Archive for March 14, 2012

Story on Economic Data and how to interpret them


Interpreting ting macro-economic data: Three key pieces of economic data, their significance, and points to keep in mind while deriving conclusions from them

BY AMAR PANDIT, CEO – MY FINANCIAL ADVISOR

A savvy investor should be able to understand macro-economic developments. To do so, he must be able to interpret economic data, which signal changes in the economic environment. Remember that these developments affect the value of your portfolio. The stock market doesn’t just discount sentiments; it reflects macro-economic fundamentals too. Let us try to understand three pieces of data – the Wholesale Price Index (WPI), the Index of Industrial Production (IIP), and the Purchasing Managers’ Index (PMI) – that appear every month.

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Impact of budget on your personal finances

BY AMAR PANDIT, CEO – MY FINANCIAL ADVISOR

Intro: What the Finance Minister has given with one hand in the form of lower income tax burden, he has more than taken away by hiking indirect tax rates

In this budget the Finance Minister had to deal with the task of reining in a runaway fiscal deficit. So he has indulged in some jugglery. While he has offered some concessions to the salaried class on income tax, he has raised indirect taxes (both excise duty and service tax), which will have a cascading effect on the prices of a wide range of goods and services and adversely affect everyone’s wallet.

Income tax burden reduced

As is customary every year, the Finance Minister offered some tax concession to the salaried tax payer. He raised the minimum tax exemption limit from Rs 1.8 lakh to Rs 2 lakh. This will put an additional Rs 2,060 into every tax payer’s pocket. » Read more..

Our views on the expectations from the Budget and it’s impact on your personal finances.

 

 

The budget and your wallet: A look at how this year’s annual budget could affect your personal finances

Amar Pandit

This year’s budget comes against a difficult economic environment of high fiscal deficit (could come in anywhere between 5.6-6 per cent for FY12); high inflation for the past two years, which has shown signs of softening in 2012 but could spike again if crude oil prices remain high; slowing economic growth (third quarter GDP growth came in at a low 6.1 per cent); and problems in Europe that have been eased temporarily due to injection of liquidity by the European Central Bank (ECB) but have by no means been resolved. Let us turn to what is expected from the Finance Minister (FM) on March 16 and what impact his measures could have on your personal finances. In some cases, the impact of his actions will be direct, and in others, indirect.

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Rising Oil prices & impact on Economy & Stock Markets

Skidding on oil
By causing the price of crude oil to rise, the Iran-Israel standoff and ECB’s quantitative easing programme threaten India’s economic and stock market recovery in 2012
Amar Pandit
In 2011, the single-most important factor that caused economic growth to decelerate, foreign portfolio investments to shy away, and stock markets to nosedive was high inflation (weak global growth would rank a close second). At the beginning of 2012 the outlook had improved. Inflation is expected to soften this year due to a positive base effect and lower food prices. The central bank is expected to begin cutting rates. By encouraging consumption and investment, this should lead to a revival in corporate earnings and sustain the stock market rally (driven by strong portfolio inflows at the start of the year). The unfolding of this positive script is however now threatened by rising crude oil prices.

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