04 KALEIDOSCOPE
At a glance
HDFC reduces home loan rate
HDFC, one of the biggest players in the home loans
market, has cut housing loan rates. The new rates are
as below: 9.75 % for all loans up to Rs. 30 lakh rupees
and 10.75% for all loans above Rs. 30 lakh rupees. This
is a steep drop from the earlier rates of 10.25% and
11.25 % respectively.
30 per cent dividend
Franklin India Blue chip fund has announced a divi-
dend of 30% on its open ended diversified equity fund.
This would mean that for every unit of face value Rs.
10 you hold, you would get Rs. 3 added to your ac-
count.
The fund has shown better performance as com-
pared to the SENSEX. The record date for the dividend
is Jan 21, 2009. Meaning, you would get the additional
Rs. 3 only on the number of units you hold as of Jan 21.
New IPOs
Unfazed by the ongoing turmoil in the financial
markets four companies have filed their Red Herring
Prospectus with SEBI. They are Pradip Overseas, Sea
TV Network, Great Eastern Energy Corporation and
Texmo Pipes and Products.
Mini Quiz
1. When the RBI cuts the CRR rate, what is it talking
about?
a. Compulsory Return Rate
b. Currency Reduction Ration
c. Cash Reserve Ratio
d. Credit Rate of Reserve bank
2. IBN is the symbol for the ADR of which
company?
a. CNN IBN
b. IBM India
c. ICICI Bank
d. Indian Bank
Winners get a free monthly budgeting book. Send your
answers to finergo@goergo.in or SMS 92813 98889. For
example, if you choose A as the answer to question 1 and
B as the answer to question 2, type it as 1A2B and send
it.
Answers for last week’s quiz:
1. FMP stands for Fixed Maturity Plans
2. EPS stands for earnings per share
Ask a query
I have around 1000 shares of Satyam, which I
brought for around Rs. 226. I do not know what to do
as it is not even worth Rs. 24, 000.
Syed Jainulavudeen, Velachery
Any stock market investment has to be long-term
and has to be based on fundamentals. You need to do
your research in the business papers/magazines and
try to understand various factors like the new man-
agement, government response, the company’s cus-
tomer profile, etc. Once you are clear of these issues
and if you feel confident of a better future you can
decide your course. From a logical point, if the 24,000
is not of urgency now as you have lost close to Rs. 2
lakh already, just let it stay till you recover more.
(Queries related to personal finance can be sent to
finergo@goergo.in)
ERGO Monday, January 19, 2009
Dictating rules,
policies, standards…
PRADEEP YUVARAJ
Understanding corporate
T
he Satyam imbroglio has
been hogging the limelight
for the last fortnight on every governance and your money
newspaper, television chan-
nel and website worth its salt. We
are not going to discuss or analyse
the aftermath of the episode for
the company and its employees,
but rather look at ‘Corporate Go-
vernance’ and what it means to us
individuals and its effect on your
money.
Corporate governance literally
means how a corporate is go-
verned. That is: the set of rules,
processes, policies, ethics, stan-
dards, reports and internal laws by
which the day-to-day running of
any company are dictated. It is also
the link for the stake holders of a
company. They include individu-
als/organisations that are affected
directly or indirectly by the activ-
ities of the company, such as sha-
reholders, directors, employees,
customers, suppliers, lenders, go-
vernment and the general public.
Effect on our investments
As investors, most of our invest-
ments are directly or indirectly
channelled into the stock markets,
which is nothing but investing in
to various organisations. Depend-
ing on the visible and self-reported
activities of these organisations the
stake holders take multiple
decisions.
For example, a fund manager
might increase his investment ex-
posure, a supplier might extend
higher credit, a lender may lend
higher amount and potential em-
ployees would be willing to join
and so on.
If an organisation is transparent
and follows ethical corporate go-
vernance at all times, the stake hol-
ders can benefit from its growth.
But they could also hurt them-
selves if the company or its em-
ployees behave contrary to their
own set standards.
And each one of us is respon-
sible for maintaining corporate go-
vernance standards of the Corporate governance is all about following the rules,
organisation we are associated policies, customs and laws
with. ■