What is Investment?
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.
Why should one invest?
One needs to invest to:
§ earn return on your idle resources
§ generate a specified sum of money for a specific goal in life
§ make a provision for an uncertain future..
What are various options available for investment?
One may invest in:
§ Physical assets like real estate, gold/jewellery, commodities etc.
and/or
§ Financial assets such as fixed deposits with banks, small saving
instrume nts with post offices, insurance/provident/pension fund etc.or securities market related instruments like shares, bonds,debentures etc.
What are various Short-term financial options available for investment?
1)Savings Bank Account
2)Money Market or Liquid Funds
3)Fixed Deposits with Banks
What are various Long-term financial options available for investment?
1)Post Office Savings
2)Public Provident Fund
3)Company Fixed Deposits
4)Bonds
5)Mutual Funds
What is an ‘Equity’/Share?
Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 20,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.
OECD: India's Economic Growth is sustainable
India's current economic growth - averaging 8.5 percent annually over the past four years - appears sustainable, but it can do better by opening its markets and easing government control, the Organization for Economic Cooperation and Development said Tuesday.
The Paris-based economic grouping of 30 countries gave much of the credit for India's rapid economic expansion in recent years to its government's efforts in the early 1990s to switch from a socialist-style state to a market-driven economy.
Over the past 15 years, India has significantly opened its markets to foreign competition, cut down government intervention in economic activities and liberalized policies to allow a bigger play for private capital.
As a result, "the sustainable growth rate of the (Indian) economy has reached 8.5 percent," the OECD said in its first-ever survey of India, released in New Delhi. That is the average pace at which the economy grew in the past four years.
Separately Tuesday, credit rating agency Standard & Poor's predicted 8.6 percent growth for India's gross domestic product in the current fiscal year ending March 2008.
Such economic expansion will help India double its per capita income in a decade, the OECD report said. It would have taken India 55 years to double average incomes if it had stayed on the growth path experienced in the three decades following the country's independence in 1947, the report aid.
Still, many economists remain concerned that much of the growth is concentrated in areas like telecommunications, information technology and other services sectors - and that many Indians, especially in rural areas, have benefited little from the boom.
More than 300 million people in India still live on less than the equivalent of $1 a day.
"This growth is meaningless if it is not inclusive," said Isher Judge Ahluwalia, who heads the Indian Council of Research in International Economic Relations, a New Delhi-based think tank.
The Indian government says it wants the economy to grow even faster so that more people can benefit from it.
OECD Secretary General Angel Gurria said "it is possible" for India to accelerate its economic growth to 10 percent if the country moves quickly to build infrastructure, reforms its labor market and further opens up to foreign capital, especially in the financial and energy sectors that are still dominated by state-run firms.
"The impressive response of the Indian economy to past reforms should give policy makers confidence that further liberalization will deliver additional growth dividends and foster the process of pulling millions of people out of poverty," the OECD report said.
Meanwhile, foreign investors have increasingly flocked to India to seize opportunities in one of the world's fastest-growing economies. Foreign funds have already bought more than $14.5 billion in Indian stocks this year, according to Securities and Exchange Board of India.
That money, which has come on the top a record $16 billion the country received in foreign direct investment through last fiscal year, has helped Indian shares reach record highs.
On Tuesday, the Bombay Stock Exchange's 30-share Sensex rose 4.5 percent to cross 18,000 for the first time. The index has gained more than 2,000 points, or 13 percent, in just 14 trading sessions
The Paris-based economic grouping of 30 countries gave much of the credit for India's rapid economic expansion in recent years to its government's efforts in the early 1990s to switch from a socialist-style state to a market-driven economy.
Over the past 15 years, India has significantly opened its markets to foreign competition, cut down government intervention in economic activities and liberalized policies to allow a bigger play for private capital.
As a result, "the sustainable growth rate of the (Indian) economy has reached 8.5 percent," the OECD said in its first-ever survey of India, released in New Delhi. That is the average pace at which the economy grew in the past four years.
Separately Tuesday, credit rating agency Standard & Poor's predicted 8.6 percent growth for India's gross domestic product in the current fiscal year ending March 2008.
Such economic expansion will help India double its per capita income in a decade, the OECD report said. It would have taken India 55 years to double average incomes if it had stayed on the growth path experienced in the three decades following the country's independence in 1947, the report aid.
Still, many economists remain concerned that much of the growth is concentrated in areas like telecommunications, information technology and other services sectors - and that many Indians, especially in rural areas, have benefited little from the boom.
More than 300 million people in India still live on less than the equivalent of $1 a day.
"This growth is meaningless if it is not inclusive," said Isher Judge Ahluwalia, who heads the Indian Council of Research in International Economic Relations, a New Delhi-based think tank.
The Indian government says it wants the economy to grow even faster so that more people can benefit from it.
OECD Secretary General Angel Gurria said "it is possible" for India to accelerate its economic growth to 10 percent if the country moves quickly to build infrastructure, reforms its labor market and further opens up to foreign capital, especially in the financial and energy sectors that are still dominated by state-run firms.
"The impressive response of the Indian economy to past reforms should give policy makers confidence that further liberalization will deliver additional growth dividends and foster the process of pulling millions of people out of poverty," the OECD report said.
Meanwhile, foreign investors have increasingly flocked to India to seize opportunities in one of the world's fastest-growing economies. Foreign funds have already bought more than $14.5 billion in Indian stocks this year, according to Securities and Exchange Board of India.
That money, which has come on the top a record $16 billion the country received in foreign direct investment through last fiscal year, has helped Indian shares reach record highs.
On Tuesday, the Bombay Stock Exchange's 30-share Sensex rose 4.5 percent to cross 18,000 for the first time. The index has gained more than 2,000 points, or 13 percent, in just 14 trading sessions
A Sino-Jap Battle for Iron Ore
A quiet Sino-Japanese skirmish in the wild west of Western Australia over iron ore flared hotter Wednesday, with Japan-backed Murchison Metals launching a pre-emptive hostile takeover of smaller rival Midwest Corp.
Murchison’s offer, valued at up to 986 million Australian dollars ($887 million), came after the West Australia state government confirmed Monday that it had given up hope that the two competitors would work together and decided instead to choose only one to develop rail and port links to iron ore deposits that the two companies are developing in the remote midwest region of the state.
Ostensibly, the takeover battle is being fought among two mid-size Australian iron ore producers. Both, however, are deeply entwined with Chinese and Japanese interests that are competing for increasingly expensive metal resources.
Murchison is allied with Japan’s Mitsubishi Corp. (other-otc: MSBHY - news - people ), which agreed in June to a joint venture partnership in which it will buy half of Murchison’s iron ore production.
Murchison also has South Korea’s largest steel maker, Posco, as a major shareholder and a key customer.
Midwest is aligned with Chinese commodity trader Sinosteel Corp., which is backing its iron ore projects in the region. China passed Japan as the world’s largest buyer of iron ore in 2003.
Murchison is about 2.5 times larger than Midwest in terms of market capitalization.
A showdown was seemingly inevitable as neither side would like to see the other party win the government’s tender as the sole developer of the rail-port infrastructure project.
Midwest advised its shareholders to stay put before its board has a chance to review the merits of Murchison offer.
Paul Kopejtka, Murchison’s executive chairman, said merger talks between the two companies had failed and that recent events had also made the timing of the bid sensible.
“The value that can be generated by combining these companies will diminish over time as each company moves forward with separate development plans,” he said.
Murchison said combining it with Midwest would create Australia’s second-largest listed iron ore producer after Fortescue Metals and a major pure-play iron ore producer with targeted 2008 production of 45 million tons.
Its two-tiered offer offers a sizable carrot for Midwest to dissolve its planned joint venture with Sinosteel: an all-stock 4.70 Australian ($4.23) bid for each Midwest share, a 34% premium over its Monday close, or 986 million Australian dollars ($887 million).
However, if Midwest incurs a “material tax liability” by selling a 50% interest in its development projects in Weld Range and Koolanooka to Sinosteel, a lower offer would be on the table at 4.38 Australian dollars ($3.95) per share, a 25% premium, or 919 million Australian dollars ($826 million).
Murchison was up 2.17% early Monday afternoon at 5.19 Australian dollars ($4.68). Midwest soared 29.63% to 1.04 Australian dollars (94 cents).
Murchison’s offer, valued at up to 986 million Australian dollars ($887 million), came after the West Australia state government confirmed Monday that it had given up hope that the two competitors would work together and decided instead to choose only one to develop rail and port links to iron ore deposits that the two companies are developing in the remote midwest region of the state.
Ostensibly, the takeover battle is being fought among two mid-size Australian iron ore producers. Both, however, are deeply entwined with Chinese and Japanese interests that are competing for increasingly expensive metal resources.
Murchison is allied with Japan’s Mitsubishi Corp. (other-otc: MSBHY - news - people ), which agreed in June to a joint venture partnership in which it will buy half of Murchison’s iron ore production.
Murchison also has South Korea’s largest steel maker, Posco, as a major shareholder and a key customer.
Midwest is aligned with Chinese commodity trader Sinosteel Corp., which is backing its iron ore projects in the region. China passed Japan as the world’s largest buyer of iron ore in 2003.
Murchison is about 2.5 times larger than Midwest in terms of market capitalization.
A showdown was seemingly inevitable as neither side would like to see the other party win the government’s tender as the sole developer of the rail-port infrastructure project.
Midwest advised its shareholders to stay put before its board has a chance to review the merits of Murchison offer.
Paul Kopejtka, Murchison’s executive chairman, said merger talks between the two companies had failed and that recent events had also made the timing of the bid sensible.
“The value that can be generated by combining these companies will diminish over time as each company moves forward with separate development plans,” he said.
Murchison said combining it with Midwest would create Australia’s second-largest listed iron ore producer after Fortescue Metals and a major pure-play iron ore producer with targeted 2008 production of 45 million tons.
Its two-tiered offer offers a sizable carrot for Midwest to dissolve its planned joint venture with Sinosteel: an all-stock 4.70 Australian ($4.23) bid for each Midwest share, a 34% premium over its Monday close, or 986 million Australian dollars ($887 million).
However, if Midwest incurs a “material tax liability” by selling a 50% interest in its development projects in Weld Range and Koolanooka to Sinosteel, a lower offer would be on the table at 4.38 Australian dollars ($3.95) per share, a 25% premium, or 919 million Australian dollars ($826 million).
Murchison was up 2.17% early Monday afternoon at 5.19 Australian dollars ($4.68). Midwest soared 29.63% to 1.04 Australian dollars (94 cents).
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