaks, they are expected to average well above their mean level of the past decade. Two days ago(June 3rd) U.N. Secretary-General said, in a speech at the High-Level Conference on World Food Security hosted by FAO that world food output needs to rise by 50 per cent by 2030 to meet rising demand. The implications of such a scenario in global farm outputs and prices for us should be very clear.

With rapid economic growth in our country, the food-consumption will rise in an unprecedented fashion since we are over a billion people. The food basket will also change. We have to augment food supplies within the country since marginal requirements or even a perception of shortfalls in domestic supply in our economy can have significant influence on world prices. As we have over half of the work force depending on agriculture, and as we have scope for increasing productivity in agriculture, there is no reason why we cannot ensure food security for our country, at a minimum. Indeed, India can become the ‘Annapoorna’ for the world and I feel that Andhra Pradesh can become the ‘Annapoorna’ for India.

In this regard, I can do no better than quote Dr. M.S. Swaminathan, one of our esteemed agricultural scientists, “India has the technological and economic capability to demonstrate how farming system can be adjusted to different weather patterns. It is hoped that at the Rome Conference, Indian representatives will serve as a bright affirming flame in the midst of the sea of despair we see around us”.

Indian situation
Let us now focus on the Indian situation. At the outset, it must be recognised that increase in food prices in India in recent months has been only a fraction of that observed in many other countries. In particular, the global prices of wheat and rice had almost doubled between January and April 2008, while in India the increase has been far less than one tenth of that. In a sense, this vindicates the long-standing public policy of emphasis on a degree of food security in our country, especially due to the vulnerability of large segments of the population.

Yet, the prices of food articles spurted in India also in 2006 and 2007. The average annual increase in the Wholesale Price Index (WPI) of food articles was around 7.0 per cent during that period. While increase in the food prices was led by wheat (13.0 per cent) during 2006, rice (6.0 per cent) and edible oil (13.1
per cent) also joined in the price rise in 2007. However, food prices have exhibited some moderation during
2008.

The Wholesale Price Index of food articles during 2008-09 (up to May 17, 2008) has increased by around 2.5 per cent as compared with the corresponding period (3.1 per cent) in the previous year.

Of greater interest may be the current outlook for individual commodities, which appears positive for wheat, with significant improvement in procurement. In regard to rice production which stagnated since mid- 90s, some turnaround is observed since 2005-06.

The prices of edible oil increased sharply in 2006-07 and spiked during 2007-08. However, some moderation has been observed during the current financial year so far.

Due to stagnant levels of production in pulses the demand-supply gap is met through imports, but domestic prices saw a spurt before seeing a decline during the last one year. Prospects for sugar, of which India is amongst the largest producers, appear bright for the current year, since production has risen substantially since 2005-06.

Overall, some abatement of global prices, indication of better domestic supplies and addition to our buffer stocks, along with the series of measures already taken by the government, on the supply side, are expected to yield results in the months to come. Over the medium term, however, the National Food Security Mission launched about two years ago should yield positive results.

RBI’s approach to Agriculture
RBI’s major objectives are to maintain price stability and maintain growth momentum, especially employment generation. In this endeavour, agriculture plays a critical role since agricultural commodities have a relatively significant weight in price indices in our country and also in anchoring inflation expectations. In terms of employment also agriculture dominates, accounting for about sixty per cent of the total, while in terms of GDP its share is less than a third of that. However, the policy space available to RBI is basically confined to managing aggregate demand through appropriate stance in regard to growth in money supply, interest and exchange rates and, to some extent, flow of credit through banks. Yet, in view of the criticality of agriculture, RBI articulates its approaches to agriculture through the Annual Reports.

Let me summarise briefly, the analysis and the views as expressed by the Directors of the RBI in their Annual Reports during the recent past – say last five years.
(a) Since the mid-1990s, the growth of the agricultural sector has not only been low, but also volatile.
The crop yields have shown an unstable trend in recent years. An area of growing concern has been the continued incidence of localised droughts even in good monsoon years. In recent years, the food consumption basket is getting diversified towards value added food products such as meat, poultry, fish, vegetables and fruits. It is important for production to respond to these shifts in consumption.
(b) The share of agriculture in the total gross capital formation (GCF) in real terms has been declining in recent years mainly on account of steady erosion in the share of public investment. The inadequacy of private investment in fulfilling the capital requirements of agriculture has raised concerns about the state of the rural infrastructure, which could turn into a binding constraint on growth.

(c) Several initiatives have been taken in recent years to improve the agricultural credit delivery mechanism. However, some bottlenecks continue to affect the flow of credit to agriculture. To attain a higher growth in agriculture, the major areas requiring attention in the financial sector are, inter alia, spread of insurance against crop losses and facilities for meeting the needs of the rural economy. Newer forms of credit assessment and risk management systems may also have to be put in place, besides upgrading skills, and ushering in changes in attitudes and mind-sets. Information technology has to be used to facilitate transformation in various processes of rural credit.

(d) Efficient and well developed agricultural markets are necessary to enable farmers to deal with inherent risks associated with the perishability of their produce, to get remunerative prices, and to secure smooth access to input supplies. Towards these objectives, the agricultural marketing system in the country needs to be integrated and strengthened. Given the several risks that farmers face, such as future price and monsoon conditions, there is a need to put in place appropiate risk mitigation policies. Accordingly, a comprehensive public policy on risk management in agriculture could promote a more efficient and commercialised agriculture that could also provide relief to the distressed farmers. Rural infrastructure, which includes agriculture research and extension, transport, electricity, and storage structures, not only enhances the productivity of physical resources, but also helps in supply chain management and value addition in agriculture.

(e) Greater focus needs to be placed on agricultural research in the coming years as the success so far has been restricted to select crops. Efforts to modernise and strengthen the agricultural research system, including the agricultural universities, need to be intensified. The Green Revolution has been the cornerstone of India’s agricultural development, transforming the country from one of food deficiency to self-sufficiency.

The time is now ripe for a second Green Revolution which will lay emphasis on diversifying the agricultural sector further in order to capture new market opportunities.

As regards flow of credit, in which RBI has a role primarily as the regulator of banking system, it has been the RBI’s endeavour to enhance credit flow to agriculture by removing the bottlenecks in credit delivery.

The RBI, on its part, is intensifying efforts in revitalising the rural cooperative credit system, strengthening regional rural banks, providing incentives to commercial banks for investments in rural economy and ensuring an adequate and timely delivery of credit at a reasonable price. The programme for financial inclusion initiated by the RBI in collaboration with banks and several State Governments, by adopting modern technology, is being intensified and expanded

Conclusion
Let me conclude by reiterating that globally demand for agricultural products will be very high for the next two to three decades. India will play a dominant role in contributing to both global demand and global supply. Agriculture will be increasingly more diversified and not confined to food crops. Scientific agriculture is and will be the key for the future. The path ahead is far from smooth, and traversing this path requires constant
efforts, vigilance and dedication.
(Excerpted from 40th Convocation Address of the Acharya N.G. Ranga Agricultural University, Hyderabad by Dr. Y.V. Reddy, Governor, Reserve Bank of India, on June 5, 2008)

What's making you angry?

It’s common to read in newspaper stories about a usually calm and intelligent person who “snaps” and commits a violent act. Some people lose their tempers in this way, repeatedly and dramatically, causing serious physical harm to others. It’s a pattern in which tension builds until an explosion brings relief, followed eventually by regret, embarrassment, or guilt feelings.

In this sudden outburst, people might do things they normally would not even think of doing —they might break things, abuse others, hurt or try to hurt someone else or even try to harm themselves. The degree of aggressiveness expressed during the episodes is grossly out of proportion to any precipitating psychosocial stressors. Yes, we are talking about a disorder called Intermittent Explosive Disorder.

What is intermittent explosive disorder?

On the way to work, you hurl abuses at the driver who just cut you off. At the office, a trivial problem gets your blood pressure high. That night at home, you fight with your spouse and throw a bottle of water against the wall.We all have a propensity to get angry and upset. But then, there are people who react to situations with a sudden outburst without thinking about repercussions. This little-known disorder marked by episodes of unwarranted anger is more common than previously thought, a study funded by the National Institutes of Health’s (NIH) has found. Intermittent explosive disorder (IED) affects as many as 7.3 percent of adults in their lifetime.

Why people suffer from IED

Research findings suggest that IED may result from abnormalities in the areas of the brain that regulate behavioural arousal and inhibition. Impulsive aggression is related to abnormal brain mechanisms in a system. Persons with IED have a set of negative beliefs strongly embedded in their personality, often resulting from harsh punitive methods inflicted by the parents. The child grows up believing that others “have it in for him” and that displaying anger is the best way to restore damaged self-esteem. There is some evidence of that the neurotransmitter serotonin may play a role in this disorder.

Symptoms of IED

Many people diagnosed with IED appear to have general problems with anger or other impulsive behaviors. They may experience racing thoughts or a heightened energy level during the aggressive episode, with fatigue and depression developing shortly afterward. Some report various physical sensations, including tightness in the chest, tingling sensations, tremor, or a feeling of pressure inside the head.

Diagnosis

A psychologist who is evaluating a patient for IED would first take a complete case history. One has to rule out head trauma, epilepsy, and other general medical conditions that may cause violent behavior. Series of psychological tests are conducted to rule out other personality disorders.

Treatment
Anger management skills through a combination of cognitive restructuring, raising endurance levels, and relaxation training looks promising. And because intermittent explosive disorder often begins in early adolescence, parents need to be vigilant in tapping aggressive symptoms in their teens. Treatment could involve medication, with the best prognosis utilising a combination of the two.

Some Tips

Better communication : Angry people tend to jump to and act on conclusions and some of those conclusions can be very inaccurate. The first thing to do if you’re in a heated discussion is slow down and think through your responses.
Get away from the situation : Sometimes our immediate surroundings give us cause for irritation and fury. Problems and responsibilities can weigh on you and make you feel "trapped"; making you resentful." Give yourself a break.
Be tolerant : All you have to do to practice tolerance, accept other people as they are, not as you would like them
to be. When you are tolerant, your actions will almost always become more logical and reasonable.
Ralph Waldo Emerson wrote, “For every minute you are angry you lose sixty seconds of happiness.”

Women think of shopping as much as men think about sex!

A fascinating survey has revealed that most of the young women think about shopping nearly as often as men think about sex.A survey involving 778 women aged 19 to 45 showed that seventy-four per cent of them think about shopping every minute. Previous studies have claimed to support the widely-held belief that young men think about sex every 52 seconds, while the subject crosses some women’s minds only once a day.

In the latest survey by the online fashion magazine Cosmopolitan, two out of five women described themselves as shoe and bag "addicts", while the thoughts of more than one in ten focused on accessories or make-up. On average, those surveyed spent at leas t 30 per cent of their annual income on clothes.

"People think about things which bring them pleasurable feelings. The pleasure is usually in the anticipating and planning," psychologist Ms Jane Prince of the University of Glamorgan was quoted as saying by the Mail online of Britain.

"But so many women displaying this level of preoccupation, thinking about something once a minute, would indicate widespread addictive behaviour," she stressed.

Perhaps the most troubling aspect of the poll for men was that half of women surveyed said they preferred going to the market to spending time with their partner, and nearly as many acknowledged that they kept their shopping escapades secret from their p artner to hide their level of spending. - PTI

Ranbaxy at 3-½ yr high on stake sale report

Shares in India’s Ranbaxy Laboratories rose to their highest in 3-½ years on Wednesday after the Nikkei business daily said Japan’s Daiichi Sankyo wanted buy more than 50 percent of the Indian firm in a deal worth up to $3.7 billion.

The paper said Daiichi Sankyo was planning to launch a bid worth 300 billion yen to 400 billion yen ($2.8 billion-$3.7 billion) for the stake in India’s top drugmaker by sales and an announcement was expected later in the day.

Ranbaxy chief executive Malvinder Singh is holding a news conference at 1:30 p.m. A company spokesman declined comment on the stake sale reports.

At 10:25 a.m., the stock was trading 1.4 percent up at 568.50 rupees in a Mumbai market that was up 1.3 percent. The stock rose as much as 5.6 percent to 591.90 rupees, its highest since December 2004. It rose 6.5 percent on Tuesday, when its market value was $4.9 billion.

Ranbaxy founders and their associates own 34.8 percent of the company, according to stock exchange data, including a 4.8 percent stake held by Oscar Investments.

Oscar Investments, which has Singh as one of its shareholders, said in a notice to the stock exchange on Tuesday its board would meet on Wednesday to "consider and approve the scheme of de-merger of investment and trading business of the company."

RBI hikes repo rate by 0.25% to check inflation

The Reserve Bank on Wednesday hiked its short term lending rate by 0.25 per cent with immediate effect, a move that is likely to force banks to increase interest rates and help check inflation.

"The Reserve Bank of India has decided to increase the repo rate by 25 basis points to 8.00 per cent from 7.75 per cent with immediate effect," the central bank said in a statement in Mumbai.

The reverse repo rate, at which RBI borrows money from banks in exchange of the government papers, however, has been kept in tact at six per cent.

The Reserve Bank said the decision has been taken with a view to containing inflation expectations among other things.

Anil Ambani Taps Former Deutsche Executive for Indian Brokerage

Billionaire Anil Ambani hired Deutsche Bank AG’s former head of Indian equities, Keshav Sanghi, to start an institutional brokerage in a market where equity trading volumes more than doubled last year.

Sanghi, appointed chief executive officer of Reliance Capital Ltd.’s Reliance Equity International unit, hired 40 researchers, salespeople and traders, including 10 former Deutsche employees, he said in an interview in Mumbai yesterday. Sanghi plans to increase the headcount to 100.

Deutsche, HSBC Holdings Plc, CLSA Ltd., JPMorgan Chase & Co. and Citigroup Inc. are among the overseas firms that have lost executives over the past year to Indian brokerages offering sign- on bonuses and equity stakes. India’s benchmark Sensitive Index has tumbled 25 percent this year, curtailing trading commissions and reversing six years of gains.

``Markets and trading volumes will pick up toward the latter part of the year, though we may see some more pain in the near term,’’ Sanghi said. The company will start operations in August, he said.

Sarosh Irani, the former chief operating officer of Macquarie Bank’s Indian brokerage, was appointed to the same position at Reliance Equity, Sanghi said. Varun Pardiwalla and Sudhanshu Bhuwalka, former Deutsche Bank employees, will be co- heads of sales at Reliance, while S. Chandra and Manish Bhatia will lead trading groups.

Sanghi, Deutsche Bank’s former managing director and head of equities in India, quit the German bank in March.

Reliance Capital, based in Mumbai, operates the nation’s largest money management firm. Its Reliance Money division is the retail-broking unit.