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A

PROJECT REPORT

ON

INVESTMENT OPTIONS OFFERED BY ICICI BANK AND HDFC BANK

SUBMITTED BY

AVANEET WASON

In partial fulfillment of the requirements for the degree of

Post Graduate Diploma in Management (PGDM)

(2008-2010)

UNDER THE GUIDANCE OF

Prof. RAJAN UMAP

SUBMITTED TO

JAYAWANY INSTITUTE OF BUSINESS STUDIES

TATHAWADE, PUNE -411033


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ACKNOWLEDGEMENT

I am very thankful to Prof. RAJAN UMAP who is my faculty guide, for giving his

valuable suggestions and guiding me throughout the course of this project right from the stage of

dissertation proposal. He has been very patient in discussing the various aspects of the project

and has provided valuable guidance at different stages and discussed the modalities for the

survey, Data Analysis and the recommendations. His guidance during the analysis of the

different issues was also very helpful.

It gives me immense pleasure to thank all those who had helped me directly or indirectly

to complete this Dissertation Report.

AVANEET WASON

Enrollment No: JIBS/PGDM/2008-10/042


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DECLARATION BY THE STUDENT

I do hereby declare that the project report titled COMPARATIVE STUDY ON

INVESTMENT OPTIONS OF ICICI BANK AND HDFC BANK has been prepared by me

under the guidance of Prof. (Mr.) Rajan Umap as part of my study in partial fulfillment of Post

Graduate Diploma in Management (PGDM) of JSPMs Jayawant Institute of Business Studies

Tathawade, Pune-33.

I further declare that this project report is the result of my own effort which is original

one and has not been submitted earlier either to this Institute or to any other

University/Institution for the fulfillment of the requirement of a course of study.

AVANEET WASON

EnrollmentNo JIBS/PGDM/200810/044


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CERTIFICATE FROM INTERNAL GUIDE

It is certified that the project entitled A COMPARATIVE STUDY ON INVESTMENT

OPTIONS OF ICICI BANK & HDFC BANK is submitted in partial fulfillment of the

requirements for the award of degree of Post graduate diploma in management by Jayawant

Institute of Business Studies, Pune. This work has been done by AVANEET WASON, under my

supervision and is genuine.

Signature of Faculty


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CHAPTERS

CHAPTER-1

y INTRODUCTION

y OBJECTIVES OF THE STUDY

CHAPTER-2

y ORGANIZATION PROFILE

CHAPTER-3

y LITERATURE REVIEW

CHATPER-4

y RESEARCH METHODOLOGY

y LIMITATIONS OF THE STUDY

CHAPTER-5

y DATA ANALYSIS AND INTERPRETATION

CHAPTER-6

y FINDINGS &SUGESTIONS

y CONCLUSIONS

y SUGGESTION


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EXECUTIVE SUMMARY

The project ,comparative study of investment options of ICICI BANK and hdfc bank was

conducted for the period of one month december 2009 to 20 th jan 2010.. This particular project

was a very good learning experience for me.

Banks lend money either for productive purposes to individuals, firms, corporate etc. or for

buying house property, cars and other consumer durable and for investment purposes to

individuals and others. However, banks do not finance and speculative activity. Lending is risk

taking. Having prudent norms for lending should cover the risk. The depositors of banks are also

assured of safety of their money by deploying some percentage of deposits in statutory reserves

like SLR and CRR.

With stiff competition and advancement of technology, the services provided by banks have

become more easy and convenient. The past days are witness to an hour wait before withdrawing

cash from accounts or a cheque from north of the country being cleared in one month in the

south.

Investment comes with the risk of the loss of the principal sum. The investment that has not been

thoroughly analyzed can be highly risky with respect to the investment owner because the

possibility of losing money is not within the owner's control. The difference between speculation

and investment can be subtle. It depends on the investment owner's mind whether the purpose is

for lending the resource to someone else for economic purpose or not.

In the case of investment, rather than store the good produced or its money equivalent, the

investor chooses to use that good either to create a durable consumer or producer good, or to lend

the original saved good to another in exchange for either interest or a share of the profits. In thefirst case, the individual creates durable consumer goods, hoping the services from the good will

make his life better. In the second, the individual becomes an entrepreneur using the resource to

produce goods and services for others in the hope of a profitable sale. The third case describes a

lender, and the fourth describes an investor in a share of the business. In each case, the consumer


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obtains a durable asset or investment, and accounts for that asset by recording an equivalent

liability. As time passes, and both prices and interest rates change, the value of the

asset and liability also change.

With fixed investment policy and no contracting costs or taxes, the value ofthe firm is

independent of the structure of its liabilities [Modigliani and Miller (1958)]. This capital

structure irrelevance hypothesis implies that the function relating leverage and the value of the

firm is a horizontal line. Alternatively, if taxes or contracting costs are important, or if

investment policy and capital structure are interdependent, then the market value of the firm

depends on the structure of its liabilities. In the case of the capital structure relevance hypothesis,the function relating firm value and leverage is concave. But neither hypothesis by itself

provides a satisfactory explanation of the estimates in table 1. Maximizing behavior by firm

implies that in voluntary transactions such as security sales, the firm should structure the

transaction to yield the highest possible value of the firm. Thus, if a transaction moves a

company along a given leverage-value function, the irrelevance hypothesis implies there

should be no abnormal returns associated with announcements of security sales, while the capita

structure relevance hypothesis implies the abnormal returns should be non-negative. Therefore,

the negative returns in table 1 are inconsistent with both predictions.

Reductions in firm value associated with apparently voluntary security sales present a puzzle. It

is possible that security sales are optimal responses to an adverse change in the firms prospects

and the negative price reaction is due to the revelation of the adverse change. Even if a security

sale might itself increase the value of the firm, it could lead potential security holders to believe

the firm has received bad news. Without a theory capable of differentiating between movement

along a given leverage value function and a shift in the function, it is difficult to test hypotheses

about optimal capital structure by looking at the stock price reactions to announcements

of security sales. Therefore, at the current stage of development, studies of financing decisions

provide relatively weak tests of optimal capital structure theories.


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CHAPTER-1


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Introduction Of The Topic

The topic of COMPARISION BETWEEN INVESTMENT OPTIONS OF ICICI AND

HDFC BANK: Banking is the backbone of a modern economy. Health of banking industry is one

of the most important pre-conditions for sustained economic progress of any country. The world

of banking has assumed a new dimension at the dawn of the 21st century with the advent of tech

banking, thereby lending the industry a stamp of universality. In general, banking may b

classified as retail and corporate banking. Retail banking, which is designed to meet the

requirements of individual customers and encourage their savings, includes payment of utility

bills, consumer loans, credit cards, checking account balances, ATMs, transferring fund

between accounts and the like. Corporate banking, on the other hand, caters to the needs o

corporate customers like bills discounting, opening letters of credit and managing cash.

The Indian banking scene has changed drastically with the private sector making inroads in an

area hitherto dominated by large public sector banks. Growing disinvestment is likely to impact

the banking industry as well. There is every possibility of privatization of public sector banks,

leading to greater operational autonomy.

The development of the Indian banking sector has been accompanied by the introduction of new

norms such as Income Recognition and Capital Adequacy, by the government. The latter implies

that banks can lend on the basis of their respective capital base. These norms have caused banks

to construct equity on their own, before going in for debt. Disintermediation is a real threat for

banks. Of late, banks are adopting the EVA (Economic Value Added) concept wherein revenues

are viewed in the context of the risk associated with them. The Indian banking market is growing

at an astonishing rate, with Assets expected to reach US$1 trillion by 2010. An expanding

economy, middle class, and technological innovations are all contributing to this growth.The countrys middle class accounts for over 320 million people. In correlation with the

growth of the economy, rising income levels, increased standard of living, and affordability of

banking products are promising factors for continued expansion.


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Investment is the investing of money or capital in order to gain profitable returns, as interest,

income, or appreciation in value. It is related to saving or deferring consumption .Investment is

involved in many areas of the economy, such as business management and finance no matter for

households, firms, or governments. An investment involves the choice by an individual or an

organization such as a pension fund, after some analysis or thought, to place or lend money in a

vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g

futures or options), or the foreign asset denominated in foreign currency, that has certain level of

risk and provides the possibility of generating returns over a period of time.

Investment comes with the risk of the loss of the principal sum. The investment that has not been

thoroughly analyzed can be highly risky with respect to the investment owner because the

possibility of losing money is not within the owner's control. The difference between speculationand investment can be subtle. It depends on the investment owner's mind whether the purpose is

for lending the resource to someone else for economic purpose or not.

In the case of investment, rather than store the good produced or its money equivalent, the

investor chooses to use that good either to create a durable consumer or producer good, or to lend

the original saved good to another in exchange for either interest or a share of the profits. In the

first case, the individual creates durable consumer goods, hoping the services from the good will

make his life better. In the second, the individual becomes an entrepreneur using the resource to

produce goods and services for others in the hope of a profitable sale. The third case describes a

lender, and the fourth describes an investor in a share of the business. In each case, the consumer

obtains a durable asset or investment, and accounts for that asset by recording an equivalent

liability. As time passes, and both prices and interest rates change, the value of the asset and

liability also change.

An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a

future return or interest from it. The word originates in the Latin "vest is", meaning garment, and

refers to the act of putting things (money or other claims to resources) into others' pockets. See

Invest. The basic meaning of the term being an asset held to have some recurring or capital

gains. It is an asset that is expected to give returns without any work on the asset per se. The term

"investment" is used differently in economics and in finance. Economists refer to a real


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investment (such as a machine or a house), while financial economists refer to a financial asset,

such as money that is put into a bank or the market, which may then be used to buy a real asset.

In finance

In finance, investment is the commitment of funds by buying securities or other monetary or

paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets

such as gold or collectibles. Valuation is the method for assessing whether a potential investment

is worth its price. Returns on investments will follow the risk-return spectrum.

Types of financial investments include shares, other equity investment, and bonds (including

bonds denominated in foreign currencies). These financial assets are then expected to provide

income or positive future cash flows, and may increase or decrease in value giving the investor

capital gains or losses.

Trades in contingent claims or derivative securities do not necessarily have future positive

expected cash flows, and so are not considered assets, or strictly speaking, securities or

investments. Nevertheless, since their cash flows are closely related to (or derived from) those of

specific securities, they are often studied as or treated as investments.

Investments are often made indirectly through intermediaries, such as banks, mutual funds

pension funds, insurance companies, collective investment schemes, and investment clubs

Though their legal and procedural details differ, an intermediary generally makes an investment

using money from many individuals, each of whom receives a claim on the intermediary.

Within personal finance, money used to purchase shares, put in a collective investment scheme

or used to buy any asset where there is an element of capital risk is deemed an investment

Saving within personal finance refers to money put aside, normally on a regular basis. This

distinction is important, as investment risk can cause a capital loss when an investment is

realized, unlike saving(s) where the more limited risk is cash devaluing due to inflation.

In many instances the terms saving and investment are used interchangeably, which confuses this

distinction. For example many deposit accounts are labeled as investment accounts by banks for


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marketing purposes. Whether an asset is a saving(s) or an investment depends on where the

money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment.

Common man needs money Common man asks Bank Bank gives money but asks his House

collateral(in return) both agree on Houses value to be X and mortgage loan given based on

this amount but mortgage loan has clause for adjustable interest rate small introductory rate

HUGE interests thereafter common man looks at introductory rate and decided not an issue

will be able to pay up meanwhile Bank decides it needs good mechanism to manage money,

costs, investment etc Bank chops up all mortgage payments from Common Man and sells to

other banks and investing firms as Investment opportunities promising a percentage from

mortgage payments (called MBS) Parties also interested since real estate thought to be a

golden investment (should Common main fail to pay up loan and lose house(foreclosure byCommon Man) ) After first two years past introductory rates, interests payable by common

man sky rocket (inflation and other factors not helping) common man unable to pay loan

common man loses house :( number of common men losing house tremendously increases

suddenly all mortgage giving banks have lot of real estate without people to buy banks have to

pay MBS investors something selling of house does not seem possible crux of problem

reached in order to make sure their rears not sued to glory mortgage giving banks file for

bankruptcy.

Gaining competitive advantage in the Investment Banking sector

The speed and scale of change in the investment banking industry is breathtaking. Increasingly

sophisticated clients require increasingly sophisticated services. That, combined with regulatory

regimes imposing ever more stringent compliance requirements, makes the industry one of the

most competitive

So what determines success in the sector? Now more than ever the bank that achieves

competitive success will have:

y the deepest understanding of the clients needs,

y the greatest insight into the clients market dynamics, and


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y the clearest appreciation of the latest corporate and regulatory frameworks.

Ultimately its all about proposing the right deal to the right client at the right time. That may

sound very straight forward, but we know that the lead-up to that point involves a complex web

of long-term relationship building, deep market insight, and a thorough understanding of the

client.

TheBusinessProblem

The modern and successful investment bank is one that is truly able to:

y Leverage its collective client contacts and relationships

y Protect ownership, sensitivities and confidentialities

y Learn and understand the clients specific business needs and objectives

y Develop, share and demonstrate deep market sector insight

y React and act quickly

Sadly very few investment banks have the modern systems or infrastructure in place to facilitate

this. Instead they typically rely on the periodic aggregation of fragmented and piecemeal

information from various sources such as back-office systems, spreadsheets, equity/analyst

research reports, email trails, powerpoint presentations, public sources such as the internet, and

subscription services such as D&B. All this results in wasted time, protracted decisions, lack of

collaborative knowledge sharing, and in the worst cases, lost deals

TheBusinessSolution

Attunity InFocus allows individual investment bankers to be more proactive, productive and

efficient in serving their clients needs. It dramatically increases their effectiveness, ability to

identify issues and resolve them by:


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1.Developing and managing contacts. Leveraging the banks collective contact relationships

within the client, whilst protecting ownership, sensitivities and confidentialities of those

contacts.

2.Focusing on the client. Bringing together all the relevant contextual information about a

client, from external and internal sources, in real-time.

3.Sharing collective knowledge. Collaboratively reviewing, discussing and sharing

experiences, market information, models and analytics pertinent to the client

The Indian banking Industry is in the middle of an IT revolution, Focusing on the

expansion of retail and rural banking. Players are becoming increasingly customer -

centric in their approach, which has resulted in innovative methods of offering new banking

products and services. Banks are now realizing the importance of being a big playe

and are beginning to focus their attention on mergers and acquisitions to take advantage

of economies of scale and/or comply with Basel II regulation.Indian banking industryassets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion

of foreign capital, says Prathima Rajan, analyst in Celent's banking group and author of the

report.The banking industry should focus on having a small number of large players that can

compete globally rather than having a large number of fragmented players."


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Objectives of the study

To study of market share in banking sector of ICICI and HDFC.

To study the consumer satisfaction with ICICI and HDFC.

To know about the position of ICICI bank in market.

To analyze the decision making process of the consumers.

To know about company history and organization structure.

Provide an overview of investment options of HDFC bank. & ICICI bank.

To make a comparative performance of unit linked plans

To study the expectations of customers from banking companies.

Position of banking Companies in the mind of the consumer

.


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CHAPTER-2


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Organazation profile

ICICI BANK

ICICI Bank is India's second-largest bank with total assets of about Rs. 1 trillion and a network

of about 540 branches and offices and over 1,000 ATMs. ICICI Bank offers a wide range of

banking products and financial services to corporate and retail customers through a variety o

delivery channels and through its specialized subsidiaries and affiliates in the areas of investment

banking, life and non-Banking , venture capital, asset management and information technology

ICICI Bank's equity shares are listed in India on stock exchanges at Chennai, Muzaffarnagar,Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India

Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock

Exchange (NYSE).

Corporate Profile

ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion (US$ 100

billion) as on March 31, 2008.

Board of Directors

ICICI Bank's Board members include eminent individuals with a wealth of experience in

international business, management consulting, banking and financial


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Corporate Social Responsibility

ICICI Bank is deeply engaged in human and economic development at the national level. The

Bank works closely with ICICI Foundation across diverse sectors and programs.

Investment Products Of Icici Bank

At ICICI Bank, we care about all your needs. Along with Deposit products and Loan offerings,

ICICI Bank assists you to manage your finances by providing various investment options

ranging from ICICI Bank Tax Saving Bonds to Equity Investments through Initial Public Offers

and Investment in Pure Gold. ICICI Bank facilitates following investment products:

ICICI Bank Bonds

y All ICICI Bank Bonds have been rated "AAA" by CARE and "LAAA" by ICRA

indicating the highest degree of safety for your money.

y All Investment in ICICI Bank Tax Saving Bonds issued upto March 2005 are eligible for

tax rebate under Sec 88 to the full extent possible.

y Bonds are listed on BSE, NSE.

GOI Bonds

8% Savings Bonds (Taxable), 2003

y Low risk.

y Reasonable investment tenure.

y Nomination facility available.

y Cannot be traded in secondary market.

y Interest income taxable.


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Mutual Funds-

Mutual Funds Investments Through ICICI Bank

ICICI Bank Mutual Funds services aim at helping you design the ideal portfolio for your

investment requirements. At ICICI Bank, we help you identify the appropriate mix of Mutua

Fund schemes on the basis of asset allocation strategies. Invest in various schemes of multiple

mutual funds with a satisfactory performance record and reap the benefits. Additionally, ICICI

Bank Mutual Funds services also equips you with various research reports to help you make an

informed decision.

IPO

Invest in IPOs Online

You can invest in IPOs online through www.icicidirect.com with same convenience of investing

in equities - hassle-free and with zero paper work. Also, get in-depth analyses of new IPOs issues

(Initial Public Offerings) which are about to hit the market. IPO calendar, recent IPO listings,

prospectus/offer documents and live prices will help you keep on top of the IPO markets.

ICICI Bank Pure Gold

Gold has been traditionally the most favoured form of investment for Indians. In fact, India, even

today is amongst the highest consumers of Gold in the world. However, the Gold market remains

largely unorganized with reliability and convenience remaining the key issues for gold buyers in

the country.

ICICI Bank with its Pure Gold offer attempts to bridge the gap between the need of the

customers for buying gold and availability of an organized avenue to satisfy that need, by taking

care of the two key components Reliability and Convenience.


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Reliability

24 Carat ICICI Bank Pure Gold is imported from Switzerland. This Gold carries a 99.99% Assay

Certification, signifying highest level of purity, as per international standards.

Convenience

ICICI Bank Pure Gold is competitively priced based on daily prices in the international bullion

market. Currently, gold is available in 2.5g, 5g, 8g, 20g and 50g categories, subsequently other

denominations will also be introduced.

ICICI Bank Pure Gold is available through select branches of ICICI Bank*.

*ICICI Bank Pure Gold is not available through ICICI Bank ATM's.

Forex Services

The next time when you travel abroad for business or for leisure, relax, let ICICI Bank's Foreign

Exchange Services take care of your foreign exchange requirement.

ICICI Bank's Foreign Exchange Services will help you organise your foreign exchange in the

most hassle free manner. Whether its Foreign Currency, Travellers Cheques or Travel Card,

ICICI Bank Foreign Exchange Services is a one-stop solution to your foreign exchange

requirement


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Company profile

HDFC BANK

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in

the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The

bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with it

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled

Commercial Bank in January 1995.

HDFC is India's premier housing finance company and enjoys an impeccable track record

in India as well as in international markets. Since its inception in 1977, the Corporation

has maintained a consistent and healthy growth in its operations to remain the market leader in

mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has

developed significant expertise in retail mortgage loans to different market segments and also

has a large corporate client base for its housing related credit facilities. With its

experience in the financial markets, a strong market reputation, large shareholder base and


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unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian

environment.

HDFC Bank began operations in 1995 with a simple mission : to be a World Class Indian

Bank. We realized that only a single minded focus on product quality and service

excellence would help us get there. Today, we are proud to say that we are well on our

way towards that goal.

Investment Options Of Hdfc Bank-

1) Mutual funds

Mutual funds are funds that pool the money of several investors to invest in equity or debt

markets. Mutual Funds could be Equity funds, Debt funds or balanced funds. Funds are selectedon quantitative parameters like volatality, FAMA Model, risk adjusted returns, rolling return

coupled with a qualitative analysis of fund performance and investment styles through regular

interactions / due diligence processes with fund managers.

March 2006 March 2007 March 2008

Citied 228 316 327

Branches 535 684 761

ATMs 1323 1605 1977


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2) BondsJust as people need money, so do companies and governments. A company needs funds to

expand into new markets, while governments need money for everything from infrastructure to

social programs. The problem large organizations run into is that they typically need far more

money than the average bank can provide. The solution is to raise money by issuing bonds (or

other debt instruments) to a public market. Thousands of investors then each lend a portion of the

capital needed. A bond is nothing more than a loan for which you are the lender. The

organization that sells a bond is known as the issuer. You can think of a bond as an IOU given by

a borrower (the issuer) to a lender (the investor).

3) HLV calculatery This is the money you spend on yourself & towards taxation

y Anything that can be converted into cash in the next 7 days can be termed as a liquid

asset e.g. Cash, FD, Bank Savings, MFs, Shares etc

y This is the amount outstanding against you e.g. housing loan, personal loan, credit card

outstanding etc.

4) IPO-

HDFC Bank presents Mudra, an offering worth its weight in gold. Mudra is a 24 Carat

99.99% pure gold bar that you can purchase for investment or gifting

Gold continues to be one asset that appreciates steadily. HDFC Bank now offers Pure Gold bars

imported from Switzerland with an Assay certification, signifying the highest level of purity as

per international standards.


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CHAPTER-3


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LITERATURE REVIEW


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1)Pricing of Initial Public OffersAn Analysis of Corporate Practices and Investors Preferences

Pricing of an IPO is based on the price discovery method. Book-building is recommended as a

price discovery method using the price band on the basis of real demand for the securities. It is

the investors who determine the price. This process attempts to eliminate the over pricing of

securities. The era of free pricing of securities has offered advantages to companies and

investors. However, a common opinion prevails that book-building method followed by the

corporate has not yet got a wide acceptance in the Indian context. Investors perceptions about

corporate practices help issuers to make proper decision in pricing of securities.

Regulatory Framework of Pricing

Pricing of capital is important in the sense that it has bearing on the efficiency of the capita

market to allocate resources for the productive needs of the society. By efficiency it is meant

that new information is widely, quickly and cheaply available to investors that this information

includes what is knowable and relevant for judging securities and that is rapidly reflected

inequity prices (Aggarwal, 1997). Pricing of IPOs is the process of fixing price of new issuesBefore 1947, there was no regulation to monitor the pricing of the securities. The companies

were not required to take any approval from the authorities regarding timing, quantum and

pricing of securities. The Capital Issues [Control] Act 1947 was passed to control the public

issue

made by the companies and to protect the investors interests. According to this Act, companies

were required to take prior approval from the Controller of Capital Issues for mobilizing funds

in the primary market.

The important highlights of this Act are as follows:

1. Decisions regarding timing, quantum and pricing of issues were taken by the Controller of

Capital Issue and not by the company promoters.

2. New company could not issue its securities at premium or at discount.


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3. Such of those existing companies which have a good track record of reserves can issue shares

at premium.

4. The ICCI Act prescribed formula to calculate premium based on two criteria viz. net assets

value and profit earning capability value (Bharathi,2004). Net assets value (NAV) is calculated

as equity capital plus free.

Author- M. R. SHOLLAPUR AND M. U. SUNAGAR

www.ecocomm.anu.edu.au


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2) Productivity-based Comparative Analysis ofPublic, Private and Foreign Banks

Introduction

Indian policymakers at the national level deliberately shifted for a series of economic reforms in

the wake of a serious balance-of-payments crisis in1991. To start with the reforms process, the

central plank was to carry out reforms in the financial sector with the banking being the mainstay

of financial intermediation. The objective of the banking sector reforms was to promote a

diversified, efficient and competitive banking and financial system with the ultimate objective of

improving the allocative competence of resources through operational flexibility, improved

economic viability, institutional strengthening and superior level of productivity.

In order to meet the real challenge of value creation in corporate world, we need to make the

employees quite productive and need to relate their compensation with goals achievement level,

which would yield the overall productivity in place in such organization. Tying peoples

compensation and incentives to a companys value creation metrics would take the organizationto different state of growth in that industry. On the other hand waiting too long to tie

performance measures to compensation and incentives tends to cause people to drag

their feet. Theyre still being evaluated under the old compensation criteria so they dont really

have much motivation to change the way they do their jobs. However, people will adhere to the

new set of metrics and show improved productivity if theyre certain that the new compensation

or incentive system will be in place soon.

It does not mean that everyone involved in the process works harder but rather that they must

work smarter so as to achieve a better utilization of all other resources. Analysis shows that

average per capita annual emoluments of SBI are Rs0.31 million and that of ICICI bank are 0.36

million but ACGR for these banks for the period 2001-06 are 11.06 and 22.92 percent. There are

so many other differences between earning per employee, business per employee and profit per

employee of banks. But is there any relation between the serising earnings of employees and


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business and profits of banks. Therefore, and productivity of bank employees is surely a topic to

be researched.

Author -KARAM PAL AND PUJA GOYAL

http://wwwwds.worldbank.org

3)Performance Evaluation of selectedIndian Mutual Fund Schemes

;

This paper evaluates the performance of selected mutual fund schemes in the framework of risk

and return during the period April, 2000 to March 2005.The performance of measures used are

Sharpe ratio, Treynor ratio, Jensen measure, Sharpe differential return measure and fama s

components of performance. The results indicate Failure of many selected schemes

outperforming the market, low average beta, disproportionate un systematic risk, miss-match of

the risk and return relationship in some schemes, failure of some schemes in generating

mandated return and negative net selectivity in more number of schemes. These can be mainly

attributed to the lack of professional management skills in security analysis and consequent poor

stock selection, inadequate diversification on the one hand and highly conservative approach in

constructing portfolios when market conditions demand aggressive portfolios on the other hand.

The mutual fund industry is a fast growing sector of the Indian capital and financial markets.

They have become major vehicle for mobilization of savings, especially from the small and

household savers for investment in the capital market. Mutual funds entered the Indian capital

market in 1964 with a view to provide the retail investors the benefit of diversification of risk

assure d returns, professional management. Since then they have grown phenomenally in terms

of number, size of operations, investors base and scope. The liberalization, privatization and

globalization measures undertaken by the Government of India opened the way for the entry of


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private sector and foreign players into this industry. Consequently, this has emerged as a highly

competitive financial service industry today. In India the mutual fund industry had its origin with

the establishment of Unit Trust of India in 1964. Public Sector banks and financial institutions

began to establish mutual funds in 1987. The private sector and foreign institutions were allowed

to set up mutual funds in 1993. Mutual funds have all come forward with a varying schemes

suitable to the need of saving populace.

This paper analyzed the performance of the selected mutual fund schemes by using the leading

performance measures like Sharpe, Treynor, Jensen and Sharpe differential return. Further, the

overall performance of these schemes has been analyzed by decomposing their performance into

various components as per Fama s measure. The monthly net asset values of 60mutual fund

schemes for the five years period i.e., from April 2000 to March2005 are used to calculate the

rate of return of selected schemes, which are compared with the market return represented by

BSE Sensex, and risk free rate of return represented by 91-days Treasury Bills.

The empirical results reported here indicated failure of many selected scheme sin outperforming

the market, low average beta, disproportionate unsystematic risk, miss-match of the risk and

return relationship in some schemes, failure of some schemes are the other significant

observation in the study. These can be mainly attributed to the lack of professional management

skills in

security analysis and consequent poor stock selection, inadequate diversification on the one hand

and highly conservative approach in constructing portfolios when market conditions demand

aggressive portfolio son the other hand. Hence, the managers of the schemes have to redesign

and change the investment pattern by identifying the likely phases in the market (bullish/

bearish) well in advance and emerging stocks on a continuous basis. This requires rigorou

equity research on the part of mutual funds. In other words, they have to adopt an active

approach to

portfolio construction rather than a passive approach

Author- b. Phaniswara Raju and k. Mallikarjuna rao

www.management-rating.com


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4) SBI CUTS HOME LOAN RATES FOR FIRST 3 YEARS

State Bank of India has launched two special home loan schemes that assure low interest rates

in the first three years, upping the ante for its rivals in the market which has turned bullish

HDFC has said it will take a view after the Budget, which is only days away. ICICI Bank said

it has reduced interest rates in line with the movement of systemic rates and deposit costs

since December `08. We believe that the home loan segment has robust potential and we

would continue to focus on this segment, said an ICICI Bank spokesperson. LIC Housing

Financethe second-largest mortgage finance companyhas also reduced home loans .

The intensity of the competition between SBI and HDFC is evident from claims and counter-

claims from both sides on the superiority of their product. Even if the borrower gets a better

deal for the first three years, his payment over the remaining tenure of the loan will be lower

under an HDFC loan, said HDFC joint MD Renu Karnad. The institutions chairman,

Deepak Parekh, had recently announced a possibility of lending rates coming down if there is

a decline in cost of funds.

According to Ms Karnad, there has been a remarkable pickup in home sales. We are seeing

this because of a real reduction in property prices. Builders like Unitech and Lodha have

brought down rates in Delhi and Mumbai and are seeing growth in sales. She added that thepickup in sales was so sturdy that prices have started picking up againa perception echoed

by SBI. There is a definite pickup in home purchases partly driven by a fall in cost of loans

and real fall in property prices. There are pockets where the resurgence is so good that

property prices have started picking up; it has come a full circle quickly, said an SBI official

.

The official said rates have bottomed out and there is a possibility that they may go up

marginally in the medium term. The official added that the bank has lent up to Rs 7,171

crore till the end of May `09 under the special scheme that offers loans at 8% for the first year.

This is a sizeable number considering that disbursements during the whole of FY09 was Rs

9,372 crore. SBI has home loan portfolio of over Rs 56,000 crore.


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There is a concern among borrowers that a rise in rates will increase their liabilities. We are

telling them that their EMIs are frozen for the next 36 months, she said.

SBI has introduced two new productsSBI Easy Loan for amounts up to Rs 30 lakh and

SBI Advantage Home Loan for loans above Rs 30 lakh. Under both these schemes, the

interest would be applied at a special rate of 8% for the first year. Under SBI Easy, interest

rates for the second and third years are fixed at 9%. From the fourth year, the customer can

choose between a floating rate of 2% below the State Bank Advance Rate (SBAR) and a

fixed rate of 1% below SBAR with a five-year reset. SBAR is the bank benchmark rate ..

Under SBI Advantage, the interest rate is fixed at 9.5% per annum for the second and third

years. From the fourth year, the customer can choose between a floating rate of 1% below

SBAR and a fixed rate of 0.5% below SBAR with a five-year reset. At present, both ICICI

Bank and HDFC charge 9.25% for loans up to Rs 30 lakh.

The 8% special rate was introduced by SBI in February 2009. This scheme was brought out

by SBI as an adjunct to an industry-wide special home loan scheme introduced by the Indian

Banks Association at the behest of the government as part of its stimulus package. Although

the scheme ends on Tuesday, many bankers feel a new scheme could be announced.

Author-santosh sabarwal

http://www.articlealley.com/article_974627_33.html


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5) Investment Banking Analyst: Meeting Investment Concern WithChances

The aspect of investment banking gives the opportunity for business entities and economic

enthusiast to gain additional investment funds for their respective economic interest of

growth and profit. Generally, the investment banking aspect operates in a system wherein

interested parties can participate and gain in the profitable condition of other business

entities thus promoting additional investment for their growth. This relationship in the field

of investment banking creates a mutual benefit for both parties.

In the aspect though of matching the two points involved in the field of investment banking,

it is important to know first the two ends involved in the said economic field namely the

desiring investor with the financial resources and the profitable opportunities either through

buying stock shares or selling them in the market. For this interest, both of the said parties

involved in this economic system turn towards the presence of the investment banking

analyst to realize and put

.

Generally, investment banking analysts perform as both the primary information source and

the middlemen for each investment banking operation and transaction. Because they are the

party that maintain the profitable conditions and transaction in this economic field, their

presence serves as the link for cyclical behavior of the investment banking field. Due to this

significance, it is important to seek out their services and assistance prior to engaging in an

agreement

For the desiring investor, the services of investment banking analysts serve as the primary

manifestation of their profit interest because this is the party that actually searches possible

and effective options towards the said concern. Generally, the participants in this party help

the investor in finding profitable opportunities in the market through significant


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recommendations and analysis outlook about the potential outlook of the economy and the

performance of the targeted organizations.

Their significance is generally directed towards both aspect of selling and buying shares and

stocks with business organizations or with other investors in the field depending upon the

mutual agreement and desire of both parties. On the other side, investment banking analysts

are also the one recruiting possible investors for the business entities aiming to outsource

additional financial resources for their business operation more often for expansion concern.

Indeed, with this significance of the analyst in the said economic field, more and more

people are becoming attracted towards investment banking careers to take part in the

profitable payoffs of this job for their personal financial concern. In general, when equip

with profit interest and financial investment resources, .

Author: Larry Y. Hodge


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6) SBI CUTS HOME LOAN RATES FOR FIRST 3 YEARS

State Bank of India has launched two special home loan schemes that assure low interest rate

the first three years, upping the ante for its rivals in the market which has turned bullish followin

pickup.

HDFC has said it will take a view after the Budget, which is only days away. ICICI Bank said it

reduced interest rates in line with the movement of systemic rates and deposit costs since Decem

`08. We believe that the home loan segment has robust potential and we would continue to fo

on this segment, said an ICICI Bank spokesperson. LIC Housing Financethe second-larg

mortgage finance companyhas also reduced home loans for existing borrowers by 50 b

points.The intensity of the competition between SBI and HDFC is evident from claims and counter-cla

from both sides on the superiority of their product. Even if the borrower gets a better deal for

first three years, his payment over the remaining tenure of the loan will be lower under an HD

loan, said HDFC joint MD Renu Karnad. The institutions chairman, Deepak Parekh, had rece

announced a possibility of lending rates coming down if there is a decline in cost of funds.

According to Ms Karnad, there has been a remarkable pickup in home sales. We are seeing t

because of a real reduction in property prices. Builders like Unitech and Lodha have brought do

rates in Delhi and Mumbai and are seeing growth in sales. She added that the pickup in sales w

so sturdy that prices have started picking up againa perception echoed by SBI. There

definite pickup in home purchases partly driven by a fall in cost of loans and real fall in prope

prices. There are pockets where the resurgence is so good that property prices have started pick

up; it has come a full circle quickly, said an SBI official who did not wish to be nam

The official said rates have bottomed out and there is a possibility that they may go up margin

in the medium term. The official added that the bank has lent up to Rs 7,171 crore till the end

May `09 under the special scheme that offers loans at 8% for the first year. This is a sizea

number considering that disbursements during the whole of FY09 was Rs 9,372 crore. SBI

home loan portfolio of over Rs 56,000 crore.


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There is a concern among borrowers that a rise in rates will increase their liabilities. We a

telling them that their EMIs are frozen for the next 36 months, she sa

SBI has introduced two new productsSBI Easy Loan for amounts up to Rs 30 lakh and S

Advantage Home Loan for loans above Rs 30 lakh. Under both these schemes, the interest woube applied at a special rate of 8% for the first year. Under SBI Easy, interest rates for the seco

and third years are fixed at 9%. From the fourth year, the customer can choose between a floati

rate of 2% below the State Bank Advance Rate (SBAR) and a fixed rate of 1% below SBAR w

a five-year reset. SBAR is the bank benchmark rate to which all floating rate loans are pegg

Under SBI Advantage, the interest rate is fixed at 9.5% per annum for the second and third yea

From the fourth year, the customer can choose between a floating rate of 1% below SBAR an

fixed rate of 0.5% below SBAR with a five-year reset. At present, both ICICI Bank and HDF

charge 9.25% for loans up to Rs 30 lakh. For loans above Rs 30 lakh, HDFC charges 9.75% a

ICICI10-11%.

The 8% special rate was introduced by SBI in February 2009. This scheme was brought out

SBI as an adjunct to an industry-wide special home loan scheme introduced by the Indian Bank

Association at the behest of the government as part of its stimulus package. Although the schem

ends on Tuesday, many bankers feel a new scheme could be announced.

Author-santosh sabarwal



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7) Investment Banking Analyst: Meeting Investment Concern With Chances

The aspect of investment banking gives the opportunity for business entities and econom

enthusiast to gain additional investment funds for their respective economic interest of growth a

profit. Generally, the investment banking aspect operates in a system wherein interested part

can participate and gain in the profitable condition of other business entities thus promoti

additional investment for their growth. This relationship in the field of investment banking crea

a mutual benefit for both parties giving them respectively their desired prof

In the aspect though of matching the two points involved in the field of investment banking, it

important to know first the two ends involved in the said economic field namely the desiri

investor with the financial resources and the profitable opportunities either through buying sto

shares or selling them in the market. For this interest, both of the said parties involved in t

economic system turn towards the presence of the investment banking analyst to realize and put

in.

Generally, investment banking analysts perform as both the primary information source and

middlemen for each investment banking operation and transaction. Because they are the party th

maintain the profitable conditions and transaction in this economic field, their presence serves

the link for cyclical behavior of the investment banking field. Due to this significance, it

important to seek out their services and assistance prior to engaging in an agreement

transaction.

For the desiring investor, the services of investment banking analysts serve as the prima

manifestation of their profit interest because this is the party that actually searches possible a

effective options towards the said concern. Generally, the participants in this party help t

investor in finding profitable opportunities in the market through significant recommendatio


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and analysis outlook about the potential outlook of the economy and the performance of t

targeted organizations.

Their significance is generally directed towards both aspect of selling and buying shares a

stocks with business organizations or with other investors in the field depending upon the mut

agreement and desire of both parties. On the other side, investment banking analysts are also t

one recruiting possible investors for the business entities aiming to outsource additional financ

resources for their business operation more often for expansion conce

Indeed, with this significance of the analyst in the said economic field, more and more people

becoming attracted towards investment banking careers to take part in the profitable payoffs

this job for their personal financial concern. In general, when equip with profit interest a

financial investment resources, remember to consult with an investment banking anal

Author: Larry Y. Hodge

WWW.article alley.com-972467.htt.32


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8) A Guide To Investment Bank Ranking9) How to choose the best bank

After some dreaded experiences with banks, have you chosen to keep your cash in the piggy

bank? Invariably, people are unable to find the right bank that can offer services to thei

satisfaction. When you find out the kind of banking service you require then it becomes easy for

You to find a bank for yourself.

.

After pondering about all the good and bad experiences with banks, I think, at first, it is best to

know what you want the bank to do with your cash. You must know your banking behavior. Ask

questions to yourself- whether you would like to deposit periodically and grow the money or

you would transact frequently , whether you want international banking or local banking. You

should have a clear idea because you need to explain the banker.

Banking requires some of your time and patience. You must look for a bank that is open for

services when you can manage being there. If you desire to access Internet banking then look for

a bank that helps you to carry out transactions rapidly and professionally through Internet.

Banks typically claim that for every one dollar they have in assets, they like to lend out 60 cents

and keep 20 cents in cash and 20 cents in secondary reserves, which can be made liquid in one

or two days. Find out from the bank, that you are visiting, as to how they check out on these

ratios.

Another determination in selecting a bank is the fees. The competition for your money can be

fierce and many banks will offer very low or no fee accounts. Still, there can be other hidden

fees to watch out for. Always ask a potential bank what they charge for ATM, Live Teller use,

checks, over drafts, stop payments, canceled checks, statements and balance inquiries, interest


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rates , minimum balances etc. You must compare these fees and other services with other banks.

You must also forecast how you want to use the bank in future. Many banks offer special rates

for car loans, mortgages and financial planning. If you have any such prospects then you mus

Talk about these particulars also with the bankers.

Bank shopping can prove to be very advantageous in the future. After you have been connected

with a bank for many years, the bank would easily lend you cash, provide good reference to a

mortgagor, and keep offering you various services. Switching banks is not a good idea, as you

will forfeit these benefits by doing so. By having patience and doing your homework, you might

The bank that is perfect for you.

Author: Anne Mitsuhttp://www.articlealley.com/article_1376927_19.html


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10) Impact of Financial Services Act on Investment ProductsThe implementation of the Financial Services Act 1986 has forced retailers of investment

products to become tied to a single insurance company or to act as an independent by selecting

the best product for the customer from the entire market. As a result of this many retailers of

investment products have become tied to single insurance companies leading to a significant

change in the relationship between the manufacturers and retailers of financial products. In

addition there has been a sharp reduction in the levels of business transacted through the

independent channel and the availability of independent financial advice. This has affected

manufacturers in different ways depending upon their existing sources and mix of business. In

the longer term this is likely to lead to a reduction in the number of life offices and the more

rapid creation of financial conglomerates based upon the top ten banks and building societies.

Author-David w Shelton

http://www.emeraldinsight.com/10.1108/02652329010139601


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11) Investment in internet banking as a real option: theory andtests

.

This paper examines the optimal exercise of strategic real options to invest in Internetbanking (IB) technology within a two-stage game, parameterized by the distribution of bank

size and uncertainty over the profitability of investment, and empirically tests the results. The

value of the strategic investment option to a strategically significant entrant into IB depends

on both expected future profits as well as the variance of those profits. Expected profits to an

entrant depend, in equilibrium, on its size, as measured by existing market share

(concentration) or total assets, relative to its rivals. Conditional on the degree of uncertainty

larger banks should, as a consequence, exercise their options earlier than smaller banks, for

purely strategic advantages, and act as market leaders in the provision of IB services. Like

ordinary options, however, the value of the strategic investment option to both large and

small banks increases in uncertainty, implying that early exercise will be more likely the

more information is available about potential demand. We test these hypotheses on

investment in IB services with data from a sample of 1618 commercial banks in the tenth

Federal Reserve District during 1999. Consistent with our hypotheses, relative bank size, as

measured by measures of concentration, and demographic information predictive of future

demand both positively influence the probability of entry into IB in our sample.

Recently, banks have found themselves facing more aggressive competition, uncertainty and

unlimited opportunities. No bank can offer all products/services and be the best/leading bank

for all customers. They are forced to find a new basis for competition. A bank must examine

its strengths and opportunities and take a competitive position in the competitive

marketplace. Discusses some strategic issues related to bank positioning. A number of ways

in which distinctive positions can be developed and maintained have been identified. A well-

integrated application of technology and staff through operations that respond to customer

needs encourage customers to use a whole range of banking products/services rather than just

a few. It also helps to build loyalty by creating deeper and fuller customer relationships

Surveys how a bank has been selected and perceived from the point of view of its customers

in relation to its competitors in that marketplace. Reveals that in Sweden, there is no single


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leading bank in all financial areas, but there are a number of leaders: a leader in terms of

deposit base, a leader in terms of loans outstanding base, a largest bank in terms of assets,

and a niche leader bank. Shows that functional quality is a more important factor than

traditional marketing activities. As expected, convenience of location, price and advertising

had a minor impact on bank selection.

Author john k kennedy

www.articlealley .com-923345.htt.34


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12)

Leading Through Customer Service : The ICICIBank Way

In the age of fast changing market dynamics in the banking industry, sticking the neck out has

become more and more complex. It had been more complex for a private bank as there are a lots

of support provided to public sector bank. ICICI Bank has been one that found the way out and

key was with the customers of the bank. The bank pursued the policy of keeping the customer

happy and in a very short period of time, it became second largest bank of the country. The bank

is a role model for many of the new banks. The present paper attempts to elaborate the customer

centric initiatives taken by ICICI Bank which made it leader in Indian banking space and is

taking the bank to places.

The forces of globalization, liberalization and technology are fundamentally changing the global

economic order. Technological advances have resulted in the death of distance,

time and location and liberalization and globalization have led to reduce barriers to entry, shorter

strategy and product cycles, commoditization of products and increased competition.

These factors have impacted financial services market considerably and coupled with the rapid

evolution of the electronic world have led to easier production and global distribution of

all financial services. The Indian financial sector is impacted by these developments. The

financial sector reforms over the past decade was later changed to ICICI Limited .ICICI

Bank has been leading from the front. Once development financial institution is today offering a

wide range of banking products and financial services to corporate and retail customers through a

variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of

investment banking, merchant banking, commercial banking, life and non-life insurance, venture

capital, asset management and information technology. ICICI Bank is Indias second-largest

bank with total assets of over Rs. 1 trillion and a network of about 540 branches

and offices and over 2,000 ATMs and largest call center with 1700 seats.


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As a part of its endeavour of being the change leader, the bank introduced several new things for

the first time. To name few are as follows:

ICICI was the first intermediary to move away from single prime rate to three-tier prime rates

structure and introduced yield curve based pricing.

ICICI became the first Indian Company in Indian Financial sector to raise GDR.

ICICI becomes the first Indian Company to list on the NYSE through an issue of American

Depositary Shares.

By aparna iyer

http://www.buzzle.com/articles/best -investment-options.html


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13) Customer Orientation in Designing Mutual Fund Products: AnAnalytical Approach to Indian Market Preferences

The significant outcome of the government policy of liberalisation in industria

and financial sector has been the development of new financial instruments.

These new instruments are expected to impart greater competitiveness flexibility

and efficiency to the financial sector. Growth and development of various mutual

fund products in Indian capital market has proved to be one of the most catalytic

instruments in generating momentous investment growth in the capital market

There is a substantial growth in the mutual fund market due to a high level of

precision in the design and marketing of variety of mutual fund products by banks

and other financial institution providing growth, liquidity and return. In this

context, prioritization, preference building and close monitoring of mutual funds

are essentials for fund managers to make this the strongest and most preferred

instrument in Indian capital market for the coming years. With the decline in the

bank interest rates, frequent fluct...

Description: Scholarly Article of Dr. Tapan K Panda and Dr. Nalini Prava Tripathy

URI: http://hdl.handle.net/2259/198


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14)Best investment options

The following investment options may help people settle on the best investment. Options should

be carefully evaluated, keeping in mind the pros and cons of the same

A multitude of investment options are available to people who would like to ensure that their

money multiplies at a faster rate, as compared to the rate at which it would accrue interest, if

deposited in a savings account. People may choose to invest actively in the market or earn

residual and leveraged income through passive means. While reading this article on best

investment options, one must bear in mind that investments should be examined on the basis of

the investment objectives and the degree of risk and uncertainty involved. Since risk and return

are directly proportional, best investing options for risk-averse and risk tolerant individuals wil

differ. Even people sharing the same level of risk tolerance may find that adopting a different

approach than what works for their counterparts, may help them achieve their specific

investment objective. Know more on passive income opportunities.

Whats are the best investment options?

Investments for risk averse individuals

In the present market, Treasury Inflation Protected Securities (TIPS), may be the best investment

for risk averse individuals, since these are backed by the full-faith of the US govt. Moreover, the

bondholder has the option of investing in bonds with maturities of 5, 10 or 30 years. The investor

is guaranteed a fixed rate of interest semi-annually and on maturity, the bondholder is paid the

inflation adjusted principal. Read more on best investments .during inflation Risk averse

individuals, who would like to invest for short periods of time, have the option of purchasing a

fixed rate CD for a period of six months, one year, five years or more. A CD or a Certificate of

Deposit offers a rate of interest that is higher than the rate of interest than one can hope to earn

on a savings account deposit. The safety of the money is guaranteed, since deposits of up to

$250,000 are insured by the FDIC (Federal Deposit Insurance Corporation). However, there are a

couple of disadvantages when it comes to a CD. Since, the rate of interest is fixed, the return on

investment may be less on account of inflation. Moreover, the money cannot be withdrawn


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before the maturity period ends else, the consumer would have to pay a penalty.

A money market account (MMA) allows one to close the account, as and when desired and

withdraw money 3-5 times a month, using a check. The rate of interest on an MMA is slightly

less than that on a CD, but at least double that of a savings account. However, inflation is still a

source of concern. In the absence of inflation, MMAs could have qualified as one of the best

short term investment options. However, in the current scenario, TIPS are ideal investments

Interested readers may refer to the article titled, 'How does a Money Market Account Work'.

Fixed income mutual funds may not be a smart idea in the current market and generally, fixed

income annuities do not provide inflation adjusted income. However, a few fixed income

Annuities include the inflation rider, but at a higher cost.

Investments for people with above risk tolerance.

.

Apartment REITs (Real Estate Investment Trusts) may not be a bad idea given the slump in the

housing market. However, one must remember that these are not always safe. This is because

they invest in real estate and the real estate market, as we all know, can really hit rock bottom

Apartment REITs are a good idea in a market where people are reluctant to buy houses and are

willing to shell out the money for rent. However, with unemployment at an all time high, it's

believed that a number of people are choosing to double up. This will result in fall of the demand

for rental property. If the demand for rental properties falls, rent will fall and the investor's

returns in the form of dividends will also fall. Thus, apartment real estate investment trusts are

Ideal for people who have an appetite for risk.

In the current scenario, investing in the stock market may not be advisable. In a bull market,

people who have an appetite for risk, can invest in the stock market and consider options trading.

For additional information, one may refer to articles on stock investing and options trading

Commodity trading is preferred when the stock market is not going great guns. This is because

the correlation between the stock and the commodities market is negative. However, in the recent

months, there has been a sharp increase in the correlation between the commodity and stock


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markets. Nevertheless, the claim that commodities do well in times of inflation cannot be

disputed. Hence, people who have an appetite for risk should invest in commodities.

Gold is one of the best investment options when the US dollar is weak. For instance, on Nov 9,

when the US dollar was at its 15-month low, gold prices surged from $1,108.40 to $1,123.40

Assuming that this trend will continue till the US economy is on a firm footing, investors are

encouraged to invest in Gold ETFs (exchange traded funds). Since these are relatively safe, even

investors who are risk averse can dabble in Gold ETFs.

By Aparna iyer

http://www.buzzle.com/articles/best -investment-options.html


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15)Best investments for 2010

What are the best investments for 2010? Is this question leaving you clueless ?If yes, then go

through some of the fine 2010 investment strategies mentioned in this article

These days, many investors are totally confused as of where to invest their hard earned money,

so that they get good returns on their investments. Most of the investors fear about losing their

money in risky investment options due to the lack of correct signal of the recovery, after the

recent recession. Though the signs of a financial recovery are visible, many experts of the

financial markets feel that the pace of the recovery could be much slow and it would take time

for the economies of various nations to achieve the strong growth rate which they recorded few

years ago. So, the investments for 2010 should be done in diversified sectors to protect your

money and gain decent profits. Given below are the strategies for best investments for 2010.

Good Investment Options for 2010--

Investments for 2010:

Mutual funds-

Mutual funds can be one of the best investments for 2010 if you invest in those mutual funds

which have a good track record of giving good returns to the investors. Mutual funds are the best

investments for those who are not comfortable with the stock market investments. Again, like

stocks, diversified mutual funds can earn a good annual return. You should read the terms and

conditions of the mutual funds before making any kind of investment. More on:

y Mutual Funds Investment Advice

y How do Mutual Funds Work

Bank deposits-

Bank deposits are the best investments for 2010 and also for the years to come, as you do not

have to spend sleepless nights thinking whether your money is safe or not. You will keep getting

the stipulated returns in the form of interest, in this form of investment. Fixed deposits and

provident funds are known to give good returns to the investors. More on:


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y Best Investments During Inflation

y Best Short Term Investments

y Best Ways To Invest Money

The above mentioned investment ways can be the best investments for 2010, if you invest at the

right time. Best of luck!

By-chalie

Published: 1/28/2010

http://www.buzzle.com/articles/best -investments-for-2010.html


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16) safe investments-how safe is your money?

After working hard to build a nest egg for retirement, you want to know that your investments

provide a good return but remain safe. Although well managed stocks, mutual funds, an

corporate bonds can provide superior returns, risk goes hand in hand with reward. Your principa

and earnings are not guaranteed and can be dramatically affected by a down turn. As people near

retirement, it makes sense to move investments into fixed income products such as Treasuries,

Government agency bonds or certificates of deposits.

Treasury bills, notes, and bonds.

.

The only difference in the above is the length of the term. T-Bills are offered with a term length

of 1-year or less. T-Notes are offered with a term length of 1-year to 10-years. Finally, T-Bonds

are offered with term lengths greater than 10-years. We will collectively call these Treasuries

Treasuries are issued by the Federal Government and you are basically loaning them your funds

for which they guarantee to pay you a certain interest rate. They are guaranteed by the 'full faith

and credit' of the United States Government. You will always get your principal back at maturity

Treasuries can also be purchased in large denominations. Their safety and ease comes with arelatively low rate of return. They can also be bought and sold in the secondary market.

Treasuries are a safe investment, but as with any of these fixed income investments, they do

carry the risk that interest rates and/or inflation will rise during the term, thus eroding their

spending power. Treasuries are exempt from state and local taxes.

Government agency bonds

Government Agency Bonds are issued by agencies of the Federal Government and with the

exception of the GNMA (Ginnie Mae - Government National Mortgage Association) they are

NOT backed by the 'full faith and credit' of the government. As far as safe investments go

GABs are considered next in safety to Treasuries and Certificates of Deposit. GABs carry a

AAA rating, but because they aren't backed like Treasuries and there can be a prepayment or call

risk, they offer superior rates to Treasuries. A prepayment risk comes into play if the underlying


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loans that the security is backed by, pay off early and thus decreases the life of your bond. GABs

are usually offered with maturities from 2-years to 15-years, but have call periods where the

principal can be returned to you without having to pay further interest. This is a call risk. In a

falling rate cycle, your bond will most likely be called and your re-investment rate will be lower

than what it was. Many people find themselves having to buy long-term bonds to try to maintain

an attractive rate. In a rising rate cycle, your funds may go the life of the bond and miss out on

higher rates. Many GABs are exempt from state and local taxes. Government Agency bonds can

be purchased in large denominations and are considered a very safe investment.

Certificates of deposit (cd)-

Banks and credit Unions offer Certificates of Deposit for terms usually from 90-Days to 5-years

As long as the CD is offered by an FDIC insured bank or NCUA insured credit union, your

principal is guaranteed by the federal government up to $100,000 for a single account; $200,000

for a joint account; and $250,000 for an IRA. If you open a CD that compounds and open it for

less then the interest you will earn, the principal and interest would be guaranteed up to the

above amounts. Because, they carry no risk (as noted above), certificates of deposit are an

attractive and very safe investment. The interest from CDs is fully taxable. Most CDs are fixed

for the term you select, but there are banks that offer callable CDs and even CDs linked to

different market indices. Certificates of deposit generally offer yields that are better than

Treasuries and GABs, but you may want to do a tax analysis to see what the Tax Equivalent

Yield is. You can open Certificates of Deposit at multiple institutions and receive $100,000 of

FDIC insurance at each institution. Searching for multiple institutions can be time consuming.

Deposit brokers can assist you and save you time with this search.

Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the

best and highest CD rates nationwide. His clients include individuals, financial institutions

corporations, and public agencies. Visit us at www.jumbocdinvestments.com or our Certificate

of Deposit Rates page.

Author chris Duncan

http://www.buzzle.com/articles/safe -investments-money.html


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18)Fixed deposit: The best and secured way to save money

Though the economic position of all the countries is going on up and downs all over the world, the

banking system in India is so strong till now. As the encroachment of the credit crunch and raising

speculation are the main reasons of the present day financial crisis, people get fear to invest their

money in share market.

The businessmen in India have positive feeling regarding their financial position. As the economic

position of India is mostly based on the government organisations, the speculation and financial criss

have not shown much effect on Indian economy. If you study the present economic position of India

you can come to a conclusion that investing in a stock market or mutual funds will make you to face

many problems. A lot of insecurity and confusions are faced by the investors, who want to invest in

their money in public or private sectors. In these situations, they are searching for the best alternatives

to save or invest their money.

Many of the economists in India say that going for fixed deposit is the right solution, when it

compared to all the other sources where you can invest your money. This is the best source to rescue

from the present liquidity crises.

The fixed deposit is nothing but an account that allows the people to deposit their money for a period

of some time. Depending on their convenience, people can choose the deposit period that say for a

minimum period of 15 days to 5 years and more than that. When the deposit period comes to an end,

the depositors will get high amount of interest on their deposited money. Depositing money in Indian

banks is safer than other sources as the all the banks in India are under the control of Reserve Bank of

India.

The main advantage of going for these deposits is that the depositors get high interest rates than the

saving bank account holders. They will get lump-sum of money at a time, after the completion of

maturity period of the deposit. Moreover, people do not get any insecure feeling on their deposits. The

fixed deposits have been playing a prominent role, since the banking system has been introduced in


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the Indian economy market. They are one of the beneficial saving methods. Some years ago, people

showed great interest for going long term deposits. But, now-a-days, due to the drastic changes tha

are occurred in the economic position of India, most of the investors want to go for short term fixed

deposits.

The interest rates of the fixed deposits vary from one bank to another bank. To extend their services

as well as to attract all segments of the investors, most of the banks in India offer many facilities to

their customers, who want to deposit money in their banks. One of the main facilities is that the over

draft facility which allows the depositors to draw money on the deposited amount, before the

completion of the maturity period of deposit. On the request of depositors, some of the banks can

transfer the interest amount on fixed money to the current or saving account of the depositor

The minimum fixed amount can range from RS. 100 to an unlimited amount. If any one wants to open

a fixed deposit account in a bank, he should inquire about the interest rates of all the banks. Some o

the websites over the Internet help you to find the best bank that offers high amount of interest rates .

Author: jolly



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19)Bank Term Deposit; What Purposes Does It Serve?

Bank term deposit is a monetary deposit at a financial institution that is held for a fixed term and

cannot be withdrawn until after the expiration of the term agreed upon by the parties usually the

financial institution and the customer. When the term or duration for which the deposit is held

expires, it can either be withdrawn or held for another additional term. In most cases, the longer

the term for which the deposit is held, the better the financial yield. Many banks offer term

deposits in Australia so investors have a wealth of choices on their hands

There are various types of bank term deposits. These include the revolving bank term deposit that

allows a financial institution to retain the monetary balance in the customer's current account at

the roll over date as specified by the customer. The financial institution will automatically transfe

any fund that is above the limit to the specified term deposit. The other type of term deposit is the

unchanging term deposit. The unchanging term deposit is where the amount that was deposited

remains unchanged throughout the period and the interest earned is credited to the principal sum a

every rollover. The other type of term deposit is capitalized term deposit that allows the deposit to

be increased by the interest that is accrued at every rollover.

A bank term deposit serves many purposes. Firstly, it allows a customer to have many option

available particularly in regard to currency denomination, deposit types and terms. The deposit

also allows a customer the option of changing the financial parameter of the deposit at every

rollover date of the rollover deposit. Secondly, a term deposit allows an investor to increase

investment earnings while at the same time offering the investor a better monetary return

compared to traditional commercial and retail savings accounts. The term deposit allows an

investor the option of selecting between fixed or variable interest rate thus maximizing the profits.

Thirdly, a bank term deposit gives an investor the flexible financial option of receiving interest payments either quarterly, annually, semi annually or upon maturity of the term agreed upo

between the financial institution and the customer. Fourthly, a term deposit also serves the purpose

of acting as collateral as it can be used by customers who intend to apply for a loan in any bank in

Australia. It also allows an investor the option of adding money to the deposit and reinvesting the


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amount for the future. In addition, a term deposit also allows an investor the option of

withdrawing part of the deposited funds and reinvesting the remaining funds.

The other purpose that the term deposit serves is that it gives an investor a chance to withdraw the

entire amount that was invested in the financial institution. A bank term deposit is useful as it

gives a customer the option of automatically transferring a fixed fund or above the limits amounts

from existing current accounts term deposits. In addition, a term deposit offers investmen

flexibility due to the various terms that are offered to the customer. Such terms range from

between one year and three years. The term deposit allows an investor the option of guaranteeing

financial returns for business savings with a wide range of choice of fixed terms

Mel writes about bank term deposit, credit union and other finance topics.

Author: Mel C

: http://www.articlealley.com/article_898412_19.html


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20) Genius Investment

Genious high yeild deposit account

Have you been looking for a high-yield deposit account with flexible terms of investment?

Genius HYDA combines one of the highest returns in the industry with the flexibility of your lo

bank account. Receive up to 25% per month and be able to withdraw capital or interest at any ti

Our funds are investing mainly in highly lucrative equities and bonds, focusing

emerging economies.As of 10th of June, 2009 we also offer the Genius High-Yield Dep

account. This new investment product offers interest yields comparable to our investment fu

with the flexibility of a deposit account sim

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