Category: Personal Finance

Things to remember while insuring travel in Covid times

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International travel is opening up, but the widespread Covid pandemic has made travel insurance an absolute necessity for responsible travel today. Apart from the obvious health-related risks, the uncertainty also extends to travel disruptions caused by Covid restrictions in destinations and or in transit airports.

The basic travel insurance covers can be divided into medical and non-medical covers. The medical cover includes medical expenses on sickness or accident in destinations, accidental death, cash on hospitalisation, personal liability and even dental treatment, excluding pre-existing conditions. The non-medical covers typically covers baggage related delays or loss, lost passports, hotel/airline cancellations or delays and repatriation of mortal remains. Today, even as most of the existing covers, medical or non-medical, encapsulate risks arising from Covid-related conditions, most insurance policies have explicitly included Covid situations in their policy wordings in a bid to eliminate confusions to the retail buyer.

Covid-induced covers, add-ons

While travellers gear up to expect the unexpected in a post-Covid world, insurance companies too have warmed up to the new reality.

Beginning with an option to defer or cancel travel insurance without additional charge – announced in early April-2020 – insurance plans now comprehensively cover risks specific to Covid. Upon being diagnosed with Covid-19 during a trip, under accident and sickness clause, medical expenses would be covered up to the sum insured. But this can be claimed only under hospitalisation for most policies. Out-patient treatment coverage is offered only in select plans. Care Health Insurance, for instance, offers it. The other two Covid related risks arise from either trip cancellation or curtailment. Travel insurance policies with Covid cover reimburse ‘non-refundable unused service costs’, including hotel or airline bookings when trips are cancelled due to Covid. If the insured travel companion or immediate family member is diagnosed with Covid-19 prior to the trip, bookings done prior to being diagnosed with Covid are reimbursed upto a certain limit of the sum insured. On being diagnosed with the Covid infection during the trip, similar unutilized non-refundable services can be reimbursed.

Also, additional accommodation and travel expenses incurred due to trip interruption, subject to the sum insured limit are covered as mentioned by Tata AIG. HDFC Ergo travel insurance also provides for hotel accommodation to isolate or quarantine, if one is tested positive during travels. While most policies allow for automatic extension of policy period if a lockdown is imposed in destination regions, ICICI Lombard covers additional lodging and boarding expenses on account of a companion being hospitalized as well. Some plans allow for continued treatment even after policy expires. Tata AIG plans for instance, offers coverage to date of discharge or 60 days post expiry of the policy.

Costs

Pricing primarily depends on trip duration, frequency (multi trip or single trip) and age of the insured. For a 30- year old travelling to the USA for a single trip of 30 days today, the premiums range from ₹1,508 to ₹2,839 (sourced from Policybazaar.com) for a sum insured of US$ 100,000.

Individual needs have to be kept in mind in choosing the right travel policy. For instance, Tata AIG (Travel Guard Silver Plus) comes with a higher premium of ₹2,069 and does not provide hospital cash benefit but does provide US$750 for financial emergency assistance. Reliance General insurance (Reliance Silver) offers a ‘compassionate visit’ feature where a family member can come to the aid of the insured when he/she falls sick when travelling. For a 30 year old travelling to the US for 30 days, the premium comes to ₹1,688 here.

Points to note

The need for travel insurance today becomes more pressing when considering the individual travel restrictions imposed by many countries Travel to Dubai for instance will require two RT-PCR tests, one before travel and one after reaching the destination. The test must be conducted 48 hour before departure and self-isolation is mandated till the test report is out. Entry to most European countries on the other hand requires proof of negative test result from 72 hours before departure, proof of vaccination with EMA- approved vaccine (Covishield vaccine in Indian context) or proof of recovery from latest infection.

Travel insurance becomes vitally important to navigate such regulations – especially for the test to be conducted 72 hours before departure, as is seen with many country regulations. When the test turns out to be positive 2-3 days before travel, travel insurance cover with Covid protections will ensure minimizing travel related losses by helping reimburse airlines, hotels and other allied deposits that would have been incurred. Any positive test report after reaching destination can also be handled smoothly with travel insurance. With test positivity rate ranging from 5-10 per cent, the risk is not small enough to be ignored for essential travel.

This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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How you should choose from among the available AT1 bonds

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Ever since the default in AT1 (additional tier 1) perpetual bonds of Yes Bank, there has been lot of discussion on the risks of this instrument which was hitherto not understood or communicated. Here are some facts about AT1 bonds and how HNI investors can choose from among the available bonds for investment.

Risks

To recap, unlike in other bonds, there are two major risks in bank AT1 perpetual bonds. One, coupon discretion – the coupon or interest payable on these bonds can be serviced only if the bank is earning profits, or from certain permissible reserves.

That is, if a bank is loss-making or does not have adequate reserves, your coupon may not be paid. Two, loss absorption. The stark reality of this hit us in case of Yes Bank where the entire outstanding quantum of ₹8,415 crore was written off.

In this sense, bank AT1 perpetual bonds are similar to equity, that is if an issuer gets liquidated, the holders of the instrument have to participate in the loss. The additional learning in the case was that these instruments can be struck down even without touching the equity shareholders of the bank.

Apart from this, there is the issue of mis-selling too. In many cases, these instruments were sold as ‘similar to fixed deposits’ – buy into AT1 bonds of the same bank for higher returns. Returns are higher due to the risk factors and this needs to be understood.

Implicit safeguards

What then is the case for investment? Is it only the incremental return over the regular bonds issued by the same bank? No. There is also comfort from the fact that public sector banks have the implicit support of the Centre. This is not a stated guarantee like the ₹5 lakh insurance cover for bank deposits under Deposit Insurance Credit Guarantee Corporation (DICGC). However, this is a premise on which the bond market works which is not expected to be transgressed. There are instances of this implied support – when the AT1 bonds of certain loss making PSU banks were facing uncertainty, the regulator arranged premature call-back by all such banks. Apart from PSU banks, there are leading private sector banks too with sound fundamentals. Despite the write-down of AT1 bonds of one private sector bank, we cannot tar every bank with the same brush. While these bonds are perpetual, there is a call option at 5 years from issuance date and every anniversary thereof. Though it is only a call option and not a compulsion, bond market expects the call option will be exercised by the issuer and so far, call options have been honoured.

Suitability

On October 6, 2020, SEBI notified that for primary issuances of bank AT1 perpetual bonds after October 12, 2020, only Qualified Institutional Buyers are allowed and the allotment size and trading lot size shall be ₹1 crore. Individuals can purchase these AT1 bonds only from the secondary market but only in lot sizes of ₹1 crore.

However, for earlier AT1 bond issuances (prior to October 12, 2020), individuals can buy in lot sizes of less than ₹1 crore subject to the bond face value. For example, if the face value of one bond is ₹10 lakh, investment / trading can happen in multiples of ₹10 lakh. For buying AT1 bonds, investors have to approach wealth management firms and bond houses specializing in these bonds.

So, if you are an HNI investor, how do you choose from among the AT1 perpetual bonds available ? You can take the credit rating as one parameter to narrow down the choice. No bank has AAA rating for these instruments, due to the risks mentioned.

The highest credit rating assigned is AA+. In the public sector, AT1 bonds of State Bank of India and Bank of Baroda, and in the private sector, those of HDFC, ICICI and Axis have a AA+ rating. The returns can be another parameter.

Since there is no maturity, it is not yield-to-maturity (YTM) but the yield-to-call (YTC). Broadly, the YTC of AT1 perpetual bonds of these banks with a call option two to three years away, ranges from 6.25 per cent to 6.5 per cent and for those with five years to call, ranges from 7.35 per cent to 7.60 per cent in the secondary market.

The writer is a corporate trainer (debt markets) and author

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A refresher course on Corona Rakshak, Kavach policies

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Two colleagues find themselves discussing about the various insurance options that are available in the market to cover for Covid-19 specific risks.

Raj: Hey, I just read today that IRDAI is extending the availability of two Covid-specific policies, Corona Kavach and Corona Rakshak till March 31, 2022.

Rohit: Okay. I’m not sure about the details of the two policies but I remember that they were marketed quiet aggressively in our society last year.

Raj: Both are standard policies with very little difference in benefits across insurers. While Kavach is an indemnity policy that covers hospitalization charges upon admission for at least 24 hours, Rakshak is a benefit policy where the insured gets 100 per cent of the sum insured on diagnosis and the policy terminates thereafter.

Rohit: So, Corona Rakshak is like a one-time payment on diagnosis, while Kavach is like a regular health policy where you expenses are covered up to the limit of the sum insured. But what are the incremental advantages of Corona Kavach over a normal health policy which also covers hospitalisation ?

Raj: The basic premise when these policies were introduced last year was to provide an affordable and quick cover to people without sufficient health coverage in the midst of a raging pandemic. But if one has a comprehensive health insurance which covers out-patient, home care and other charges, Corona Kavach may not be needed. Corona Rakshak can be considered for additional cover or if out-patient charges are not covered in your existing health policy.

Rohit: Yes that is a marked advantage. My health policy requires hospitalisation to kick in.

Raj: Also, since the two are standardized products, one need not put extra effort in reading the fine print which is a must before buying insurance policies in general. With Corona Kavach, hospitalisation charges even include charges for most consumables like PPE kit and gloves in addition to room rent, ICU, medical practitioner fees, operation theatres and even ambulance service up to ₹2,000.

What’s more, even pre-hospitalisation medical charges up to 15 days and post-hospitalisation medical charges for 30 days are also covered. The claim amount will be determined by the sum insured. The minimum sum insured available under both the policies is ₹50,000. The maximum can go up to ₹5,00,000 for Corona Kavach and ₹2,50,000 for Corona Rakshak.

Rohit: They seem to be fairly comprehensive in their coverage.

Raj: Apart from covering incurred expenses, optional covers in Corona Kavach provide daily cash of 0.5 per cent of sum insured for a period of 15 days to cover for daily expenses.

Rohit: Is there any waiting period like with other health policies?

Raj: Yes there is a 15-day waiting period under both the policies. The policies can be availed for a period of 105 days (3.5 months), 195 days (6.5 months) and 285 days (9.5 months) and can be renewed to ensure the benefits continue. People between the ages of 18 to 66 can buy these two products.

Rohit: Well, even with an increasing rate of vaccination any cover for Covid does offer peace of mind against any residual risk of infection.

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Indian Gold Rates Today Quoted At Rs. 45,390, Showing Downward Trend, Should You Buy?

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Personal Finance

oi-Kuntala Sarkar

|

Today, on September 18, in India 22 carat gold price is quoted at Rs. 45,390 and 24 carat gold is quoted at Rs. 46,390 per 10 grams. Today on Saturday, the prices remained the same as yesterday’s prices. But on the next trading day, the prices are again expected to fall, if the previous week’s trend is followed. In the international spot market gold prices hiked by a minor 0.01% today, at $1755.8/oz, whilst the US dollar index remained the same. But yesterday the US dollar index gained in the market. However, Comex gold rates fell by a 0.30% at $1751, and the MCX gold in October future fell by 0.16% as today. Overall gold business in the international markets is not showing an upward trend for the last few weeks that is concerning bullion investors, making it a good time for buyers.

Indian Gold Rates Today Quoted At Rs. 45,390, Showing Downward Trend, Should You

An increasing US dollar index and was dragging down the gold rates in India. On the other hand, as the economy has started to recover, gold started to lose its weight. As an asset class, gold will always perform outstandingly in a time of recession or deflation and will perform only tepid in a normal economic situation. Now the global economic growth is pulling down gold prices. As India is dependent on gold import to meet domestic demands, the prices of gold in the country is again losing pace, making it a good time for buyers to invest in the yellow metal before the upcoming festive season.

In the upcoming week, on Tuesday, the US Fed will start their September meet, which will indicate the analyzing pathway about the US employment and retail inflation data. However, in the international markets, gold is not going to gain higher very soon, as the global situation is not very comfortable for the bullion market. Fed’s decision about tapering will decide international gold rates, which will eventually impact Indian gold rates.

Gold rates in different Indian cities are quoted differently, daily. Today’s gold rates in major Indian cities follow:

City 22 carat (INR/10 Grams) 24 carat (INR/10 Grams)
Mumbai 45,390/- 46,390/-
Delhi 45,550/- 49,690/-
Bangalore 43,400/- 47,350/-
Hyderabad 43,400/- 47,350/-
Chennai 43,710/- 47,690/-
Kerala 43,400/- 47,350/-
Kolkata 45,650/- 48,350/-

“Bears have control now. We had a complete flip in retail sales. This reinforces the idea that the Fed’s hand is being forced to taper. Right now, gold is in a new trading range. The short-term trend is down”, RJO Futures senior market strategist Frank Cholly commented Kitco. In addition to that, Gainesville Coins precious metals expert Everett Millman added, “Gold is comfortable between $1,700-$1,800 an ounce range. Unless we get surprising data, I don’t expect the precious metal to have an outrageous swing one way or the other. The $1,740 level is supported, and resistance is at $1,770-$1,800.”

Story first published: Saturday, September 18, 2021, 18:43 [IST]



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Top 4 Private Sector Banks Promising Interest Up To 7% On 5 Year Fixed Deposits

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Yes Bank

Yes Bank has adjusted its interest rates on fixed deposits of less than Rs 2 crore, effective August 5, 2021. Following the most recent modification, Yes Bank now provides an interest rate of 3.25 percent on resident fixed deposits maturing in 7 to 14 days, 3.5 percent on deposits maturing in 15 to 45 days, and 4 percent on FDs maturing in 46 to 90 days respectively. Yes Bank offers 4.5 percent and 5% on term deposits maturing in 3 to less than 6 months and 6 to less than 9 months.

Yes Bank offers a 5.25 percent interest rate on FDs with a maturity period ranging from 9 months to less than one year. Resident term deposits maturing in one year to less than two years will earn a 6% interest rate in 2 to 3 years will return 6.25 percent, whereas deposits maturing in 3 to 10 years would return 6.50 percent to the general public. Below are the latest interest rates on fixed deposits of Yes Bank for both regular and senior citizens.

Period Regular Interest Rates Annualised Yield Senior Citizen Interest Rates Annualised Yield
7 to 14 days 3.25% 3.25% 3.75% 3.75%
15 to 45 days 3.50% 3.50% 4.00% 4.00%
46 to 90 days 4.00% 4.00% 4.50% 4.50%
3 months to 4.50% 4.50% 5.00% 5.00%
6 months to 5.00% 5.03% 5.50% 5.54%
9 months to 5.25% 5.32% 5.75% 5.83%
1 year 5.75% 5.88% 6.25% 6.40%
18 Months to 6.00% 6.14% 6.50% 6.66%
3 Years to 6.25% 6.40% 7.00% 7.19%
5 Years to 6.50% 6.66% 7.25% 7.45%
Source: Bank Website, Rates for

RBL Bank

RBL Bank

RBL Bank has revised interest rates on Domestic, NRO, NRE, and Flexi Fixed Deposits of less than Rs 3 Cr, effective September 1, 2021. RBL Bank provides 3.25 percent on deposits maturing in seven to fourteen days, 3.75 percent on deposits maturing in fifteen to forty-five days, and 4.00 percent on domestic resident deposits maturing in forty-six to ninety days. Fixed deposits maturing in 91 to 180 days will offer 4.50 percent interest, while those maturing in 181 to 240 days would provide you 5.00 percent interest. FDs maturing in 241 and 364 days, the private sector bank will now provide a 5.25 percent interest rate. RBL bank provides a 6.00 percent interest rate on FDs maturing in 12 months to less than 36 months and a 6.30 percent interest rate on deposits maturing in 36 months to less than 60 months 1 day.

FDs maturing in 60 months 2 days to less than 240 months will offer you an interest rate of 5.75 percent. Following the bank’s most recent interest rate modification, the general public will now get an interest rate of 6.30 percent on tax-saving fixed deposits of 60 months (lock-in period) on deposits up to Rs 3 Cr. Check out the latest rates on fixed deposits of RBL Bank below.

Period of Deposit Regular Interest Rates Senior Citizen Interest Rates
7 days to 14 days 3.25% 3.75%
15 days to 45 days 3.75% 4.25%
46 days to 90 days 4.00% 4.50%
91 days to 180 days 4.50% 5.00%
181 days to 240 days 5.00% 5.50%
241 days to 364 days 5.25% 5.75%
12 months to less than 24 months 6.00% 6.50%
24 months to less than 36 months 6.00% 6.50%
36 months to less than 60 months 6.30% 6.80%
60 months to 60 months 1 day 6.30% 6.80%
60 months 2 days to less than 120 months 5.75% 6.25%
120 months to 240 months 5.75% 6.25%
Tax Savings Fixed Deposit (60 months) 6.30% 6.80%
Source: Bank Website: w.e.f. September 01, 2021

IndusInd Bank

IndusInd Bank

IndusInd Bank had adjusted interest rates on domestic/NRO/NRE deposits of less than Rs 2 Cr, commencing from July 23rd, 2021. After the latest revision, the bank is now promising an interest rate of 2.50% to 6.00% to the general public and 3.00% – 6.50% to senior citizens on deposits tenure ranging from 7 days to 61 months and above.

On tax-saving fixed deposits, the bank is now among the top 3 private sector banks of India promising the highest interest rates. On Indus Tax Saver Scheme (5 years), the bank is offering an interest rate of 6.00% to the general public and 6.50% to senior citizens. IndusInd Bank’s latest interest rates on fixed deposits for both regular and senior citizens are framed below.

Tenure Regular Interest Rates (in % p.a.) Annualised Yield Senior Citizen Interest Rates (in % p.a.) Annualised Yield
7 days to 14 days 2.5 2.5 3 3
15 days to 30 days 2.75 2.75 3.25 3.25
31 days to 45 days 3 3 3.5 3.5
46 days to 60 days 3.25 3.25 3.75 3.75
61 days to 90 days 3.4 3.4 3.9 3.9
91 days to 120 days 3.75 3.75 4.25 4.25
121 days to 180 days 4.25 4.25 4.75 4.75
181 days to 210 days 4.6 4.63 5.1 5.13
211 days to 269 days 4.75 4.81 5.25 5.32
270 days to 354 days 5.5 5.58 6 6.09
355 days to 364 days 5.5 5.58 6 6.09
1 Year to below 1 Year 6 Months 6 6.18 6.5 6.71
1 Year 6 Months to below 1 Year 7 Months 6 6.23 6.5 6.77
1 Year 7 Months to below 2 Years 6 6.23 6.5 6.77
2 years to below 2 years 6 Months 6 6.32 6.5 6.88
2 years 6 Months to below 2 years 9 Months 6 6.47 6.5 7.05
2 years 9 months upto 3 years 6 6.52 6.5 7.11
Above 3 years upto 61 months 6 6.72 6.5 7.36
61 months and above 5.5 6.28 6 6.94
Indus Tax Saver Scheme (5 years) 6 6.94 6.5 7.61
Source: Bank Website, w.e.f. July 23rd, 2021

DCB Bank

DCB Bank

DCB Bank has updated the interest rates on its fixed deposit scheme, which will enter into force on August 17, 2021. Following the latest FD interest rate modification, the bank now provides a 4.35 percent interest rate on resident Indian fixed deposits maturing in 7 to 90 days.

The bank provides 5.05 percent and 5.45 percent interest rates on deposits maturing in 91 days to less than 6 months and 6 months to less than 12 months. The bank is currently providing an interest rate of 5.55 percent on deposits maturing in one year. On FDs with a maturity period of more than 12 months to less than 15 months, the bank offers a 5.30 percent interest rate. DCB Bank is giving a 5.50 percent interest rate on fixed deposits maturing in 15 to 18 18 months and 18 months to 700 days.

The bank is currently offering a 5.95 percent interest rate on fixed deposits maturing in 700 days. The private sector bank is offering a 5.50 percent interest rate on term deposits maturing in more than 700 days to less than 36 months and a 5.95 percent interest rate on resident term deposits maturing in 36 to 120 months to the general public. The bank offers the following interest rates to both regular and senior citizens for single deposits of less than Rs.2 Cr.

Tenure Deposit Interest Rate (in % p.a.) Annualised Yield (in % p.a.) Rate for Senior Citizens (in % p.a.) Annualised Yield (in % p.a.)
7 days to 14 days 4.35% 4.35% 4.85% 4.85%
15 days to 45 days 4.35% 4.35% 4.85% 4.85%
46 days to 90 days 4.35% 4.35% 4.85% 4.85%
91 days to less than 6 months 5.05% 5.05% 5.55% 5.55%
6 months to less than 12 months 5.45% 5.56% 5.95% 6.08%
12 months 5.55% 5.67% 6.05% 6.19%
More than 12 months to less than 15 months 5.30% 5.41% 5.80% 5.93%
15 months to less than 18 months 5.50% 5.65% 6.00% 6.18%
18 months to less than 700 days 5.50% 5.73% 6.00% 6.28%
700 days 5.95% 6.22% 6.45% 6.77%
More than 700 days to less than 36 months 5.50% 5.89% 6.00% 6.47%
36 months 5.95% 6.46% 6.45% 7.05%
More than 36 months to 60 months 5.95% 6.87% 6.45% 7.54%
More than 60 months to 120 months 5.95% 8.05% 6.45% 8.96%
Source: Bank Website, (with effect from 17th August, 2021)



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Gold Rates Are Falling, Is It The Right Time To Buy After The Fall?

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How Gold rates for 22 karats in select Indian cities have fallen?

City Sept 11 Sept 18
Mumbai 46120 45390
Delhi 46150 45550
Chennai 44400 43710
Bangalore 44400 43710
Kolkata 46450 45650
Hyderabad 44400 43710
Kerala 44000 43400

So what led to the decline?

So what led to the decline?

Let’s begin to understand that Indian prices are linked to international prices and in the international markets if they fall, they move lower in India too. Stronger than expected retail sales in the US, led to a spike in treasury yields and a near 3% drop in international gold prices. The belief is that if data continues to be strong, the US Fed would start tapering its bond purchase programme faster than anticipated. This means that liquidity would start flowing out of the system and this had its impact on gold prices.

Also, the belief is that if the data continues to be strong, we might see interest rates rise sooner than expected, which is not good news for gold. When interest rates rise, gold prices tend to fall and vice versa.

The key to immediate short term movement of gold in the global markets would be the US Fed meeting slated for early next week. Should the US Fed indicate a timeline for tapering, we would see gold prices fall a bit more. In short, gold is likely to see volatility in the next week. It’s always hard to predict price movement in either direction for gold. It all depends on a host of factors including news that is emanating in the short to medium term.

How Gold ETFs In India have performed? Should You Buy Gold Now?

How Gold ETFs In India have performed? Should You Buy Gold Now?

1-year returns
ICICI Prudential Gold ETF -10.32%
SBI Gold ETF -10.30%
Invesco Gold ETF -10.75%
Nippon ETF Gold -10.63%
Birla Gold ETF -10.40%

The returns from gold ETFs over the last 1-year has been -10%. What this means is that it offers an investor the opportunity to invest in gold at a price that is 10% lower than last year. Now, if global economic momentum gathers steam, it’s unlikely that gold would generate good returns. Gold gives returns when things take a turn for the worse, be it economic chaos or covid.

It is a safe haven asset, so for gold to really give returns, a few things must go wrong, which is possible in times like these. What we almost always advocate and tell readers to keep at least some money invested in gold, particularly gold ETFs. It is very unwise to buy gold in physical form, because of margins, theft related issues and storage charges. Gold ETFs track gold prices and are the best and safest way to invest. You can buy gold ETFs if you have a demat account and the above mentioned gold ETFs are suitable for investment. Having said that ideally one should have a diversified portfolio and gold should at least form 10% of that investment to hedge risks.



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It’s advantage dollar, as currencies swing to the tune of central bank policies, BFSI News, ET BFSI

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Currency swings, notably in the second half of 2021, are being driven by various stances of global central banks. A soft August non-farm payroll report and a dovish speech from Fed Chair Jerome Powell at the Jackson Hole have taken some of the sting out of the dollar on the upside. Accordingly, the rupee outperformed most in Asian emerging market basket in August.

However, the Indian currency then started retreating amid the ongoing spillover volatility due to the uncertainty over monetary normalisation by RBI. The latest move by the Indian rate-setter to absorb liquidity through the VRRR auction worth Rs 50,000 crore hinted at the first stage of monetary tightening.

Meanwhile, the dollar got some modest support against the rupee in the wake of strong buying by importers. However, the dollar flow momentum is not yet over. The rupee still remains the favourite carry trade counter in the EM basket, despite any possible outflows that can arise due to the concerns over the Delta variant.

As far as monetary tightening is concerned, it will be done gradually by the central banks, avoiding any major volatility due to policy divergence among themselves.

On the technical side, the rupee has a strong ceiling against the dollar around 72.80 while the floor can be around 74.40 followed by 74.80 in the coming months. We will remain negative on the rupee in the medium term based on the stronger dollar trend, which is likely to stay for the rest of the year.

The EUR-USD as well as EUR-INR pairs have come under pressure after the ECB shifted to a symmetrical 2.0% inflation target in late July. While it was not quite as aggressive as the Fed’s average inflation targeting, ECB’s new policy has still managed to drive real EUR interest rates down to new low and hit the trade-weighted euro.

As for the rupee, an appreciation in the Indian currency since late April this year has kept the euro-rupee pair lower. This comes at a time when the US Fed is preparing to normalise policy. With US jobs numbers likely to improve into October, the dollar can stay stronger versus euro in the coming weeks. We think the EUR-USD pair can stay in the 1.16-1.20 range going into the yearend, but risks are clearly skewed lower. The UK pound continues to follow a narrow range of 1.37-1.39 vs dollar since the last two months.

The sterling remains choppy within a range despite better-than-expected Nationwide House Price Index and Manufacturing PMI for August. Surprisingly, the pound lost its strength after the UK PM announced a tax hike to fund the budget deficit, which weighed on the currency amid fears that a recovery in the British economy may take longer than expected.

Additionally, markets are starting to take into account Brexit-related political risks associated with the end of the grace period at month-end September for the Northern Ireland-UK trade check issue. Technically, both euro and pound should fall in the coming months, which can lift the dollar index to around 94.80 by year end.

(DK Aggarwal is the CMD of SMC Investment and Advisors)



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4 Best Performing Capital Goods Stocks (M-Cap > Rs. 50K Cr) With Returns Up To 116% In The Last 1-Year

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1. Bharat Electronics:

Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry of Defence, Government of India. It manufactures advanced electronic products and systems for the Army, Navy and the Air Force. BEL has also diversified into various areas like homeland security solutions, smart cities, e-governance solutions, space electronics including satellite integration, energy storage products including e-vehicle charging stations, solar, network & cyber security, railways & metro solutions, airport solutions, Electronic Voting Machines, telecom products, passive night vision devices, medical electronics, composites and software solutions.

Coming to its scrip, the scrip in a year’s time have gained 98% close to bagging multibagger returns.

M-Cap of the firm- Rs.50,023 crore

P/E TTM-24.18

Sector P/E- 24.79

2. Havells India:

2. Havells India:

The company is a Fast Moving Electrical Goods (FMEG) Company with an extremely strong global presence. The company enjoys dominance is in products including Industrial & Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, Modular Switches, Home Appliances, Air Conditioners, Electric Water Heaters, Power Capacitors, Luminaires for Domestic, Commercial and Industrial Applications.

The company in over a year despite the pandemic led disruption and market sentiment turning haywire amid financial crisis saw good returns for its investors, almost doubling investors’ wealth.

TTM P/E-75.79

Sector P/E- 77.70

3. Larsen and Toubro:

3. Larsen and Toubro:

With 8 decades of existence, the company is globally the largest companies in India’s private sector. The company’s capabilities range across Technology, Engineering, Construction, and Manufacturing, and maintains a leadership in all its major lines of business.

P/E TTM- 19.36

Sector P/E- 21.32

4. Siemens

4. Siemens

With a focus on electrification, automation and digitalization, Siemens India stands for engineering excellence, innovation, and reliability. As one of the world’s biggest producers of energy-efficient, resource-saving technologies, Siemens is a pioneer in infrastructure and energy solutions, automation and software for industry and is a leader in medical diagnosis. Siemens also provides business-to-business financial solutions, rail automation and wind power solutions.

The company’s scrip in a 1-year time has gained by 73%.P/e TTM- 70.66

Sector P/E- 95.54

Disclaimer:

Disclaimer:

With the infra boom and investment planned to take Indian economy to new heights and be more user friendly, these stocks will contribute more to the economy and will continue to also record gains. Nevertheless the information is collated just for informational use.

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LIC Jeevan Umang Plan Most Popular For Its Survival Benefits: Know How

Personal Finance

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oi-Kuntala Sarkar

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Life Insurance Corporation (LIC) is a public sector insurer that provides term policies, money back plans along with multiple lucrative endowment policies. But Jeevan Umang is one of a kind plan among all of them as it is the only whole life, non-linked, participating plan of LIC. LIC generally provides death benefits and maturity benefits, but the Jeevan Umang plan will provide the subscriber a survival benefit, along with the endowment benefits. LIC will give you a regular payout in the form of premium, after the policy payment term, until the policy holder’s death. Anybody can apply for this plan, the minimum entry age is 90 days, which means a parent can take this plan for a newborn baby, while the maximum age will vary between 40-55 depending on the policy term. The policy term can be for 15, 20, 25, 30 years. The maximum age however should be 70 years at the end of the policy. That means if a person is aged 55 years, he/can apply for this plan for 15 years policy term.

LIC Jeevan Umang Plan Most Popular For Its Survival Benefits: Know How

Benefits of the plan

Jeevan Umang is a whole life risk coverage plan, that will offer annualized 8% of Sum Assured after the premium payment term – till the survival which is counted by LIC till the age of 100, along with tax benefits on premiums, death benefit, and maturity benefits. The maturity benefit will be a total of sum assured, simple revisionary bonus, and final additional bonus. In case of death before 100 years, the death benefits will be given to the nominee, the amount will again be a total of sum assured, simple revisionary bonus, and final additional bonus. Hence, the death benefit will be more than 105% of all premiums paid. The death benefits can be received in a lump sum or the regular payout. In the latter case, in 5, 10, 10, and 15 years terms, the benefit can be obtained in the monthly, quarter, half-yearly, and yearly frequencies.

As it is a non-linked plan, your money will not be traded in the equity market to keep the money secured, and would not affect the returns. Another benefit of this participating plan in LIC will share a part of the company’s yearly profit with the subscriber, which is called Simple Reversionary Bonus and Final Addition Bonus. The minimum sum assured of this policy is Rs. 2,00,000.

A loan facility is also available in Jeevan Umang, after 2 years of premium payment, the policyholder can take a loan again the plan. Tax deduction benefits will come under section 80(c), and maturity and the tax benefit will be exempted under section 10(D).

Premium option of Jeevan Umang

Sum Assured (INR) Age Term 1st yearly premium (tax 4.5%) Premium from 2 year (tax 2.25%) Approximate return yearly from age of 60-100 or till life assured survives Total approximate return at age of 100 on survival
200000 40 59 11486 11238 16000 1781000
500000 40 59 28060 27456 40000 4452500
1000000 40 59 55598 54401 80000 8905000
2000000 40 59 111196 108802 160000 17810000

Additional rider options

There are 5 additional rider options available in the plan with additional premium, namely – accidental death and disability benefit rider, accidental benefit rider, new term assurance rider, new critical illness benefit rider, and premium waiver benefit rider.

The subscriber can any time surrender the policy, provided premiums have been paid for at least 3 consecutive years, and LIC in that case will pay the Surrender Value equal to higher than the Guaranteed Surrender Value and Special Surrender Value. However, this policy is popular because of its unique quality of whole life benefits. Even after the death of the policyholder, the nominee will get the assured values. Many parents take this plan their children as it will assure them a good amount of money with affordable premium benefits for whole life.



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