Category Archives: Mini Blog

For the benefit of Senior Citizens and Good to Know for others

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Dear Friends,
There were constant complaints from Senior Citizens to RBI about the interest rate cuts that resulted in the lowering of Bank FD rates from over 9% to about 7%. Dr. Rajan explicitly mentioned this in one of his speeches and the famous “Dosa Economics” is linked to this ( 
In the Budget 2017, the government announced a scheme which will provide guaranteed returns to Senior Citizens for 10 years and the rate would be a fixed without any changes, thereby giving some solace. 
LIC of India was handed over this initiative and they have executed this (read the attachment). It is referred as single premium pension plan offering 8.3% on a annualized basis and 8% monthly. 
The plan has a 10 year lock-in and the pension will be taxed at the hands of investor. Currently Senior Citizen Savings Scheme(SCSS)  provides a better proposition with Investment of upto 15 lakhs, 5 Years lock-in at a interest rate of 8.4%. While the SCSS interest rates are variable in nature and linked to Government Security Yields (GSec), the probability of this rate going down further is limited.
So, the recommendation would be to exhaust the 15 Lakhs limit in SCSS before investing in this LIC Pension Scheme

<Blog # PenguWIN 1053 – For the benefit of Senior Citizens>

Finally, some good news to cheer

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Hello Friends,

           I started writing this blog early last week but had to delay it for more than a week. The reason is not the availability of time but wanted to ensure that the blog title should not be construed as an innuendo to the 2 weeks drama in Tamilnadu Politics.  Also, the kind of interest that people had in following this drama outside Tamilnadu and even in other countries would make anything else insipid.

I had mentioned in one of the earlier blogs that the outflow of money through Foreign Institutional Investors (FII) is countered by the inflow of Domestic Institutional Investors (DII), mainly retail investors. The flows from Retail investors has been increasing month on month as witnessed by the data provided by CAMS (Back office operating unit for major MFs) in the picture.

This can be interpreted in 2 ways:

  • Retail investors have started accepting the fact the equity investments are the best for long term wealth creation.
  • The returns from Physical assets like real estate, gold and financial assets like Bank FD have been dwindling and even providing negative results.


Whatever be the interpretation, Indian Investors have realized the importance of Equity investing. The proportion of investments or the Asset allocation is something that would vary based on age, risk appetite, risk capacity and so on. In the past, any pull-out by FIIs would result in a blood bath in Sensex and Nifty, even if it has nothing to do with our fundamentals. Now, the DIIs are able to counter the FII pull-out to a great extent as shown in the graph, which is one of the key reasons why our Indices were not majorly affected by Brexit or US Fed Rate Hike or Demonetization drive. All losses were recovered in a short period of time

The other concern that was prevalent was the run-up of Index values, not justified by the earnings of the companies, which was poor. Demonetization, resulted in reduction of consumer spending for certain sectors like FMCG, 2 wheelers, Consumer Durables and Telecom (more due to the Reliance Jio entry). After several quarters of mediocre earnings, the growth was expected to pick up in the Dec 2016 quarter. Unfortunately the demonetization drive overlapped with the earnings recovery season and the results were expected to be tepid.

However, if you go by the Q3 earnings released till date, the margins of companies have been expanding which is evident in the picture that shows the Q3 2015 performance Vs Q3 2016 performance. The recovery of commodities, energy sector and treasury gains helped to a large extent.           


<Blog # PenguWIN 1049 – Finally, some good news to cheer>