16th April

NPS delivers good returns

The article praises the NPS (New Pension Scheme) initiated by the central government for its employees and currently managed by three fund managers who have delivered god returns last fiscal 2008-09. 

Started for the central government employees who have joined after 1st January 2004, with some state governments as well joining it, the scheme has delivered good returns in all asset classes except gold. Currently it is managed by SBI, UTI and LIC who have delivered returns of 16.5%, 13.5% and 11.6% in 2008-09 respectively. Ultra-low management fees (0.01% compared to 2.25% industry-wide) and a mix of debt-equity coupled with default option that allocates contributions between debt and equity depending upon the age of the contributor, the fund is a good long-term savings option for individuals. It also reduces the risk to a great extent by investing only in Nifty50 stocks. However, there needs to be a stricter exit option to make it a true pension scheme and also to worry less about maintaining substantial cash holdings which would also improve returns. Currently the NPS returns are taxable which needs to be changed to make it inline with PFs. 

After ascertaining access of the scheme to others, proper marketing is also needed. This would also force its competitors to decrease their management fees as well as cost of funds. 

Tough year ahead for Infosys

The article projects that the coming year could be tough for Infosys as evident from the guidance provided by the IT major for the coming year as well as its recent annual results. However, outsourcing would continue to be robust despite economic slowdown and Obama’s tough stance on outsourcing.

Infosys projected that the dollar revenues could decline by 6.7-3.1% in 2010 while the rupee growth could be 1.7-5.7%. This clearly marks the recessionary trend in the US software industry, particularly outsourcing, it depends mainly on. With 60% of the top 135 clients cutting their IT budget by more then 10% and taking time as long as 15 months to decide on contracts coupled with sharp decline in pricing of services, it could lead to significant revenue losses for firms like Infosys. However, as the big shots of economic gang says that the worst time of economic slowdown is over and probably the global economy would revive by October 2009, there is a scope for Infosys to revise its outlook. This year marked 30% and 28.5% increase in revenue and profits in rupee terms for Infosys while 11.7% and 10.1% for the same in dollar terms. However, the company has done well not only to add the headcount but also the clients as 1772 employees and 37 new clients, 12 of which are from BFSI sector, join the company in one of the toughest Jan-Mar 2009 quarter.

The revival shown by the US banking sector in the first few month of January also signals the promising view of outsourcing in the times to come.

A shot in the arm

The article talks about the revival of Indian hockey that seems to have started owing to the team’s victory in the recent Azlan Shah Cup at Ipoh when they defeated the host Malaysia with a convincing margin.

The Indian Hockey seems to be coming back on track after its handling was taken away from Indian Hockey Federation owing to the corruption charges. After defeating New Zealand and then Pakistan, the Indian team went on to defeat the hosts Malaysia by a convincing margin in the finals. However, the litmus test would be when the team would clash with superpowers like Australia, Holland, Germany and Spain for which they would have to qualify into two major international events – Olympics and World Cup. India, for the first time in the history, didn’t qualify for the Olympics last time after losing to China, for the first time, in the 2006 Qatar Asian Games. Thus, India’s performance would be closely watched now in the 2010 World Cup to be held in Delhi. However, FIH has reservations about IHF not hosting the games. The team would also be under scanner in 2010 China Asian Games.

Nonetheless, many more things need to be done to bring about the Renaissance in the Indian Hockey.