PPFAS MF holds the first ever AGM for mutual fund unitholders at Chennai 8.11.14

In a first ever for the Mutual Fund industry, I was pleasantly surprised to receive an invitation from PPFAS Mutual Fund to attend an AGM for Unit holders and attended the first one at Chennai earlier today.

In a world where gathering of AUM is the norm with hardly anyone making themselves accountable to investors, it is refreshing to see  a Mutual Fund look upon investors as true owners of the fund and stating clearly that they look upon themselves as trustees. Rare to see an AMC offering themselves to scrutiny, taking questions from the “owner – unit holders” and frankly sharing their views and philosophy.

With a clearly stated goal to align the interest of the unit holders and managers and as trustees of unitholder money the PPFAS team  put themselves up for scrutiny here at Chennai.

Mr. Parag Parikh, the CEO and Director and Mr. Rajeev Thakkar, the Chief Investment Officer themselves were present. Will not write details of their presentations and you must attend if you have the opportunity. However, one point that struck me and is a value I hold very dear was mentioned by Mr. Parikh when he was outlining the philosophy of the AMC. He mentioned clearly that there were two sets of laws governing mankind - Universal Laws made by God and man-made laws and policies. The former is a constant and can't be changed and PPFAS Mutual Fund endeavors to be aligned to the Universal Law of Truth; this would mean that their thinking and actions are aligned to the interest of the investor completely without deviation. This value explains the frank open nature of the discussion which followed later.

Man-made laws, rules and policies can be manipulated and examples are -  devising fancy new types of series of schemes, declaring dividends to entice investors, all of which may look good, but actually harm investors' interest.

Mr. Thakkar gave a great presentation outlining the investment philosophy, and how they arrived at their investments. Was a great learning for all present.

The best (and longest) session was the Q and A session and the audience questioned the AMC on almost all of the scrips in the portfolio.  Mr. Thakkar answered in very great detail and the Q and A itself was a great learning. What really impressed was their openness and accountability to the true owners of their fund - the unit holders. 

Truly, I do not think many AMCs can have such a meet; for how can anyone answer detailed questions on 136 odd schemes??  Or can anyone explain truthfully  why there are multiple schemes investing in the same theme?? 

The Management of this AMC does evoke trust in unitholders.

Real Estate...becoming Unreal

Sharing some good links on the real estate scene from Firstbiz

In this post, Sunainaa Chadha says:

Sales across top six cities in India saw a quarter-on-quarter drop of 25% in the September quarter, the lowest sales since 2009 while unsold inventory rose to a high of 815,000 apartments as investors are slowly deserting the property market as prices have peaked.

This is the highest ever unsold stock  implying that the ready but vacant flats will take at least four years to sell, which means home prices have not only peaked in India's financial hub, Mumbai, but in other parts of the country too.  The report covered six cities—Mumbai Metropolitan Region (MMR), the National Capital Region (NCR), Bangalore, Hyderabad, Chennai and Pune, which contribute round 70% of the total apartments built in India.

While sales in the national capital region (NCR) have dipped 34 percent to 11.51 million sq feet quarter on quarter, sales in Mumbai were down 9% to 10.22 million sq ft from the last quarter. But get this: the productive markets of Bengaluru and Chennai have been hit the most, with sales dipping by 43% and 46%, respectively, from the previous quarter. The average price increase in the six centres was just 1%.

In Greater Mumbai for instance, weighted average cost of a house has soared to an all-time high of Rs 3 crore (from Rs 2.8 crore last year) even as the unsold inventory pile-up has shot up to 53,856 units. The number of apartments that came into the market this quarter (3,589) is also 53% more that the previous quarter but sales have dipped 6 percent in the same period. According to Pankaj Kapoor, MD at Laises Foras, it will take 65 months ( a little over 5 years) to sell these apartments!

From Firstbiz

Read the entire article here

Read these links:

What does easier FDI in real estate mean

Construction FDI - Speculators gain

A message from a woman...

This is a guest post by Shivani Desai, who is a trainer at the Money Mantra workshops

I wish to share with the gist of a message shared by a woman, a home-maker who attended one of our workshops.  She was asked to speak and share her thoughts and shared this wonderful message, worth recording here.

All my dear lady friends, no one will take care of you or for your money as much as you do.

Managing money has been seen to be clearly a man’s domain. We women conveniently pass the responsibility and the right to manage money to our husbands and shift our focus to managing day to day family affairs apart from the little job that we may have. We get lost in the rut of daily chores and are too tired to know, understand and to learn about matters beyond family budget.

An unexplained fear surfaces in us when we hear about anything untoward happening to our lady friends, or any acquaintance. We dread imagining ourselves in such a situation where we lose a loved one and shrug off the thought by reassuring ourselves of our strong belief in GOD. We think that by not thinking of such a situation, it will not happen.

BUT remember GOD helps them who help themselves.

So friends, please resolve to take few steps in this direction and even if you do not get involved in day to day decisions, make sure that you know

1. List of bank accounts both joint and individual.
2. List of properties in your name and your husband's name
3. Do you have life insurance policies and who are the beneficiaries.
4. List of investments made in your name your husband's and in the name of your children. This should include the investments made from your savings
5. Where are important financial papers such as insurance policies, property papers, bank statements, kept
6. How much exactly are we as a family  spending, saving each year?
7. How much debt do we have to be paid off?
8. Are we on track to meet our goal be it children’s education, marriage, retirement
9. Who can I go to for help if I need it  in case of an emergency?

Some of the ways women can become more confident is by first accessing their own bank accounts, paying their own credit card bills, instead of their husbands doing the same  for them.

Learning  and helping in few simple tasks that your husbands have to do regularly for eg. depositing cheques, keeping track of bill payment dates electricity,credit cards ,telephone will give you a lot of confidence.

As you gain more confidence, you can make a little effort in learning more about investments and handle the same yourself. It is no rocket science. Haven’t many surveys shown that women turn out to be better money managers :)

 

I thank the Money Mantras team for giving me this opportunity which has opened my eyes.

RBI advice to banks on prevention of cheque related frauds

RBI, has noted that many cheque related frauds could have been avoided had there been proper checks by banks at the time of handling and/or processing the cheques and monitoring newly opened accounts.

In a recent circular to banks the RBI has advised them to review and strengthen the controls in the cheque presenting/passing and account monitoring processes and to ensure that all procedural guidelines including preventive measures are followed meticulously by the dealing staff/officials. Given below are some of the preventive measures suggested by RBI.

• Ensuring the use of 100% CTS - 2010 compliant cheques. Under the CTS environment, electronic image of the cheque is transmitted to the drawee branch through the clearing house, along with relevant information such as data on the MICR (magnetic ink character recognition) band, date of presentation, and presenting bank. Cheque truncation obviates the need to move the physical instruments across branches
• Strengthening the infrastructure at the cheque handling Service Branches and bestowing special attention on the quality of equipment and personnel posted for CTS based clearing, so that it is not merely a mechanical process.
• Ensuring that the beneficiary is KYC compliant so that the bank has recourse to him/her as long as he/she remains a customer of the bank.
• Examination under UV lamp for all cheques beyond a threshold of say, Rs.2 lakh.
• Checking at multiple levels, of cheques above a threshold of say, Rs. 5 lakh.
• Close monitoring of credits and debits in newly opened transaction accounts based on risk categorization.
• Sending an SMS alert to payer/drawer when cheques are received in clearing.        

The threshold limits mentioned above can be reduced or increased at a later stage with the approval of the Board depending on the volume of cheques handled by the bank or it's risk appetite.

In addition to the above, banks have been asked consider the following preventive measures for dealing with suspicious or large value cheques (in relation to an account’s normal level of operations) :

a) Alerting the customer by a phone call and getting the confirmation from the payer/drawer.

b) Contacting base branch in case of non-home cheques.

The above may be resorted to selectively if not found feasible to be implemented systematically.

It has been reported that in some cases even though the original cheques were in the custody of the customer, cheques with the same series had been presented and encashed by fraudsters. In this connection, banks are advised to take appropriate precautionary measures to ensure that the confidential information viz., customer name / account number / signature, cheque serial numbers and other related information are neither compromised nor misused either from the bank or from the vendors’ (printers, couriers etc.) side. Due care and secure handling is also to be exercised in the movement of cheques from the time they are tendered over the counters or dropped in the collection boxes by customers.