Financial Loans and Real Estates Business for Property

IDBI Dynamic Bond Fund Launched by IDBI Mutual Fund

2012-01-31T23:59:00.001-08:00

There is a new fund offer (NFO) from IDBI Mutual Fund, Mumbai Asset Management Firm known as IDBI Dynamic Bond Fund. The fund is featured with generating income while maintaining liquidity on a minimum investment of Rs 5,000. It opens from 31st January, 2012.

An online news portal about business and economy - economictimes.indiatimes.com, writes about IDBI Dynamic Bond Fund, “The scheme will invest in portfolio comprising debt instruments like government securities, PSU and corporate bonds and money market instruments.”

The news portal quotes a statement of Debasish Mallick also about IDBI Dynamic Bond Fund who is the IDBI Asset Management managing director and chief executive, “Debt is the flavour of the market. People consider debt to be the best option compared to equities which is still considered uncertain”

Further he added about IDBI Dynamic Bond Fund, “However, the asset allocation in the debt and money market instruments is not predetermined and could vary according to market conditions.”

“We want to collect a sizable corpus and allow it to grow with time,” according to the executive director B Sarath Sarma. So, IDBI Dynamic Bond Fund is a comprehensive MF to grow with time.

In the conclusion, “The open-ended debt scheme will close on February 14 and has an exit load of 1 percent if redeemed within a year. The company is aiming to collect a corpus of at least Rs 107 crore from the issue.”

IDBI Dynamic Bond Fund is an open ended debt scheme. It will lose on 14th February, 2012. The Company has targeted to collect a corpus of at least Rs. 107 crore from the Fund.

IDBI Mutual Fund is a part of IDBI Bank to invest in Mutual Fund market. IDBI Dynamic Bond Fund is the new fund from IDBI Mutual Fund. It can be compared with Any Time Money Card of Reliance Mutual Fund.

Reliance Mutual Fund Any Time Money Card Launched

2011-12-17T00:31:00.000-08:00

Reliance Mutual Fund launched “Any Time Money Card” to give retail consumers instant access to their mutual fund investments.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of Himanshu Vyapak, CEO of Reliance Capital Asset Management Ltd., “Reliance Mutual Fund is the first fund house in the country to launch this card that offers all the convenience of a debit card for investments made in Reliance mutual fund schemes.”

Any Time Money is the first card in India launched by Reliance Mutual Fund to offer all the convenience of a debit card for investments in RMF.

Further he said in his statement about Reliance Any Time Money Card, “For long, investors have been shying away from investing in MF schemes, especially liquid funds, primarily for lack of options that assure them access to their investments, as and when required, without restricting the growth potential of investments. We feel this card will fill this gap and provide them the necessary reassurance of instant access to their money, allowing them to access their investments just as they would a savings account.”

Reliance Mutual Fund Any Time Money Card will provide an access to the investments of investors and necessary reassurance of instant access to their money.

The Reliance Mutual Fund Any Time Money Card will be made available to investors investing in RMF. Himanshu Vyapak added, “the card will be linked to investments made in the designated funds and can be used to withdraw cash from any VISA authorized ATM or payments at Point of Sale (PoS) outlets. The card has no annual fees or transaction charges within India.”

There is no annual fee or transaction charge within India for the card. It will be linked to investments and can be used to withdraw cash from any VISA authorized ATM. It is a new product of Reliance Mutual Fund after Reliance SIP in Gold Savings Fund.

Triple Health Insurance Plan Introduced by Bharti AXA Life

2011-10-22T22:59:00.000-07:00

Recently, Bharti AXA Life introduced a new critical illness plan - Triple Health Insurance Plan. It covers up to 3 unrelated critical illnesses.

An online news portal about business and economy - economictimes.indiatimes.com, writes about Triple Health Insurance Plan, “The sum assured is paid out in lump sum upon diagnosis of ailments covered under the policy. While other critical illness covers cease once the claim is disbursed, this product promises to extend the cover to include three critical illness claims during the life of the policy.”

Further it adds, “However, it is restricted to 13 diseases or conditions covered by the policy. The claims can be to the extent of 100% sum assured for all the three illnesses, provided they do not fall in the same group as listed by the policy, which covers 13 such ailments, segregated into three groups in all.

Note that this condition means that no claim will be payable in the event of recurrence of say heart attack or cancer, since they would fall in the same group. Group A includes conditions like heart attack, coronary artery bypass, kidney or heart transplant, kidney failure and paralysis. Group B has coma, multiple sclerosis, liver or lung transplant. And Group C takes care of cancer, benign brain tumour and bone marrow transplant.”

About the details of Triple Health Insurance Plan the news portal writes, “Only those with no pre-existing illnesses at the time of applying will be eligible for this policy, which will kick in after a waiting period of 90 days from the policy's inception. Also, between diagnoses of two illnesses, there has to be a gap of 365 days, for the second or third claim to be admissible. Premium rates are guaranteed for the first three policy years, post which they can be reset annually.

The total policy and premium paying term is 15 years. The minimum and maximum ages at entry are 18 and 50, respectively, with the upper age limit at maturity being 65 years. You have to buy a cover of at least Rs 2 lakh, while the highest cover available under the policy is Rs 30 lakh.”

So, it is one of the best health policies for the age group of 18 to 50. Maturity of age for the plan is 65 years. Policy paying term is 15 years. You can take a look of Capital Protection Oriented Fund of SBI Mutual Fund also.

Capital Protection Oriented Fund Launched by SBI Mutual Fund

2011-10-07T06:29:00.000-07:00

Recently, SBI Mutual Fund launched a close-ended Capital Oriented Fund. It is featured with the twin objective of capital protection and growth.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement about SBI Capital Protection Oriented Fund,

“The objective of the three-year close-ended fund is to protect the capital invested on maturity of the scheme through focused investments in equity, debt and money market instruments, at the same time also seeking to provide investors with opportunities for long-term growth in capital.”

SBI Capital Protection Oriented Fund is aimed to fulfill the objective of protecting the 3-year close-ended fund from the capital invested on maturity of the scheme. It protects the fund focused in equity, debt and money market. It seeks investors also to provide opportunities for long-term growth in capital.

Further it adds,

“Fund combines investment avenues and caters to the prime requirement of all the Indian investors who want returns along with the capital protection.”

SBI Capital Protection Oriented Fund is combined with the investment avenues. It creates the prime requirement of all the Indian investors who want returns along with capital protection. It is the latest offering from SBI after SBI Gold Fund of SBI Mutual Fund.

SBI Gold Fund Launched by SBI Mutual Fund

2011-08-27T02:18:00.000-07:00

Recently, SBI Mutual Fund launched a new fund - SBI Gold Fund. It is an open-ended fund to enable investors to invest systematically in gold and gain advantage of the recent rally in the metal’s prices.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of Deepak Chatterjee who is the SBI MF Managing Director and Chief Executive Officer,

“It is a convenient product and will give an opportunity to an investor to invest in the purest form of gold without the need of buying and storing physical gold, that too, without a dematerialised account unlike gold exchange traded funds.”

So, SBI Gold Fund will give an opportunity to an investor to invest in the gold without buying and storing it. It is just like gold exchange traded funds.

He added,

“There was a demand for ETFs and the assets under ETF schemes in the country crossed Rs 6,000 crore last month.”

SBI Gold Fund will open on August 22 and close on September 5, 2011. Investors have to invest minimum Rs. 5000 in this fund.

The portal quotes another statement of SBI MF Chief Investment Officer Navneet Munot,

“Gold could show some volatility in future and hence the SIP route makes more sense. Looking at the current global economic conditions and stock market volatility, gold is a better option.”

So, gold is a better option to see the economic conditions and stock market volatility. In this situation, SBI Mutual Fund launches SBI Gold Fund to grab the investors from the market.

Gold loans and investment in gold are the main market in India these days. Loan against Gold Units of Reliance Commercial Finance and Loans against Gold ETF Units of Muthoot Finance are the most effective products of the recent days. Now, SBI Mutual Fund has introduced SBI Gold Fund to grab Indian market.

HDFC Bank INFINIA Card Launched for Only 5000 Individuals

2011-08-06T23:55:00.000-07:00

Recently, HDFC Bank announced to launch a new credit card for the rich people of the country named – INFINIA. Initially, the bank will issue only to 5000 individuals.

The ultra premium credit card is featured with virtually “no limits” – not just in terms of spend, but also the luxuries as per the announcement of HDFC Bank.

An online news portal - economictimes.indiatimes.com about business and economy, quotes a statement of HDFC Bank Managing Director Aditya Puri about INFINIA Credit Card,

“…What prompted us to conceive INFINIA was the need our clients felt for such a product. We are confident INFINIA will soon be the card of choice for India's rich.”

So, INFINIA is launched by HDFC to satisfy the need of the Bank’s clients. The card is introduced as the choice for India’s rich.

Further the news portal quotes a statement of HDFC Bank Country Head (Retail Assets and Credit Cards) Pralay Mondal,

“…HDFC Bank already enjoys the highest mind and wallet share in credit cards. With INFINIA, we will redefine the lifestyle experience of the elite.”

So, HDFC Bank thinks to redefine the lifestyle experience of the elite. The bank has already targeted highest mind of India to share experience of credit cards.

INFINIA Card will be available in both Visa and MasterCard format. The card is launched for India's High Networth Individual (HNI) population.

HDFC Bank INFINIA card will became the honorable card for the rich population of India. The bank will initially offer the card only to 5000 HNI population.

HDFC Bank has 186 distribution network and 5,471 ATMs in 996 cities in India as on March, 2011. HDFC is one of the most influencing banks in Indian banking sector. Indian financial market is taking a new shape with banking institutions. Loans against Gold ETF Units of Muthoot Finance have given a new vision to the Indian investors.

Loans against Gold ETF Units to be offered by Muthoot Finance

2011-07-24T19:43:00.000-07:00

Recently, Muthoot Finance Ltd announced to offer loans against Gold ETF (Exchange Traded Funds) units as security. The Company claims to be the largest gold finance NBFC in India.

An online news portal about business and economy - economictimes.indiatimes.com quotes a statement of Muthoot Finance Ltd Managing Director George Alexander Muthoot about loans against gold ETF units,

“loans against gold ETF units was a scheme through which Muthoot Finance plans to venture into a totally new segment of gold financing, which would not only add value, but also enable the company to service the financial requirements of newer customer segments.”

Further he adds,

“The new scheme would come into force by this month end and would enable the customers to avail finance at the rate of 15 per cent interest against their Gold ETF units to the extent of 85 per cent of the Net Asset Value of ETFs.”

The news portal quotes a statement of Sunita Anand also who is National Stock Exchange Assistant Vice-President and Southern Region Head,

“Gold ETFs have seen a progressive rise in popularity throughout the country over the past two to three years, attaining a whopping size of over Rs 5,000 crore as of June this year, resulting out of active investments from over 320,000 investors.”

In an analysis of the fund, the news portal writes,

“Commonly referred as 'paper gold', gold ETFs are mutual fund units issued by asset management companies against 99.5 per cent purity physical gold deposited with a SEBI-registered custodian.

These funds are passively managed and mirror domestic gold prices. By enabling investors to invest in gold without holding it in physical form, gold ETFs offer a rather unique investment opportunity to investors.”

So, essence of the gold ETFs offer is giving a rather unique investment opportunity to investors by Muthoot Finance Ltd. It is introduced just after Loan against Gold Units of Reliance Commercial Finance.

Loan against Gold Units Launched by Reliance Commercial Finance

2011-06-21T19:32:00.000-07:00

Recently, Reliance Commercial Finance (RCF), part of the Anil Dhirubhai Ambani Group, launched a unique initiative plan – loan against gold.

An online news portal - economictimes.indiatimes.com, writes about the offer,

“Customers can avail of loans up to 90 percent of the value of gold units held, while the minimum amount offered under this initiative would be Rs.100,000 and the maximum would be Rs.1 crore.

The tenure of the loans will vary from 6 months to 12 months and can be paid in easy repayment options available under the initiative.”

The news portal adds a statement of K.V. Srinivasan, chief executive of Reliance Commercial Finance also,

“These loans, being offered by RCF, are part of an exclusive tie-up with Reliance Mutual Fund and would initially be available to investors of Reliance Gold Savings Fund only. We strongly believe that gold funds have opened an entirely new avenue for offering loans to customers. We expect this segment to ramp up aggressively as investors start embracing this form of gold for future investments. The tie-up provides a unique opportunity for Reliance Gold Savings fund investors to unlock the value of their savings held in form of Gold mutual fund units. Investors will continue to enjoy benefit of gold price appreciation during the tenure of loan.”

The news portal writes about the character of loan against gold units,

“Reliance gold savings fund enables investments in the precious metal in paper form, without having to open a dematerialised account. In other similar funds, a demat account is mandatory.”

This facility is offered across 17 locations in India. These are launched with an exclusive tie-up with Reliance Mutual Fund. It would initially be available to investors Reliance Gold savings fund only. So, it enables investments in the precious metal in paper form. It is launched just after Reliance SIP in gold savings fund.

Equity Plus Scheme Launched by Sundaram Mutual Fund

2011-05-31T20:55:00.000-07:00

Recently, Sundaram Mutual Fund launched Equity Plus scheme, an open-ended scheme. The scheme was open for only May 16, 2011. It is closed now. It was open from May 4, 2011.

An online news portal about business and economy - economictimes.indiatimes.com, writes about the Sundaram Mutual Fund Equity Plus scheme,

“Sundaram Equity Plus aims to invest between 65-85 per cent in equity to give all the tax advantages of a designated equity fund and a maximum of 35 per cent in gold ETF.”

So, Sundaram Equity Plus is aimed to invest more than 80% equity to give all the tax advantages of a designated equity fund.

The portal quotes a statement of Sundaram Mutual Fund's Director-Sales & Marketing, Sunil Subramaniam also,

“The scheme will primarily focus on opportunities in Indian equities with the addition of gold-ETF to provide diversification and exposure to the relative attractiveness of gold in certain phases. The investors will get benefit from equity and gold ETF- two asset classes in terms of capital appreciation and avail tax benefits.”

It provides diversification and exposure to the relative attractiveness of gold in certain phases as per the stamen of Sunil Subramaniam who is the Sundaram Mutual Fund's Director-Sales & Marketing.

It quotes the statement of Sundaram Equity Plus Fund Manager, Srividhya Rajesh also,

“The performance of the scheme will be benchmarked to the S&P CNX Nifty index for the equity and equity related instruments and to the price of gold for the investments in gold-ETF. The objective of this scheme would be to seek capital appreciation by investing in equity and equity-related instruments listed in India to the extent of at least 65 per cent and in gold-ETF up to 35 per cent.”

The news portal writes about the Sundaram Mutual Fund,

“Sundaram Mutual Fund, a major player in the fund management has an average asset under management (AUM) of about Rs 14,556 crore as on April 2011.”

We already have experienced Samridhi Plus of LIC. Now, tell your experience with Equity Plus Scheme of Sundaram Mutual Fund.

Pramerica Fixed Duration Fund-Series 2 Launched by Pramerica MF

2011-04-21T05:44:00.000-07:00

Recently, Pramerica Mutual Fund announced to launch of a close-ended income scheme. It is Pramerica Fixed Duration Fund-Series 2.

About Pramerica Fixed Duration Fund-Series 2 an online news portal about business and economy - economictimes.indiatimes.com writes,

“Pramerica Fixed Duration Fund-Series 2 is open for subscription from March 24 till March 28, 2011. The duration of the fund will be for 366 days from the date of allotment, including the date of allotment.”

Further it quotes a note of press release,

“The scheme seeks to provide reasonable returns, commensurate with a moderate level of risk, through investments in a portfolio of debt and money market instruments. The scheme has low credit risk and is tax-efficient.”

So, the scheme is aimed to provide reasonable returns with a moderate level of risk. It is a low credit risk and tax-efficient scheme.

The online news portal quotes a statement of Mahendra Jajoo who is the Pramerica Executive Director and CIO-Fixed Income,

“FMPs can be an ideal product for all investors who wish to invest in a product with moderate risk for a fixed tenure and earn tax-efficient returns. In the mid-quarter Monetary Policy review conducted on March 17, RBI hiked key rates by 25 bps.”

"Bank CDs are currently trading at attractive yields and with the fresh round of rate hike, they are expected to stabilise around these attractive levels. Thus, this could be an opportune time to invest in a FMP.”

It is time to invest in a FMP when bank CDs are currently trading at attractive yields. It is being considered as an ideal product for all investors who wish to invest in a product with moderate risk for a fixed tenure and earn tax-efficient returns. It is the most appreciating product like Samridhi Plus of LIC.

Bright Stars Power Plus and Wonder Years Retirement Plan Launched by Bharti AXA Life

2011-03-17T01:28:00.000-07:00

Recently, Bharti AXA Life announced to launch two new insurance plans - Bright Stars Power Plus and Wonder Years Retirement Plan.

Wonder Years Retirement Plan is a retirement plan of Bharti AXA Life. It is a traditional product and offer combined benefits of guaranteed returns and life insurance cover.

Bright Stars Power Plus is a child plan of Bharti AXA Life. The insurance plan is featured with protecting and building savings for the child's key lifestages.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of Bharti AXA Life Chief Marketing & Operations Officer Mark Meehan,

“Both the products are based on extensive consumer research and hence address the needs highlighted by customers. They have been specifically designed to provide returns at the key life stages.”

So, both products have been introduced after having researched of market and consumers’ requirement. The plans have been designed to provide returns at the key life stages.

The news portal writes about the insurance plans,

“While the retirement plan - Bharti AXA Life Wonder Years Retirement Plan - will be a traditional product and offer combined benefits of guaranteed returns and life insurance cover.

The child plan - Bharti AXA Life Bright Stars Power Plus - would have the features that protects and build savings for the child's key lifestages.”

So, these insurance plans are compatible with new requirement of customers. These are as impressive as Samridhi Plus of LIC.

Samridhi Plus Launched by LIC under ULIP Portfolio

2011-03-04T08:53:00.000-08:00

Recently, Life Insurance Corporation of India launched - Samridhi Plus. It is launched under unit linked portfolio. It is aimed to offer insurance protection, safety and growth.

An online news portal about business and economy - economictimes.indiatimes.com, writes about the Samridhi Plus,

“The minimum age at entry level for Samridhi Plus is 8 years while the maximum age is 65 years.

The minimum premium ranges from Rs 1500 (monthly - ECS) to Rs 30,000 (single premium) depending on the mode of payment while the maximum is Rs 1 lakh per annum under any mode for the 5 year premium paying term.”

So, LIC has minimized and maximized the age of entry level for the Samridhi Plus. There is 8 years minimum age and 65 years maximum age for the insurance policy.

Premium of Samridhi Plus is also affordable and flexible which starts from 1500 monthly amount. There is 1 lakh per annum under any mode for the 5 year premium paying term.

It quotes a statement of LIC also,

“Samridhi Plus safeguards policyholders' investment from market fluctuations. Accident benefit option is also available under this plan that will be equal to the life cover up to a maximum of Rs 50 lakh; subject to certain conditions. The policy term for the plan is fixed for 10 years.”

So, there is an accident benefit option also under this plan. It will be known as equal to the life cover up to a maximum of Rs. 50 lakh. It is fixed for 10 years for the policy term.

Samridhi Plus is launched with the new aspect of flexibility in the insurance sector. You are able to choose it according to your needs and requirement. The plan is really impressive for all age. The plan is as impressive as Life Shield Platinum and Aviva Dhan Varsha of Aviva Life Insurance.

Reliance SIP in Gold Savings Fund Introduced by Reliance Mutual Fund

2011-02-22T19:27:00.000-08:00

Recently, Reliance Mutual Fund announced to launch India’s first systematic investment plan (SIP) in Gold Savings Fund. Premium of the SIP Gold Savings Fund can be made on the monthly basis.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of CEO of Reliance Capital Asset Management Sundeep Sikka, “It was the first SIP in gold introduced in the domestic mutual fund industry aimed at helping investors to accumulate the yellow metal in small amounts regularly.”

So, the first SIP will be known as the collecting yellow metal in small amounts regularly. The Mutual fund helps investors in accumulating gold with their regular income.

Further he said, “We are introducing SIP in Reliance Gold Savings Fund. This is aimed at cultivating a regular savings habit among investors to accumulate gold in small amount through the SIP mode.”

Reliance SIP in Gold Savings Fund is aimed to cultivating a regular saving habit in gold sector with small amount through SIP mode.

With another statement of Sikka, “Reliance Gold Savings Fund is the only fund in the market which will enable investors to invest in gold in a paper form without the need of a Demat account as it provides the facility to invest through online medium and physical application mode.”

It is the most secure way to invest in Reliance Gold Savings Fund with Reliance Mutual Fund. Investors can invest in gold in a paper form without the need of a Demat account. There are both modes to apply for the Reliance Gold Savings Fund – physical and online. It is as benefited as Classic ULIP Plan of Reliance.

In the conclusion he said, “The new fund offer was a convenient way to diversify investment portfolio and reap the returns of gold from a long-term perspective.”

The news portal writes about the fund, “The fund allows small regular investments as low as Rs 100 per month and in multiples of Re one thereafter.”

Life Shield Platinum and Aviva Dhan Varsha Launched by Aviva Life Insurance

2011-01-26T08:34:00.000-08:00

Recently, Private insurer Aviva Life Insurance announced the launch of two new insurance plans - Life Shield Platinum and Aviva Dhan Varsha. These fulfill the requirement of loan protection, income protection as well as offer guaranteed returns.

Life Shield Platinum and Aviva Dhan Varsha are two traditional insurance products of Aviva Life Insurance.

Life Shield Platinum of Aviva Life Insurance is featured with options to choose the protection need ranging from life protection, income replacement or loan protection.

On the other hand, Aviva Dhan Varsha of Aviva Life Insurance is featured with traditional investment cum protection plan. It gives a guaranteed addition of 6 % to 9 % of the life cover along with life protection and riders to secure one's future.

An online news portal - money.oneindia.in, quotes a statement of Mr. T R Ramachandran, CEO and Managing Director, Aviva Life Insurance India, “…Moreover, the 2 products are on a traditional platform and take care of the problems on loan protection, income protection and provide guaranteed returns.

The country is underinsured with only 4% of insurance penetration and a growing base of insurable population in the age group of 15-59 years.

Aviva India is a joint venture between one of the country's oldest and largest groups, Dabur, and Aviva plc, the UK's largest insurance group, whose association with India dates back to 1834.

Our vision is to be amongst India's leading life insurers with a quality business model, focused on sustainable growth. We seek to build a robust product portfolio meeting all customer lifecycle needs related to - Savings, Retirement, Investments and Protection.”

Life Shield Platinum and Aviva Dhan Varsha traditional insurances products are benefited with various features like Smart Horizon Ulip Plan of SBI Life. These are helpful in savings, retirement, investments and protections. You can get the biggest advantage with Life Shield Platinum and Aviva Dhan Varsha insurance products of Aviva Life Insurance.

Smart Horizon Ulip Plan Launched by SBI Life

2011-01-22T19:46:00.000-08:00

Recently, Private sector SBI Life launched a Unit Linked Insurance Product (Ulip) - Smart Horizon. The plan is launched to provide long-term capital appreciation.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of MN Rao, SBI Life managing director, “The unique Automatic Asset Allocation feature makes Smart Horizon ideal for many evolving Indian investors who do have the time to make fund allocation decisions on an on-going basis.”

Further he said, “Automatic Asset Allocation (AAA), an algorithm-based active investment allocation mechanism. This IT-based system developed by testing over 5,000 potential scenarios in the Indian equity and bond markets, determines the optimal risk-return combination. The investment will be made in such a manner that initially there will be higher exposure to equities, followed by increasing exposure to debt and money markets as the plan nears maturity. Thus, AAA mechanism ensures better returns for investors, while protecting their capital.”

According to SBI Life, there is a great chance of better returns for the investors, while protecting their capital.

About the benefit of the plan, he added, “To avail the benefit of Automatic Asset Allocation facility, the customer can choose either Plan A or Plan B, depending on his risk appetite. Under Plan A, the equity exposure is higher as compared to Plan B. The product also provides the flexibility to allow the customer to actively manage his investment through a choice of four funds namely, Index, Equity, Balance and Bond Fund. This option is possible under Plan C.”

People can choose the plan according to their benefit. There is Plan A, B and C. There is flexibility also in each plan to manage investment through a choice of four funds - Index, Equity, Balance and Bond.

Smart Horizon Ulip Plan of SBI Life is compared with ING Market Shield ULIP. Both plans have greater offers for the investors.

Bharti AXA Life Insurance Introduces Aajeevan Anand Plan

2010-12-26T06:00:00.000-08:00

Recently, Private sector insurer – Bharti AXA Life Insurance launched Aajeevan Anand plan. It provides guaranteed regular payouts after every 5 years and life cover until the age of 100 years.

So, Aajeevan Anand Plan covers complete insurance of 100 years with guaranteed return after every 5 years.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of Bharti AXA Life Chief Marketing and Operations Officer (CMOO) - Mark Meehan, “Aajeevan Anand is a powerful financial solution that provides guaranteed regular payouts to meet various life stage needs until the age of 100.”

Aajeevan Anand of Bharti AXA Life Insurance is being recognized as a powerful financial solution also.

Further he said to the ET, “In addition to these lifelong paybacks, the product provides customers with life cover and hence is an ideal savings cum protection plan.”

So, with Aajeevan Anand plan customers can get life cover with saving-cum protection. It is a very unique insurance plan for the customers.

Mark Meehan adds, “This whole life plan is apt for salaried people since all premium payments are made in the first 10-15 years of the policy.”

It is just like a whole life plan. You can get advantages with the plan like a salaried people. You can pay the premium of the policy in installments.

In the analysis of Aajeevan Anand of Bharti AXA Life, the news portal writes, “The nominee of the policy holder would get sum assured in case of death during the policy period which is 100 years.”

Aajeevan Anand of Bharti AXA Life gives a great advantage for nominee also. Nominee of the policy can get a great advantage with death cover during the policy period which is 100 years.

Aajeevan Anand of Bharti AXA Life is one of the best insurance plans like Market Shield plan of ING Life and Pramerica MF.

ING Life India Launched ING Market Shield ULIP

2010-12-22T18:03:00.000-08:00

Recently, ING Life India launched a new unique Unit Linked Insurance Product - ING Market Shield. It provides the customer the opportunity to participate in the equity market while protecting investments from its downside.

An online news portal about business and economy - economictimes.indiatimes.com, quoted a statement of Rahul Agarwal, Chief Distribution Officer, ING Life India, “The new ULIP, ING Market Shield comes with unique benefits, allowing customers to maximize their returns and have adequate protection.”

Further Agarwal said, “ING Market Shield is a one of its kind unit linked insurance product. It is designed such that our customers can benefit from market's upswaing due to high equality participation, but secures their investment from losses, when the market is volatile. The plan provides the customer a Guaranteed NAV throughout the term of the product and not just at maturity unlike most available products.”

In an analysis of ING Market Shield, the news portal says, “ING Market Shield also ensures highest equity exposure throughout the term of the policy, compared to other products, therefore its is expected to generate a higher return to customers.

For a premium paying term of 5 years the minimum payable is Rs 48,000 and for a premium paying term of 10 years or the entire policy term the minimum premium payable is Rs 36,000. The plan offers premium payment in the annual mode, and customers can choose their desired life cover ranging between 10 to 20 times the annual premiums.”

About the relation of stock market with ING Market Shield, the news portal writes, “This process ensure maximum exposure to the stock market, while minimizing the downside risk and assures the Guaranteed NAV at all times through the term of the policy including death, surrender, partial withdrawals as well as Maturity benefit.”

Overall, ING Market Shield is a good new ULIP plan like Classic ULIP Plan of Reliance Life.

Pramerica Dynamic Fund Launched by Pramerica Mutual Fund

2010-11-26T23:05:00.000-08:00

Recently, Pramerica MF introduced its open-ended dynamic asset - Pramerica Dynamic Fund. The Fund is launched using a proprietary tool - Pramerica Dynamic Asset Rebalancing Tool (Pramerica Dart).

Pramerica Dynamic Fund scheme will invest in debt and equity instruments. The allocation to equity and debt of Pramerica Dynamic Fund will be determined by Pramerica Dart.

An online news portal about business and economy - economictimes.indiatimes.com, writes about Pramerica Dynamic Fund of Pramerica MF, “The tool takes into account three key factors that influence the markets - fundamentals, volatility and liquidity and comes out with a score that tells how much of equity should be held in the portfolio. This can range from 100-30% in equity depending on market valuations. Fund managers will actively manage the portfolio within the limits prescribed by the model.”

Further the news portal writes about the investment and aim of the Fund, “The fund aims to achieve long-term capital appreciation by investing in an actively-managed diversified portfolio comprising equity and debt instruments.

The fund will invest 30-100% in equity and the fixed income exposure is capped at 70% of the assets. The fund benchmark comprises 50% of Nifty and 50% of Crisil MIP Index.”

So, the Fund investment sectors are very clear with its percentage. The Fund has targeted revenue sectors very wisely.

About the management of Pramerica Dynamic Fund, the news portal writes, “The fund will be managed by Ravi Gopalakrishnan and Mahendra Jajoo. There is no entry load. To curb traffic, there is an exit load of 1% if you decide to redeem before completing one year in the scheme after allotment of units. NFO closes on December 3, 2010 before it reopens on December 13, 2010.”

Now, it is clear that there is no entry load in Pramerica Dynamic Fund of Pramerica Mutual Fund. It is one of the best MF investment plans after Index Fund of Reliance Mutual Fund.

Classic ULIP Plan Launched by Reliance Life

2010-11-14T07:37:00.000-08:00

Recently, Reliance Life Insurance launched a unit-linked insurance plan - Classic ULIP Plan. The policy provides policyholders the benefits of regular savings with enhanced protection and market-linked returns.

Classic ULIP Plan would provide protection to policyholders in the age group of 7-65 years. An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of Reliance Life about Classic Ulip plan, “The unique proposition of Reliance Life Insurance Classic Plan is that it offers flexibility and triple benefit of savings, insurance and investment - all in one single plan.”

The news portal quotes a statement of Malay Ghosh who is Executive Director and President in Reliance Life, “The new Ulip offers multiple benefits and protection - from helping policyholders plan their finances wisely at different stages of life, to providing risk cover on loss of life.”

Further he added, “The flexibility offered to policyholders by the company allows liquidity through partial withdrawals after fifth policy anniversary, loan after the completion of second policy year and top-up option to increase regular savings.”

In the analysis, the news portal writes, “Under the Regular Option, the customers would have to pay Rs 20,000 annually -- which can also be paid in monthly, quarterly and half yearly options.

For the Single Premium option, customers will have to pay a minimum of Rs 50,000 only once at the inception during the 15-year policy tenure.”

So, the Classic Ulip plan of Reliance Life gives a flexibility of payment. There is an option of single premium also in this plan. Reliance Life Classic ULIP Plan comes with triple benefit of savings, insurance and investment - all in one single plan.

Classic Ulip plan of Reliance Life covers risk of life also and helping policyholders plan their finances wisely at different stages of life. It is another best investment plan after SIP Investments via NSE-MFSS Platform of UTI.

SIP Investments via NSE-MFSS Platform to be launched by UTI

2010-10-31T07:44:00.000-07:00

Recently, UTI Mutual Fund announced the launch of SIP investments (Systematic Investment Plans) through NSE's-the Mutual Fund Service System (MFSS) platform.

An online news portal about business and economy - economictimes.indiatimes.com, quotes a statement of the company, “UTI Mutual Fund was the first fund house to partner with the National Stock Exchange (NSE) for selling mutual fund schemes through the NSE-MFSS platform in the month of November 2009.

Keeping with that tradition of bringing the most convenient way of investment to our investors through cutting edge technology, we are the first fund house now to launch SIP investments (Systematic Investment Plans) through this NSE-MFSS platform.”

So, UTI Mutual Fund is bringing the most convenient way of investment. It offers cutting edge technology through the investment. It is launched through the NSE-MFSS platform.

Further the news portal writes about SIP Investments via NSE-MFSS Platform of UTI, “Terminals of NSE brokers will be the official point of acceptance and hence the date of acceptance of the transaction will be the date of entering the request on the terminal.

Investors will also have the added advantage of obtaining the same day's NAV (before 3 p.m.) at a large number of outlets in more than 1500 towns and cities, including remote locations.

The investors will also have an advantage of getting their units allotted in demat mode in addition to the existing physical mode as per their choice.”

Finally, UTI Mutual Fund gives an advantage to the investors by introducing SIP Investments via NSE-MFSS Platform. It will allocate to the existing physical mode as per their choice. The investment plan is very appreciating and unique inspired by cutting edge technology in the recent time. The fund can be compared with Index Fund of Reliance Mutual Fund. It fulfills all the needs of the new age.

4 New Products Launched by DLF Pramerica Life

2010-10-13T19:30:00.000-07:00

Recently, DLF Pramerica Life, a private sector insurer launched 4 new insurance products including two traditional plan.

DLF Pramerica Life Insurance said in a statement, “The traditional non-linked products namely DLF Pramerica Assure Money Plus and DLF Pramerica Tatkaal Suraksha Gold provides saving as well as protection.”

DLF Pramerica Assure Money Plus and DLF Pramerica Tatkaal Suraksha Gold are non-linked products of DLF Pramerica Life.

Further it said, “Assure Money Plus provides minimum guaranteed earnings on maturity along with the advantage of high life insurance cover.

Besides, it also launched two unit linked products namely DLF Pramerica Wealth Plus Premier and DLF Pramerica Ezee Wealth Plus with simplified underwriting.

DLF Pramerica Wealth Plus Premier is a good product for high net worth individuals seeking potentially high investment returns along with a well secured future for the family in case of any eventuality.” The statement was published in ET.

Assure Money Plus offers guaranteed earnings on maturity. It gives an advantage of high life insurance cover also.

On the other hand, DLF Pramerica Wealth Plus Premier and DLF Pramerica Ezee Wealth Plus are launched with the simplified underwriting. DLF Pramerica Wealth Plus Premier is considered as a very good product that offers high investment returns along with a well secured future for the family in case of any eventuality.

An online news portal - economictimes.indiatimes.com, writes about new products of DLF Pramerica Life and DLF, “DLF Pramerica Life is a joint venture between real estate company DLF Ltd and the US-based Prudential International Insurance Holdings.

The company became operational in September, 2008 and currently has 30 offices across Delhi NCR, Haryana, Punjab and Gujarat.”

We all know that DLF Pramerica Life is a joint venture between real estate company - company DLF Ltd and the US-based Prudential International Insurance Holdings. Currently, it has more than 30 offices across well known cities in India.

DLF Pramerica Life launches some good products after Index Fund of Reliance Mutual Fund.

Index Fund Launched by Reliance Mutual Fund

2010-09-13T01:00:00.000-07:00

Recently, Reliance Mutual Fund which is a leading asset management firm launched an open-ended index fund. It will invest in companies whose securities are covered in the Nifty and the Sensex.

Reliance Mutual Fund said in a statement about Index Fund, “The scheme proposes to invest 95-100 per cent in equities and equity-related securities covered by the Nifty and the Sensex.” It was published in the ET.

The scheme gives a chance to invest almost 100% in equities and equity-related securities. It is covered by the Nifty and the Sensex.

About the Index Fund of Reliance Mutual Fund, economictimes.indiatimes.com writes, “Available in both growth and dividend option, the minimum investment amount is Rs 5,000. Adding, entry load is nil for the scheme, whereas the exit load is 1 per cent for holding period of up to 12 months and Nil thereafter.” It is the quotation of a statement. So, the scheme is available in both growth and dividend option.

Sundeep Sikka who is the Reliance Capital Asset Management CEO said about Reliance Index Fund, “Reliance Index Fund provides investors an opportunity to participate in India's growth story by investing in well-diversified portfolio of fundamentally strong, highly liquid and well-known companies.”

So, it gives investors a chance to participate in India’s growth story by investing in well-diversified portfolio.

Further he adds, “We have decided not to charge any asset management fees for this fund in our effort towards financial inclusion and to make this product more attractive for our investors - especially in smaller cities or first time investors who have not participated in the success of capital markets in India.”

Index Fund of Reliance Mutual Fund closes on 23rd September, 2010. It is a very attractive product for the investors in Reliance Mutual Fund. Investors will get a chance to participate in the success of capital markets in India.

SBI Life Launches Smart Performer and Unit Plus Super

2010-09-04T02:55:00.001-07:00

Recently, Private insurer SBI Life launched two Unit-Linked Life Insurance Policies (ULIPs) - Smart Performer and Unit Plus Super. These ULIPs plans are compatible with the new IRDA guidelines that are already effective.

About the two new ULIPs, SBI Life said in a press release, “SBI Life has launched Smart Performer and Unit Plus Super... In compliance with the new IRDA guidelines, these newly launched ULIPs are equipped with enhanced features such as benefits of higher protection, multiple investment options and a wide range of riders.”

So, the two new ULIPs - Smart Performer and Unit Plus Super are well-matched with the new IRDA guidelines also. These are equipped with enhanced features also such as benefits of higher protection, multiple investment options and a wide range of riders.

Further MD & CEO M N Rao of SBI Life Insurance said, “Customers will find that the new range is highly beneficial, as it further reinforces the proposition of security and long-term wealth creation.”

As per the statement of MD and CEO of SBI Life, these plans are highly beneficial in long-term wealth creation and proposition of security.

About 2 new ULIPs of SBI Life, an online news portal about business and economy - economictimes.indiatimes.com writes, “SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI has a 74 per cent stake in the insurance company, while BNP Paribas Assurance holds the remaining 26 per cent.”

Further the news portal adds, “The Insurance Regulatory and Development Authority's (IRDA) new guidelines protecting ULIP-holders from mis-selling by dealers and onerous commissions are likely to make the equity-linked instruments more investor-friendly.”

In the current situation, Smart Performer and Unit Plus Super of SBI Life are the best plans for the customers. These follow the rules and regulations of new guidelines of IRDA also.

Reliance Capital Asset Management Plans to Launch Islamic Funds in Malaysia

2010-06-30T10:37:00.000-07:00

Recently, a subsidiary of Reliance Capital Asset Management has announced to launch two Islamic funds in Malaysia by July. It will roll out products for retail investors in two years.

About the Reliance Capital Islamic Funds, economictimes.indiatimes.com writes, “Reliance, India's largest asset management company, will launch a fund investing in Indian stocks next week and a quantitative global equity fund investing in the US, Europe and Asia in July. Both funds would be managed out of Malaysia.”

Vikrant Gugnani who is the Reliance Capital's international businesses CEO said to ET, “The long-term objective is to target the retail sharia market in the region. We believe the retail story in Malaysia has yet to unfold and we want to be positioned well before to take advantage of (it).”

Reliance Capital Asset Management is the part of financial services firm Reliance Capital. It manages more than $33 billion of Reliance Capital.

About the new funds of Reliance Capital, online.wsj.com writes, “The Malaysian unit of Reliance Capital Asset Management, India's largest asset management firm, plans to launch its two maiden Shariah-compliant funds as it seeks to tap into Malaysia's importance as a Shariah-compliant financial hub and the growing demand for Islamic funds from the region.”

The news portal quotes a statement of Vikrant Gugnani who is the Reliance Capital's international business chief executive, “We are targeting institutional investors for these funds but eventually we will broaden our reach to include the retail market. Our Malaysian company will be the flagship venture in the Islamic asset management business and a global hub for Shariah-complaint products. The total net asset value of Islamic funds in Malaysia currently exceeds MYR22 billion.”

According to the Ian Lancaster who is the Reliance Asset Management Malaysia's chief executive, “The Global Equity fund is a 24-country developed market fund that will invest across 2,500 stocks.”

Islamic Funds in Malaysia by Reliance Capital has gotten the biggest buzz after ICICI Prudential Nifty Junior Index Fund. Now, Reliance is the global leader in market funds.

ICICI Prudential Nifty Junior Index Fund Launched

2010-06-11T23:24:00.000-07:00

Recently, ICICI Prudential AMC announced the launch of Nifty Junior Index Fund. It is an open-ended index fund that allows users to invest in companies whose securities are included in Nifty Junior Index.

The New Fund Offer opens from June 10. It will end on June 21. It is declared in a statement by the company.

The fund is being considered as the country's first open-ended index fund to track CNX Nifty Junior.

About the ICICI Prudential Nifty Junior Index Fund economictimes.indiatimes.com, an online news portal about news and economy says, “Mutual fund major, ICICI Prudential AMC launched its ICICI Prudential Nifty Junior Index Fund, an open-ended index fund that will invest in companies whose securities are included in Nifty Junior Index.”

So, it is an open-ended index fund. You are able to invest in companies whose securities are included in Nifty Junior Index.

Further the news portal quotes a statement of the company about the ICICI Prudential Nifty Junior Index Fund, “Its New Fund Offer (NFO) opens from June 10 and will close on June 21.”

The news portal says, “The Company claimed it to be the country's first open-ended index fund to track CNX Nifty Junior. The fund aims to track 90-95 per cent of the index, maintaining cash balance between 5-10 per cent of the net assets to meet redemptions and other liquidity requirements.”

The news portal gives a conclusion about the fund, “The fund will also track upto 100 per cent of the index as and when the liquidity in the index improves.”

Overall, the new fund - ICICI Prudential Nifty Junior Index Fund has introduced a great investment plan for the consumers. It has great flexibility and it aims to track 90-95 % of the index. There is no doubt that it is a new fund. The new fund has been launched by ICICI Prudential as Nifty Junior Index Fund. The fund will be able to release business cycle.

Monetary Policy in Depression and in Inflation from Business Cycle

2010-05-19T05:05:00.000-07:00

Monetary Policy in Depression:

In the atmosphere of depression, there is a need to encourage investment and so the loans are made cheaper to stimulate investment and increase the demand by increasing income and employment because a cheap money policy will discourage saving and promote investment.

It is said that the Monetary Policy has less scope in depression and fails to bring the economy out of depression, as the MEC is low and so the businessmen are scared to invest, even though the rate of interest is low. Rate of interest is the factor but not the only factor for investment.

Businessmen borrow when the business is expanding not when it is declining. However, we cannot say it is totally useless because it can stimulate demand for durable goods and private investment. But open market operation can increase the liquidity overall in the economy. Even if credit policy cannot turn the business cycle, it can create the necessary atmosphere for the other policies to be successful.

Monetary Policy in Inflation:

Inflation is faced at the prosperity phase when MEC is high, rising prices, output and employment. The condition in the economy is very optimistic and business activities are rapidly increasing. Though his condition cannot go on continuously, with the increase in consumer spending and investment spending, the credit condition in the economy becomes tight.

The banks start feeling difficult to cope with demand for credit. In such a situation, the rate of interest is raised by the banks to control the liquidity in the economy. The cash Reserve Ratio, Statutory Liquidity Ratio are raised and a tight money policy is in effect to control the boom from turning into inflation. The effect of Monetary Policy in inflation is much greater than in depression.

Now, we will try to understand how fiscal policy controls the business cycle in the next chapter of the blog.

Multiplier-Acceleration Interaction Principle of Business Cycle

2010-05-02T23:06:00.000-07:00

Samuelson’s model is regarded as the first step in the direction of integrating theory of Multiplier and the principle of Acceleration. His model shows how the multiplier and acceleration interact with each other to generate income, to increase consumption and investment, demand more than expected and how this causes economic fluctuations.

To understand Samuelson’s model, let us first understand derived investment. Derived demand is the investment in capital equipment, which is undertaken due to increase in consumption making new investment necessary. We will try to understand this interaction briefly. When autonomous investment takes place in a society, income of the people rises and the process of Multiplier start increasing the income, which leads to the increase in demand for consumer goods depending on the marginal propensity to consume.

If there is excess production capacity, the existing stock of capital would prove inadequate to produce consumer goods to meet the rising demand. Producers trying to meet the growing demand undertake new investments. Thus, increase in consumption creates demand for investment. This is derived investment.

This marks the beginning of Acceleration process, when derived investment takes place income increases further, in the same manner as it happens when the autonomous investment takes place. With increase in income, demand for consumer goods rises. This is how the Multiplier and the Accelerator interact with each other and make the income grow at a rate much faster than expected. With the help of both the Multiplier and Acceleration principle, Samuelson tried to relate the upswings and downswings of business cycle. There are some criticisms regarding the assumptions, they are as follows –

There is no government activity and no foreign trade

No excess capacity

One year lag in increase in consumption and investment demand

Though many economists had different approaches, some attribute business cycle to expansion and contraction of money supply some say it is due to the interaction of Multiplier & Acceleration which changes the aggregate demand and leads to fluctuations but some attribute it to the innovations in one sector which spreads to the rest of the economy that causes recession and boom.

There are other economists, who attribute fluctuation of business cycle to the politicians manipulating economic policies and some say supply shocks for e.g., 1970’s sharp increase in oil prices, increased inflation. All these theories have elements of truth. But they are not valid in all the places and time. The key is to understand them and combine these theories and use the knowledge of macro economics to decide when and where to apply it.

Pure Monetary Theory of Business Cycle from Managerial Economics

2010-04-18T23:46:00.000-07:00

According to Prof. R. G. Hawtrey, a British economist, there is direct relationship between volume of money supply and the economic activity. Wherever there is change in the flow of money or money supply changes, there will be business fluctuations. Here, he means the credit creation by the banking system i.e., expansion in bank credit leads to demand and so the upswing of business cycle starts. On the other hand, when there is decrease in money supply through contraction of bank credit, it leads to down swing and thus leads to depression.

Expansion of bank credit happens when interest rates are reduced, which means, the loans are cheaper. Due to liberal loans, the profit margins change as they are very sensitive to the change in interest rate.

Thus, investment increases and so the employment, which in turn increase the income and demand. This increase in demand leads to increase in price and profit margins. Therefore, the upward trends start i.e., the upswing starts. But as each phase has the germs of other phase, the turning point starts. When bank changes its policy of credit expansion, the cash reserve with the bank reduces.

The leading rates are increased to discourage the demand for fresh loans and they start calling to return loans. The producers start disposing off their stock to repay loans. The restricted policy on credit and high rate of interest discourages a new investment, which leads to downswing. The income falls and cash starts coming back to the bank. But as the cash reserve with the bank improves, again the bank starts using liberal attitude towards credit creation and so the revival starts. This takes the economy to expansion or prosperity. According to R G Hawtrey flow of money supply is the sole cause for business fluctuations. This theory was not unchallenged. Some limitations are –

Business cycle is a very complex phenomenon and we cannot attribute it completely to credit creation by banking system.

Bank plays an important role in the financing of business but it cannot be the only reason for business crisis. It can just aggravate the situation.

Too much of importance is given to bank credit. Many times traders don’t borrow from bank but plough back their profit.

Investment not only depends on interest rates but on the rate of return also. Hawtrey has totally ignored MEC.

This theory has totally ignored the non monetary factors like innovation, climatic conditions, psychological factors etc.

This theory also has been taken from business cycle chapter of Managerial Economics SMU MBA MB0026 book in the continuation of Over-Investment theory and Schumpeter theory.

Over-Investment Theory of Business Cycle from Managerial Economics

2010-04-12T02:58:00.000-07:00

A.F. Hayek assumes economy in equilibrium. Whenever this equilibrium is disturbed then there is expansion or contraction. This theory says that when the economy is in equilibrium, the rate of interest is such that Saving = Investment there is no unemployed resources.

Suppose the bank credit expansion takes place, then the equilibrium rate of interest is disturbed. This low market rate of interest will tempt the businessmen to borrow more and invest in new ventures. This leads to upswing in business cycle; as a result employment, output, profit and demand increases.

But then this phase does not continue indefinitely. Due to scarcity of resources, this expansion phase cannot go on and on. But due to increase in price, the people are forced to decrease consumption and start saving more. This forced saving due to high price makes the bank ease credit and investment starts.

The economy comes out of its downswing as income increases and people revert to earlier consumption and expenditure levels. This helps economy to recover and the upswing starts again. This theory says that the over investment due to forced saving by people in inflation is the cause of fluctuations in economic activities. Hayek says, voluntary saving leads to change in structure of production permanently but forced saving brings changes which are not permanent.

The limitations for this theory are –

Assumption of full employment is unrealistic.

Undue importance is given to bank’s rate of interest. Even if the rates of interest are constant, there will be variation in production when the business stars getting profits.

We already have discussed about Schumpeter theory of business cycle. This theory was also not complete just like Over-Investment theory of business cycle. A.F. Hayek assumes about the Over-Investment theory of business cycle. He sees only one aspect just like Joseph Schumpeter. There are also many disabilities in Hayek’s Over-Investment theory.

Schumpeter Theory of Business Cycle in Managerial Economics

2010-04-05T21:15:00.000-07:00

Joseph Schumpeter has explained the expansion and contraction through industrial innovation. Innovation is an actual application invention; whereas invention is discovery of something new.

Invention converts into innovation. In this theory, the innovation can be introduction of new product, market source of raw material, opening of new market in business. An entrepreneur is an innovator, he has the knowledge to do something new, daring and foresight to go ahead of others and in this process he demands funds from banking system. Now, we will examine how innovation causes business fluctuations. In this theory, Schumpeter says, any innovation causes business fluctuations. In this theory, Schumpeter says, any innovation can move the economy to disequilibrium from equilibrium and this will continue till the new equilibrium position is reached. Let us say the innovation is the introduction of a new product in a full employment economy.

The new industry has to reward heavily the existing factors of production to attract them. The new industry is financed by bank credit. As the factors of new industry get higher rewards, their purchasing power increases and the demand of old industry product increases, as the new product is yet to come in the market.

Therefore the demand and production of old products increases. The old industry will now take credit from bank for expansion. In the mean while, the new product comes to the market. Due to novelty, there is decrease in the demand for old products. The old industry starts cutting down on production, therefore the income to factors of production decreases. As a result, the demand for old and new product decreases. Due to more and more joblessness the vicious circle of deflation starts and the economy gets into down swing. So, this theory says that the economic fluctuations are due to innovation in the industry.

This theory was challenged and limitations are –

The full employment assumption is unrealistic.

Bank is not the only source of finance for every innovation in business.

Many times the profits are ploughed back to finance innovations.

Innovation cannot be the sole cause of business cycle.

The chapter has been introduced in the continuation of phase of business cycle.

Phases of Business Cycle in Business and Financial Market

2010-03-29T05:46:00.000-07:00

After understanding what are business cycle and their characteristics, we will take each phase of business cycle in detail.

Prosperity or Expansion:

This phase of business cycle is called the upswing. This phase is in the upper half of the cycle. To start with, we will try to see how this phase begins. It starts from equilibrium position. When the demand increases, the demand of raw material also increases and so the employment which again leads to increase in employment in other industry. As the consumption increases, general employment also increases. The wages, salaries, interest rates, taxes and the cost do not increase in the same proportion and consequently profit margins go up. There is a general feeling of optimism, and the production capacity of the economy is fully utilized. The rise in general price is marked in this phase.

In this phase, investment activity increases due to increase in demand for consumption goods. This optimistic sentiment can be seen in real estate and share market boom. Manufacturers pile up stock with improved prospects of increase in demand. This activity of producers’ increase in production is faster than consumption. But this process cannot be indefinitely continued. This phase ends and turns into phase of recession. The factors for recession to start are, when the gap between cost and price starts rising and the profit margin declines. This happens because of scarcity felt in different factor market and therefore the price of factors of production rises.

Recession:

This is a turning period, which is relatively shorter. But in this phase the production of consumer goods do not decline immediately. The demand for consumer goods fall with lag but the fall in demand for capital goods falls drastically. Producers cancel their future investment programmers so the demand for machinery decreases and therefore the capital goods manufacturing sectors respond more quickly. In this period over optimism gives way to over pessimism. All the investment seems unprofitable and so there is collapse in Marginal Efficiency of Capital. The employment situation gets bad as investment activity declines. This is referred as mild recession but when recession is severe it is called crisis.

Depression or Contraction:

This phase is a phase of low economic activity. There is a fall in production and employment throughout the economy. But it is not uniform in all sectors. The fall in demand for consumer goods is less than the fall in demand for machines and equipment. During depression, the expenditure on durable goods fall more than consumer goods. Therefore, the production and employment is affected in the sectors producing durable goods. Agriculture sectors are not much affected, as it is necessary for subsistence. The producers and wholesalers start liquidating their inventories piling up during prosperity phase. This phase shows low economic activity with fall in production, fall in employment and fall in general price level and the profit margins also. Producers are not interested to venture fresh investment as the MEC totally collapses.

The price structure is distorted as for some goods, price falls a little; whereas for some goods, the price vertically collapses making the income distribution worst and this prolongs the phase of depression. On the other hand, not all the costs fall at an equal rate; as wages and salaries tend to be sticky during this period due to trade unions about labour laws. Rents, interest rates and taxes come down slowly, while price falls down continuously and cost rigidity washes away the profit margins for producer. Turning point of depression is ‘trough,’ which is a very short period but sometimes it is for 3-5 years. For e.g. the Great depression of 1930s. After this, the recovery phase starts.

Recovery:

This phase is gradual. It starts when the price stops falling. This is said to start when the piled up stock is exhausted. Now, the producers start planning for production. This generates employment and income, which again leads to demand for consumer goods. The MEC starts improving. This leads to correction of price and so also to the relationship between cost and price. The profit starts replacing looses and recovery gathers momentum. Rising price encourages companies towards new investment and projects. This phase of recovery takes the economy to the phase of prosperity. Thus, the cycle is again ready to repeat itself.

Now we know what a business cycle and the phases of business cycle. In the next section, we will try to understand the theories of business cycle. They will explain you the causes of business cycle.

Business Cycle and Characteristics of Business Cycle

2010-03-15T01:38:00.000-07:00

Business cycle is also called Trade Cycle. The business is never steady. There are always ups and downs in economic activity. This cyclical movement both upwards and downwards is commonly called Trade Cycle. This is a wave like movement in regular manner in business cycle. In business, there are flourishing activities, which take economy to prosperity and growth whereas there are periods when there is recession, which leads to decline in the employment, income and output. When the economy goes into downswing then there is a stage of recovery to reach a new boom.

Definition and characteristics of business cycle:

Definition:

According to Keynes, “Trade Cycle is composed of periods of good trade characterized by rising price and low unemployment percentage altering with periods of bad trade characterized by falling price and high unemployment percentage.” In the simple words – Business Cycle is a fluctuation of the economy characterized by periods of prosperity followed by periods of depression.

Characteristics of Business Cycle:

The fluctuations are wave like movement and are recurrent in nature.

Business Cycle is characterized by waves of expansion and contraction. But these are not only two phases of business cycle. There are four phase of business cycle – Expansion, Recession, Contraction and Revival or Recovery.

The movement from peak to trough and again though to peak is not symmetrical. According to Keynes, prosperity phase of business cycle comes to end fast but dip is gradual and slow.

Business Cycle is self generating. Every phase has germs of the next phase, that is, expansion has the germs of the recession in it.

In this chapter we learnt about business cycle and its characters and definition. However, we already have studied about marginal efficiency of capital and investment in business by this blog. Business cycles are everything which determines your business objectives.

Marginal Efficiency of Capital and Investment in Business

2010-02-07T21:23:00.000-08:00

Marginal efficiency of capital and rate of interest are the main factors which affect investment. Demand analysis is the basic aspect of investment.

Marginal Efficiency of Capital (MEC) – Any investment decision depends not only on rate of interest but also whether or not the expected rate of returns on the investment is greater than cost of borrowing the funds. In these two factors, the MEC is an important factor because MEC is the expected rate of returns from the investment. If the returns expected are low, then the investment is not profitable because in short run, rate of interest is stable. In MEC, capital means the real productive assets. MEC depends on expected rate of returns of a capital asset over its life time which is also called Prospective Yield and the supply price of capital assets. Any business man will weigh the prospective yield with the supply price before investing.

Investment and rate of interest: Rate of interest is considered the most important factor in investment will be low and vice-versa. This was a view given by classical economists. They considered rate of interest as the only factor determining investment.

MEC, Rate of Interest and Investment Decisions:

The businessmen will decide whether to purchase on the marginal unit of capital by comparing the prevailing rate of interest with the MEC.

If MEC Rate of interest, this additional investment will get profit and investment is profitable.

MEC Affecting MEC:

There are some short term and some long term factors.

Short term – Under these factors are:

Expected Demand for Future

Level of Income

When Consumption Changes

Business Expectation

Long Term Factors:

Population Growth

Economic Policies of Government

Infrastructures facilities

Limitation of MEC:

Investment done by the Government for social purpose has no connection with the MEC.

Practically it is difficult to estimate MEC.

Whenever there is contractionary monetary policy, the firms may not find funds even if the projects or investments are profitable

Every time the businessmen do not necessarily go for loans. Sufficient funds are gathered by the businessmen for some projects, which are planned for a long time.

Consumption Function and Law of Consumption from Managerial Economics

2010-01-16T22:47:00.000-08:00

Consumption function is the basic theories given in Macro economics. We already have discussed about the theory of consumers surplus and analysis of market structure. Now, we will raise a debate on consumption function and law of consumption. The theory is taken from Managerial Economics book of SMU. It is MB0026 book code of Sikkim Manipal University for MBA.

Psychological Law of Consumption:

Consumption means using goods and services for satisfying current wants. We spend major portion of our income on consumption. Consumption expenditure means house hold spending, which satisfies our immediate wants. Under this section, we will study the relationship between consumption and income. The pattern of consumption expenditure for all families is more or less the same. We can see that families have tendencies to increase consumption with increase in income. This relationship between consumption and income is called consumption function. Consumption is a function of income.

C = f(Y)

C – Consumption

f – Function

Y- Income

C = a+bY

C – Consumption

A – The level of consumption which will exist when the income is 0

bY – Consumption income ratio or APC

MPC

Marginal Propensity to Consume is the ratio of change in total consumption to change in total income.

It says that when income increases, the consumption will increase, but less than the increase in income. This is called the Psychological law of consumption. People do not consume all the increase in income in the current period, because they have to save for their future. This consumption behavior of a family helps us to understand community behavior. J. M. Keynes introduced the concept of consumption function at macro level as aggregate consumption function. The theory of consumption and law of consumption will help you in the analysis of business and market. It is the analysis of the managerial economics.

A Theory of Consumers Surplus and Example of Surplus of Consumers

2009-11-14T01:42:00.000-08:00

Surplus of consumers are considered as the significant in the cost-benefit to analysis on the public investment for the welfare of the society. Rate of the product is always less than what a person is willing to pay for it. The difference between consumers wills to pay and those actual pays lead to satisfaction which is consumer surplus.

On the other hand, surplus of producer exists when actual price exceeds the minimum price that the seller is ready to accept. Resource owners usually captured producer’s surplus.

Meaning of Consumer Surplus:

At first, Marshall had proposed the theory of consumer surplus which is based on demand theory. He states, consumer surplus is a part of the benefit, which a person derives from his environment or conjuncture. The price, which a person pays for a product is always less than what he is willing to pay for it.

So, the difference between the amounts of consumer is willing to pay and what he actually pays is known as the satisfaction which is consumer surplus. Take an example of consumer surplus –

If a consumer is willing to pay Rs. 5 for one orange and the actual price is Rs. 3, then the consumer surplus is Rs. 2.

In this diagram, the DD1 is the curve for a commodity. If OP1 is the price then the quantity demand is OQ1. The consumer is ready to pay OD price but actually he pays OP1. So the consumer surplus is P1R1D, (Q1R1D-OP1R1Q1 = P1R1D).

Now, let us assume that the price comes down to OP2. In this situation, the quantity demanded will increase to OQ2; that is due to decrease in price, the consumer surplus will increase. So the new consumer surplus is P2R2D. That is, there is increase of consumer surplus by P2R2R1P1 (P1R1D+P1R1R1P2). This increase in consumer surplus is due to decrease in price. If the price increases there will be decrease in consumer surplus.

Analysis of Market Structure and Trends of Property Market

2009-10-12T03:03:00.000-07:00

To define about market structure we will take a definition of French Economist, Cournot - “Market in economy is not the place where purchases and sales of a commodity take place.” Till now there are many ways of categorization of market structure but we will discuss here on some basic characters of market.

Number and Size of sellers:

Number of sellers decides the seller’s size. If there are large number of sellers, influence of one firm will be very small. If there is few numbers of sellers in market, every firm will have enough influence over price and supply. Market can be in dominant function if there are enough influence over price and supply.

Number of Size Distribution of buyers:

If there are many buyers, they will pay same price. If there is single buyer, he will be able to demand lower price.

Product Difference:

Product difference is known as the degree at which one product differs from the other in market. If there is differentiation of products, the decision of buyers will be based on price. To survive in market, every firm differentiates its product and tries to create imaginary difference.

Condition of Entry and Exist:

Entry in market is the biggest challenge for new product and firm. “Entry” is when a new firm is attracted by high profiles. If there are no substitutes available in the market, the firm can make decision without worrying about losing buyers.

Exit from industry happens when firms incur loss and the resources used can be used in producing other products. The firm will exit this industry and enter new industry, where the firm can use same resources. But if the resources have highly specialized uses and very few alternate uses then the exit will be difficult and costly decision.

So, this is the analysis of market on the base of market structure. We learnt about - how market survives among buyers and sellers, what are the trends of buyers and sellers in a market etc. Property market also runs on this concept. So, trends of property market are the very similar to this analysis.

Revenue Analysis and Pricing Policies in Property Market

2009-09-07T21:10:00.000-07:00

Revenue is a type of income which is received by the firm. It is related to Total Revenue, Average Revenue and Marginal Revenue.

Total Revenue (TR) – It is total income of a firm by selling a commodity at a price. We can indicate it as:

TR = PXQ

TR = Total Revenue
P = Price
Q = Number of Units

Average Revenue (AR) – We can find it by dividing the Total Revenue with the number of units sold. It can be indicated as:

AR = TR/Q

TR = Total Revenue
Q = Number of Units

Marginal Revenue (MR) – It is the addition to the Total Revenue as a result of increase in the sale of an addition unit by the firm.

Relation between TR and Price Elasticity or Demand:

If the price elasticity of demand for his product is relatively inelastic (Ep <1),>1), increase in price will decrease it TR.

We can express via a diagram

When Price increases and Ep is relatively elastic i.e.

On the other hand we can say it as – When price decreases and Ep is relatively elastic i.e. (Ep <1)

In the condition of When price increases and Ep is relatively inelastic i. e.

There is another aspect also, when price decreases and Ep is relatively inelastic i.e. (Ep <1).

At last, we can say prices once fixed can not be kept constant forever; it has to be revised according to the condition and the economic situation. The main objective of pricing policy is to maximize profit for the firm, stability is necessary to win the confidence of the customers and it should be able to capture enough market for the firm.

Penetration pricing is when the firm charges low price than what the economic analysis is the practice of charging a price more than indicated by the economic analysis while introducing a new product and when the competition is weak.

Property Market is also Depended on Demand Analysis

2009-08-20T08:10:00.000-07:00

There is a big difference between demand and want. Demand can’t be just want. The want, which are backed with purchasing power are called demand. Economics has a different definition about demand. The ability to pay is called demand in economics. Desire also can’t be a demand. For example – a beggar desires to purchase a car, can’t be demand in the word of economics.

Law of Demand:

There is a simple rule of demand, as price increases the demand decreases and as price decreases demand increases. But only price is not factor which affects the demand or supply.

Demand Schedule:

Quantity Demand

Exceptions of Demand Law:

Giffens Goods – Giffens goods is known by the name of Sir Robert Giffens. On the Giffens goods, law of demand doesn’t work as the price of those goods increases when there is increase in the quantity demanded and when the price decreases there is decrease in the quantity demanded. For example, people will prefer to use meat than potatoes when meat is cheaper than potatoes.

Ignorance effect – According to the law of demand, some people still buys those products which have quality while they are not cheaper.

Status symbol – In these categories, status symbol commodities take place like - jewellery, diamonds etc.

Speculation - Law of demand doesn’t work in the speculation of stock market.

There are some other factors also which affect the law of demand – income, price of related products, taste and preferences.

Income – It is the natural aspect to consume productive products. As income increases, demand increases.

Price of related products – For example – car and petrol are price of related products. As petrol prices decreases, car demand will increase.

Taste and preferences – taste and preferences are also related to each other. It depends on personal consumption and services.

At last, we conclude that all the market whether it is property, real estate or retail all are depended on each other.

Way of Generating Real Estate Revenue

2009-07-10T08:22:00.000-07:00

In the recession many companies are planning various ways to generate revenue from their business. Real Estate sector of India is also a big industry. In the real estate there are many big and small companies which are planning various ways to generate revenue from this industry.

I have analyzed a company revenue model which is from real estate sector. I am going to share the company revenue model. I have already share about the company in my previous post. Now, here I am going to share company’s revenue model.

The real estate company has call center revenue which has been explore in this way:

Product to promote:

Company has launched a mobile application for real estate adviser.

Adviser Model of the company:

Adviser model is a channel partner which working part time, full time with PropertySensex to promote 0% brokerage services to property buyers. The company proclaims, “To make it more users friendly we have introduced Buyer Seller Mobile Application, as a Product of mobile (Mobile users, market and growth pace).

Real Estate Revenue:

Company has sacrificed brokerage from buyers to promote adviser ship to make easy to beat competition and get easy business. In short they are free services for promoters. Company is sharing up to 20% for its brokerage form sellers. Adviser can sell all the Real Estate Projects under one roof without taking multiple paid registrations with better variety and margins then existing brokers.

He/she can generate leasing leads for across India and execute it with the help of our Service Network, Readymade offices, Property on wheel fleet across India, Builder, Broker Network, corporate tie-ups. Mobile is user-friendly mode and SMS is fast and cheap method for property business.

This is what the company thinks. Still it is not reality. I am showing only advertisement of the company revenue model. The company has to start 1st real estate chain in India in property business. There are many companies in the recession who claims this type of revenue models which are for common people but how effective they are, still undecided. Personally, I have still not seen this type of business model. Actually, these types of companies want to invest by common people in their business.

India’s first Real Estate Retail Chain Company and Its Adviser Model & POW

2009-06-13T01:07:00.000-07:00

PropertySensex announces to establish it as an India’s 1st real estate retail chain company. The company offers services in real estate sector as a single vendor in commercial, residential, farmhouses, office spaces and in flats properties. The company has expertise staffs for leasing commercial properties anywhere across India on 0% brokerage. It has given services as commercial space, office space, show room space, lease space and rent space for big corporate also like – TATA AIG Life Insurance, Max Life Insurance, Bharti AXA Life Insurance, Religare, Aviva, Subhiksha, Spencer Retail, Vishal Mega Mart, Wall mart and many more.

Let we justify adviser model of the company, how it works:

An adviser can be anywhere across India to deal the local requirement of property. Company assumes that an adviser will understand all the problems and requirements locally which will make easier to deal a property.

By the model the company can know closely the local problems and requirement through an adviser. Suppose the company gets an SMS by an adviser from NOIDA with the requirement of a commercial space, company call center will check the locality and send the requirement of local office. Local office of the company will contact with that person to show the commercial space of NOIDA with updated prices. The company has collections of all the offices and commercial spaces across India with updated prices. So, delay is not possible here.

This time the company needs a cab to show the property. So that, it have launched a car that called “property on wheel (POW)” that will be one of the resources of services.

A cab will reach to that person to property location that would be free of cost. It shows all the property according to the requirements of buyer by that cab on 0% brokerage. After the deal it will credit a 20% amount of commission to its adviser’s account because the company has software which will let it know, from whose adviser the lead had come.

This process will make easier to deal a property and increase trust to its services. It will create a huge number of clients and customers also in future. The company will work to join adviser across India. The adviser will create channels of sub adviser. Through this channel an adviser will earn 1000 for each pair.

The Property Company has made all these process easier to establish a call center. Any person either who is an adviser or customer has to call on a toll the company to join as an adviser.

Property on Wheel (POW)

Property on Wheel (POW) is another model of this company which will be in the support of advisers. The company announces that on each 100 adviser it will offer a cab to show the property on 0% brokerage model.

All the cab will be occupied with GPS (Global Positioning System) technologies to monitor the vehicles. It has tracking software to support the services. When a customer will call it to show a property, its backend call center will find nearest cab and dispatch to that for the customer.

It offers single calling number across India to make the process easy. This is because the company only wants to simplify its services. If it gets a call from a local town, it will trace that call’s locality and will submit to the local offices.

The service POW is only for buyers not for sellers. If sellers are interested in this service then it will be paid for them.

In every territory the company has managers and head that will operate all these services very effectively. Its car will run from 9AM to 6PM. It has offered an option to the adviser that if he has a car then the company will convert that as PropertySensex car. It is just because, it want to build a serious and dedicated team across India.

Property on Wheel will be a method of getting calls from buyers. It will advertise the company services, posters and phone numbers. It is not a single method of advertising but surly it will be one of the effective methods of advertising.

POW will be one of the effective media to advertise its business and will create trust among people who are interested in buying commercial properties or office spaces.

The company offers 0% brokerage for buyers because of to get maximum footfall, to make client feel free to approach it, to make loyal customers, to increase sales and to create trust in real estates market.

Advisor Model to Start own Business in Real Estate Sector

2009-05-10T10:19:00.000-07:00

All industries in all over world are facing crisis, today. Specially, Property and Real Estates industry are in losses. In the mid of crisis PropertySensex has launched India’s 1st real estates retail chain as adviser model.

On the adviser model the company announces that an adviser is a person who wants to do part time and full time job to earn extra money just giving advice about property. The opportunity will be provided by NetworkSensex which is a part of PropertySensex.

The program will run on unique concept which will provide 0% brokerage for buyer. An adviser has to just send an SMS to know us if a buyer interested to buy a property anywhere in India. In this process an advisor will earn 20% commission on the deal of a property.

To join as an adviser with us a person has to show his interest for the program. The program is on unique concept which will run on binary system.

Binary System to earn from being an adviser

What have to do as an Adviser?

An adviser has just to send us an SMS to know:

One of his friends are looking for a flat

A commercial company is looking for office space

One of his relatives are searching for a residential plot

A business company is looking for farmhouse

How an adviser will earn?

An adviser will refer us a buyer who is interested in buying. After having completed deal an adviser will earn 20% commission as against total 100%.

The company runs a system on a unique binary concept so, on the joining time an adviser has to refer minimum 50 contacts on the credit of Rs 20 each contact. An adviser can refer 100 people maximum on the credit. The form will be online which is mandatory to fill to activate you as an adviser. On the contact of adviser lists, our call center will call to those persons and explains to them about our adviser model to join. If a pair joins below you, you will be credited by default a lump sum of Rs 1000.

There are two processes to join as an adviser below you. You can convince a person directly or we will convince those people through calling to join below you.

To expose these programs we are running many campaigns like – Property on Wheel, T-Shirt of an Adviser model, Media campaigns, Through Online, Through SMS etc.

Through this adviser model a person can earn up to one lakh minimum and an extra ordinary person can earn up to 10 lakh.

Company wants to give quick return on your investment. On the joining time to become an adviser you have to just pay Rs 7020. In this model a person can join directly we to become an adviser or a person can join below an adviser also.

By this process the company just want to build a team across India (further in all over world) which can fulfill the requirement of a customer who wants to buy any type of property – commercial, farmhouse, residential, flat, offices etc.

As a company PropertySensex introduce the model to satisfy people need. The company has resources, infrastructures, men power and software to handle all the requirements very easily. If an adviser refers us to a buyer and we complete that deal very quickly then the buyer surely refer to another person to our adviser next time. This process will create a trust in market.

It is the simple model which understands the customer need because it is on 0% brokerage. Most of the people are unsecured due to brokerage charges, insecurity and lazy deal. To understand all these problems we have created the program to launch an adviser model.