Investment Valuation in India

Apple Inc (NASDAQ:AAPL) beat its own record in highest market capitalisation by crossing USD 700 billion markon November 25th, 2014. The shares of the company recently touched USD 118 taking its market capitalisation to a new record high of USD 701 billion. It is already the largest company in the world by market capitalisation. The second largest company Exxon Mobil Corp (XOM) now trails at a market capitalisation of USD 405 billion. The company's CEO Tim Cook has continued to focussed on innovation just like Steve Jobs and has steered the company towards new highs. This has resulted in a 12.4% increase in revenues to USD 182 billion (ttm). Higher valuation for the company is also justified through its high Profit Margin of over 21% and a Return on Equity of 33.6% [Source: Yahoo Finance, 25-Nov-14]. At the product level, the markets have cheered the larger screen iPhones and slimmer iPads launched in September and October respectively. Competing with Samsung, Apple is plann...

LIBOR LIBOR stands for London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged while borrowing from other banks. It is the primary benchmark, along with the Euribor, for short term interest rates around the world. As a popular benchmark, it is used for US Dollar, GB Pound, Euro, Swiss Franc, Canadian Dollar and Japanese Yen. Libor rates are calculated for ten currencies and 15 borrowing periods ranging from overnight to one year and are published daily at 11:30 am (London time) by Thomson Reuters. The British Bankers Association (BBA) collects data from 16 banks to calculate LIBOR for each maturity and for each currency. It weeds out the best four and the worst four and then calculates the average of remaining 8 rates which is published as LIBOR. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to it. At least $350 trillion in derivatives and other financia...

Growth vs Dividend Option in a Mutual Fund When we select the fund for investing, often, the funds offer you the option of Growth Plan or the Dividend Option. It is important to understand the difference between the two and to select the option best suiting the needs and taxability aspects for an individual. Regular Income: The dividend option helps you get regular income (for example, for senior citizens). The growth option does not help you get regular income. Building Wealth: Since the dividend option gets you money at regular intervals, you cannot get the benefit of compounding. It is not suitable for building wealth. The growth option, instead, helps you build wealth over time and income gets compounded. Growth option is suitable for people wanting to save for future (example, child’s marriage, higher education etc) Tax Treatment: While dividends from equity oriented funds are tax free, if the fund is a non-equity fund, there is a Dividend Distribution Tax (...

The last few days has seen some significant policy announcements by the government the absence of which, for long, was coined as the government’s policy paralysis. - Diesel prices have been increased by close to 12% - Allowed 51 per cent foreign investment in multi-brand retail (remember, this was allowed last year as well, but could not be implemented due to political opposition) - Allowed 49 per cent investment by foreign airlines in aviation - Raised the FDI cap in broadcasting from 49 per cent to 74 per cent - Capped subsidised LPG cylinders by a household to 6 cylinders in a year, more cylinders if required will have to be purchased at market rate that is approximately Rs 750. While most of the above are being seen as extremely positive moves in order to avoid a credit rating cut that’s being threatened by rating agencies, these cannot be termed as big-ticket reforms. A lot more needs to be done in order to bring the economy back on the growth track. Perhaps, it is th...

Key Features of Budget 2012-2013 APPROACH TO THE BUDGET  For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan.  GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years.  India however remains front runner in economic growth in any cross-country comparison.  Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure.  Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays.  Indicators suggest that economy is turning around as core sectors and manufacturing show signs of recovery.  At this juncture, it is necessary to take hard decision to improve macroeconomic environment and strengthen domestic growth drivers.  Twelfth Five Year Plan to be launched with the aim of “fa...