Reality Talk

As I took a quick evening walk around DLF phase V this evening, I could see a lot of flats under construction. I also saw a lot of new flats that are ready to get occupied but still vacant and quite a few unoccupied shopping complexes. I had started noticing such huge construction activities which I felt was definitely an oversupply ( @ the prices quoted) a couple of months ago in many parts of Bangalore too. Almost everything around the world including commodity prices, stock markets, real estate have fallen sharply. But still I feel the Real estate sector in India is still being kept afloat. The no: of transactions of buying/ selling has come down in reality sector but the reduction in prices is not very visible yet. ( Although some 20% correction is seen / reported in some places)

I am not sure about the reasons as to how the prices have'nt fallen sharply. Is that because of Indians sentiment towards owning a home? or because of the political and black money nexus with real estate or because of a lack of transparent pricing visible to the public.

Even in premium areas the return from house in terms of rentals is just 4%. I am not sure who likes to own all these houses. These things still remain a mystery for me.

The stock prices of most of the real estate companies have corrected by almost 90%, but an equivalent correction has not happened in the real prices. The real estate companies may manage to survive by the killing profits that they have made over the last 3-4 years , but how long can they continue to hold these prices is the question.

But one thing is for sure, that the prices may remain flat for 4-5 years from now unless a dramatic boom revives the Indian economy. But till the time we have the salaried class who are ready to shell out 50% or more of their salary as EMI for 15-20 years, the developers would try to take an advantage.

I think the match between developers and buyers is in a tie breaker situation now. (My thought that prices would fall in India like a pack of cards hasn't come true yet.) I am keen to see who wins the match from hereon!!

Should we invest in TATA capital non-convertible secured debentures

News:-

"Tata Capital, a wholly owned subsidiary of Tata Sons has floated its public issue of Non Convertible Debentures (NCD). The size of the issue, alongwith oversubscription, is 1500 crores and has a tenor of 5 years. Allotment would be made on a first-come-first-served basis.
Tata Capital is a Non-Deposit taking Non Banking Financial Company (NBFC). It encompasses several areas of operations like Personal/Auto Loans, SME/Infrastructure Finance, Wealth Management, Investment Banking, Private Equity and Treasury Advisory. This enables it to get fund and fee based income.
Attractive Interest Rates : 11% for the monthly option, 11.25% for the quarterly option and 12% for the annual or cumulative option.

Views-

The interest rate looks attractive compared to Bank FDs. When interest rates are decreasing, investors looking for a relatively secure return of 12% p.a. can look at this option. Issue closes on 24 Feb 2009.

Online subscription option available in ICICIdirect.India infoline to come up with an online application facility shortly.

At these turbulent times…..Focus on Cost *

* Kadirvan T - (Guest Author)

With the current economic scenario where layoffs are the front page news everyday, we should focus on cutting costs and ensuring we have sufficient cash backup for meeting contingencies.

Well, How do we do it?
There are many ways to do it. One good way is through Microsoft Money Plus (Deluxe). MS Money is an excellent software to manage your personal finances. One amazing feature it provides is the cash flow forecast for your bank account. The forecast would be based on your recurring deposits (for a salaried person, it would most probably be only the monthly salary) and all the recurring expenses.

Fig: A sample Cash flow Forecast

How it helps?
Once you start tracking your day-to-day financial transactions in MS Money and also setup your Recurring Deposits and Expenses, you will be easily able to answer ALL the below questions through the Cash flow Forecast feature.

1) Will I have sufficient Money for my sister’s Marriage in January, 2010?
2) What if I get a salary decrease of 10%, would I still be able to sustain my increasing house rent?
3) How much money would I have saved in June 2010 considering I pay Rs.1000 less on my home loan EMI starting this month?
4) How much of monthly expense should I reduce to afford an additional Car EMI?

and lot more…

Well, Isn’t that a lot of time and effort tracking? Is it all really worthwhile???
All its takes is just10 mins everyday to track your expenses. What you get? You get to understand your finances and have it under YOUR control.

Is that all that MS Money has to offer? No!

MS Money also allows you to
1) Understand how much money you have in all your accounts inclusive.
2) Understand where all your hard-earned money is going through user-friendly reports like Expenses by Category/Payee etc…

Fig: A Sample Spending by Category (Pie-Chart)

3) You can easily understand why you have spent Rs.12,500 on Dining Out this month. Just double-click on the category and get the break-up. If you need to change it, change it there itself.



4) Budget your expenses and get alerted whenever your expenses go over-budget.

Fig: A Sample Budget chart

5) Get alerted of the pending Bill Payments.

Fig: A Sample Bills and Deposits Chart (Also get reminders when you start your PC)

6) Get your monthly Income and Expense Statements and also a month-wise Comparative analysis. You can also calculate your Net Worth just through a button click

Other than these, there are loads of other easy to use features. Just go ahead, explore and have fun!!!

Download the 60 day trial version from the below link:

http://www.microsoft.com/money/ProductDetails.aspx?pid=003