Decoding the market volatility persisting in the market

The recent meltdown faced by the Chinese economy caused a ripple effect across the globe with market volatility hitting a new high. The impact on the rest of the world is hardly surprising given the fact that China contributes almost 14% to the world gross domestic product (GDP) and 50% to the world GDP growth.
But surprisingly, India has successfully managed to minimise inflation during these turbulent times and is finally inching towards a favourable growth trend. As the economy starts opening up, sectors like private banking and automobiles will have plenty of reasons to smile.

The Root of the Problem

The fear of market volatility has been haunting potential investors and subsequently causing a drop in market growth. Why exactly is the market in such a state of panic? Well, a couple of disconcerting elements have fallen together and pose a risk of fall in the value of investments like stocks, bonds and foreign currency. Here’s a breakdown of these causes:

  • Weak Chinese Economy- Undeniably, the biggest contributor to the current market condition is the poor state of the Chinese economy. The fall in demand for commodities from China led to a decline in the prices of the commodities. This made a greatly impacted the country’s economy and instilled doubts in the mind of investors about global growth and flight of capital.
  • US Federal Interest Rate Hike- Another reason for the recent market volatility is the anticipated hike in the interest rate by the US Federal Reserve. The actual impact of the hike can only be gauged when the rate is announced, but the mere expectation of an increase in the interest rate in the world’s largest economy, after a decade, has caused a frenzy amongst investors.
  • Foreign Institutional Investors- FIIs also have a part to play in the current condition of the Indian market. The FIIs have been constantly selling their investments due to pressure from global emerging market funds and this has caused a strain in the market.

What it means for the future

While the Indian economy hasn’t been too badly affected by the turbulent times, the market did take a hit due to the speculative nature of the issues at hand. While the earnings will remain subdued across the different sectors of the market, there are some segments like banking that will experience positive growth.
Also, with the ongoing Bihar elections coming to a close soon, the changes in the political landscape of the country will surely affect the overall functioning of the market. The Reserve Bank of India’s move to front load the interest rate cut will work in the favour of investors and give them more reason to invest.
The market volatility is well past its prime stage and the effects that remain will slowly fade away over the next few months.

Benefits of the RBI rate cut

RBI Governor Raghuram Rajan’s recent move to cut interest rates by 50 basis points was a boon in disguise for prospective home buyers. Following the move, almost all the banking institutions across the country have also introduced interest rate cuts on their loan offerings.

But there’s a catch! The older borrowers i.e., existing borrowers will get the full benefit of the rate cuts while new applicants will only get a marginal benefit of the move.

When the RBI unveiled its latest policy revision, major banks like SBI and ICICI also introduced revised rates and a new strategy to make it work for them. And if the move adopted by these two major banks manages to set the precedent, new home loan applicants will most likely be disappointed. What is this move? Find out.

Existing Borrowers are the Winners

As soon as the RBI introduced its latest policy review, SBI too slashed its base rate by 40 bps. But only the existing borrowers are expected to get the full benefit of the cut since the lending rate cut has been only 20 bps for new borrowers.

Interest Rate Spread Across Different Banks

Many banks, apart from the two mentioned, have cut their base rate, which is the lowest rate at which a bank can offer a loan, by about 30-35 bps. This is expected to have a major bearing on all their floating interest rate loans, home loans included.

The revision automatically brings down the interests for all the existing customers of the banks too. Here’s a simple example to give you a better idea of the situation. Before SBI decided to bring down the rates, they offered home loans at base rate (which was 9.7 percent) plus 5 basis points. This brought the effective interest rate to 9.75 percent.

Now let’s assume the latest rules followed by SBI (this brings the rate to 9.35%) and determine the EMIs on a loan worth Rs.30 lakh taken for 15 years. The EMI would be Rs.31,055 and a loanee would save Rs.1,30,518 on interests over the tenure of the loan.

On the other hand, ICICI bank has reduced the rate by 35 points to 9.35 percent and is offering a home loan with a spread of 20 bps over its base rate. Going by this, the current interest rate for existing customers reduced from 9.9% to 9.55%, and they save Rs.1,14,759 on interest payment.

New Borrowers are too Late

While the reduction in the rates is proving beneficial for existing customers, new borrowers aren’t as thrilled with the rates as they will have to be shelling out considerably higher amounts on paying interest. For instance, SBI increased their base rate by 25 points for their new customers.

This means that new borrowers will be paying 9.55% interest on their home loans. In other words, they are paying Rs.725 more every month than existing customers.

With ICICI home loans, new customers would be paying Rs.637 more than pre-existing borrowers for a loan amount of Rs.30 lakh.

To say the least, a few banks have already found a way to make the best out of the interest cuts, with more set to join the bandwagon over the coming months.

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Indian consumers are all set to spend more

Considering the current inflation rate, which stands at 5.14% as of September 2015, growth is on a recovery course as the government too has started investing on a number of infrastructure projects.

Keeping in mind these facts and the results of a recent survey, it can be said that consumer sentiments have been witnessing a steady upswing. As per a survey conducted on 3000 consumers across 11 cities by Zyfin Research, the government’s efforts have paid off with consumers slowly loosening their purse strings.

A report by Boston Consulting Group (BCG), a global management consultant company too has been testimony to this fact.

Here are some brief sector-by-sector statistics of the growth we’ve seen and will hopefully continue to see.

Consumer durables

The Indian Brand Equity Foundation (IBEF) data states that spendings on consumer durables have been steadily increasing over the last few years with a compound annual growth rate (CAGR) of 10.8% from FY03-12. While the consumer durable market was sized up at $6.3 billion in 2010, the sector is expected to double at 14.7 CAGR to $12.5 billion in FY15. This also proves that despite the slow growth over the last 2-3 years, spendings is only set to increase with the increasing demands of the middle-class group. The projected figures provided by BCG also claim that Indians’ spending on consumer durables is expected to grow four-fold, from $186 billion in 2010 to about $752 billion by 2020.

Automobiles

Society of Indian Automobile Manufacturers (SIAM) has said that production, sales, and exports of automobiles have risen in March-April 2015 as opposed to the same period last year. The industry manufactured over 23,366,246 vehicles this year, which included passenger vehicles, three-wheelers, commercial vehicles, and two-wheelers during these months in 2015 as against 21,500,165 in April-March 2014. This is an encouraging 8.68% growth over the last year.

Insurance

The insurance sector too has seen immense growth since FY02 with the CAGR remaining at 37.5% till FY15. The non-life insurance policies (which includes motor insurance) in particular have seen heavy growth with the market size set to increase to $160 billion over the coming years from the current $60 billion.

These are just a few statistics to prove that consumer spending is going to see better days in India. The RBI interest rate cut too will allow consumers to flex their money muscles over the coming months.

5 golden financial planning tips for a better tomorrow

You might have heard of the Great Depression of the 1930s or the financial crisis of 2007-08, for they are quite possibly the worst financial periods humanity has ever had to endure. What is even worse is the fact that there’s no telling when another market crash (quite similar to what China went through recently) may cause the stock prices to plummet, possibly leading to a global meltdown.

These are just a few instances that readily come to mind when you comprehend the volatility of the stock market. And this is also one of the major reasons why you should get started on your financial planning—to live a stress-free life ahead.

1. It’s Never too Early to Save

If you’re in your early adulthood and are starting off on your first ever employment, then this one’s for you. Start saving right now. Because the sooner you begin, the better equipped you will be to deal with the complications that might arise as you advance in life. With the price of healthcare and education steadily on the rise, you will certainly need a financial backing to keep you steady amidst turbulent times.

2. Get Your Priorities Straight

You might have dreamt about spending money on a lot of things when you were a child but once you’ve grown up, you’ll certainly come to understand why mindless spending can become the bane of your existence. This is why you must prioritise your expenditures. List out your financial goals and carefully strategise your spending in order to meet them.

3. Repay Your Debts

Debts, whether it’s from credit cards or any other sources, can play spoilsport to a healthy financial life. So, if you have a credit card, for instance, use it as a convenience rather than a way to entertain your whims and fancies. If you’ve acquired any credit card debt, make sure to pay them off as early as possible so that you can plan ahead for other important financial decisions in life.

4. Keep a Check on Your Expenses

Maintain a ledger, the old-fashioned way or download an app, whatever you deem fit. But make timely entries on all your spendings. This way, when you keep track of your expenses, you can determine your spending patterns and also cut down on any unnecessary expenses you might have been incurring over a period of time.

5. Plan Your Retirement

There’s nothing wrong with planning your retirement a little early. In fact, thousands of young adults around the world are doing exactly that to secure their post-retirement life. With inflation and market crashes on the rise, this move may well be a boon in disguise for you.

Whether it is market crashes or a global economic meltdown, as long as you follow these simple financial planning tips, a better financial future will be waiting for you on the horizon, a few years away.

Here’s All You Need to Know About OTG Ovens

An OTG is a device that combines the functionality of a traditional oven, a bread toaster, and a grill into a small but versatile package. It has been designed to provide all of these functions to your kitchen while taking up minimal space.

As you gear up for your shopping, learn how the little OTG can be the perfect little present for your loved ones! There are many places to buy an OTG oven—India has slowly but surely developed into one of the major OTG markets, and you can easily find a number of offers on OTGs.

otg-ovens-diwali-2

What is the OTG?

OTG stands for Oven, Toaster and Griller. It finds its roots in oven toasters, which were first used in 1938. This device can carry out the functions of a larger traditional oven, but without the cumbersome size, fuel problems, and uneven energy consumption. Due to its convection-based heating abilities, it can also double as a bread toaster. The grill function is a bonus feature that lets you use the OTG to broil and grill items, similar to grilling on a traditional charcoal grill.

What can it do?

As mentioned before, you can use the OTG to carry out three main functions: baking, toasting, and grilling. You can perform all these functions due to its working method, which involves the technique of convection, where heat is transmitted through the air.

How Does it Work?

The OTG is similar to a microwave oven, in that it’s a rectangular oven with a front-opening door. It has a thermostat, a set of heating coils, a removable wire rack, and a baking pan—it works by using these very parts.

First, you place the food item in the provided wire rack/baking pan as required. When you set a temperature on the thermostat, the electricity is converted to heat energy in the coils, much like a water heater or home radiator. This heat energy then moves through the air to heat the food item you placed inside.

There are minor variations in the method, depending on what you’re using the OTG for: for instance, when grilling food items, the OTG only makes use of the heating coils on one side.

So What can you Use it for?

The OTG is most commonly used for baking at home; you can bake a number of pastries, cupcakes, cakes and similar items using this device. An added functionality that has endeared it to a number of users is the ability to heat up small amounts of food. A handy little feature is your ability to reheat leftover food items directly after you’ve taken them out of your fridge. And bread toasting is yet another of the OTG’s impressive functions.

OTG vs Microwave

When compared to that of a microwave oven, prices of OTGs are much lower. Both of these devices run on electricity, and while the microwave oven works by causing molecules to collide, the OTG works on convection, i.e., the movement of heat through the air.

In terms of functionality, the microwave excels at heating various food items, and cooking water-based items such as rice and soupy noodles. An OTG, though, is best for bread and other baked items such as cookies, cakes, and even pizza. Heating bread and similar items is not advisable on a microwave as these can turn soggy.

The relatively smaller size of the OTG is the reason why you’d prefer to use it when working in confined spaces such as small home kitchens, and on caravans and the like.

Buying One

Irrespective of whether you’re buying OTGs or microwave ovens, best prices are generally available during sales at various retail outlets. As with most appliances, you can definitely get an OTG online in India; various retailers have special offers for the festive season. When buying an OTG, it is necessary to get a proper model that has a great set of features and specifications, such as the Bajaj OTG oven, which is available in a number of variants to suit your needs.

If you feel that the festival season is too much of a financial load, there’s no need to worry—a number of NBFCs, such as Bajaj Finserv, give you some room to breathe through a selection of great financial solutions such as personal loans and EMI offers on OTG ovens.

By making use of these, you can select a great deal when buying an OTG oven on EMI—Bajaj Finserv has a number of tenure options from 8 months to 24 months and using this EMI finance on an oven would be a great way to manage expenses.

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There’s only one way to celebrate Diwali: In ultra high definition

The festival of lights is more than just a day of pujas and fireworks. Diwali is considered to be an extremely auspicious day for buying something new. People often wait for Diwali to buy something special and add on to the festive spirit.

These days, television technology has reached new heights. At one point of time, flat screen TVs seemed to be a revolutionary milestone in the electronics industry. Today, manufacturers are pushing the limits of TV viewing with 4K Ultra-HD TVs. When you’ve got one of these sleek machines, watching your favourite movies and shows is an experience unlike any other.

What is 4K/UHD?

Ultra HD refers to resolutions of at least 3840×2160 pixels. In essence, this is literally a combination of two full HD screens in length and two in height, which is why this technology is sometimes called ‘quad HD.’ If you’re looking to buy a new television, there’s no better time to do it than this Diwali. Retailers all over the country are rolling out Diwali offers on 4K UHD TVs. NBFCs like Bajaj Finserv are also providing customers with convenient EMI Finance on 4K Ultra HD TVs through their Lifestyle Finance programs.

Making the Right Choice

Not sure which 4K UHD TV to buy? Here’s a list of the best UHD TVs in India available in the market right now.

  • Videocon 4K Ultra HD Smart TV
    With its futuristic design and touch-pad remote, the Videocon 4K Ultra HD TV is a cut above the rest. This visual powerhouse comes with a host of features, guaranteed to keep you engaged and entertained for hours. Couple this television with Videocon’s 3D Active glasses and you can make any movie or show as lifelike as possible. The TV comes with a built-in 2D to 3D converter which processes 2D images and adds depth to them before transmitting the final video to your 3D glasses.
    You can even set up user profiles that can be unlocked via face recognition using the TV’s camera for instant access to your favourite channels and personalised settings. There is even a sleep mode which is activated if the TV senses that you’ve left the room. Once you come back, the camera picks up your presence and resumes your session.menImg
    The Videocon UHD Smart TV also comes with gesture control technology and lets you play motion-sensing games with the help of a simple downloadable app. If you own a device that is WiFi compatible, you can wirelessly transmit your PC or laptop’s screen onto your television.
  • Samsung UHD 4K Flat Smart TV
    Very few televisions come close to the vivid colours and sharp contrasts that you can see on the new Samsung UHD 4K Smart TV. With their patented Colour Brilliance technology, you get to see shades and textures that are as close to the real thing as possible. The TV also comes with the Samsung UHD Picture Engine that takes images and video from any source and scales it up in real time to give you the same sharpness and clarity that you would get from a 4K source.

    smart-tv

    Whether it’s an old classic movie or a live recording, you can now experience it in ultra high-definition without having to buy additional hardware. Want to catch your favourite TV show but have emails to attend to? With the multi-link screen technology, you can Browse the internet and handle all your chores while you watch your favourite show or movie.

    Samsung’s Voice Interaction technology lets you replace the remote and control your TV with just your voice. And if you’re down with a sore throat, there’s no need to worry. With a range of simple hand and finger-based gestures, you can control your TV with ease. To back such a powerful system, Samsung has also embedded an equally powerful quad-core processor that keeps your TV running smooth without any glitches or lag.

    Perhaps the best thing about buying a Samsung TV this Diwali is the ground-breaking UHD Evolution Kit. With financial institutions like Bajaj Finserv you can buy a new 4K UHD TV on EMI, under one of the special Diwali offers on their Lifestyle Finance programs. With the Samsung Future Ready kit, you can upgrade your Samsung TV to make it compatible with upcoming UHD technologies. This device is designed based on broadcasting standards and Blu-Ray standardisation initiatives for the future.

  • LG 4K OLED Curved Smart TV
    Perhaps the most cutting-edge 4K technology on the market can be found in the LG 4K OLED Curved Smart TV. With a cross-section that’s as thin as your high-end smartphone, the subtle curve of the LG OLED TV gives you a wholesome and immersive viewing experience like no other.

    This slick television is loaded with a host of incredible features that will blow your mind. Using LGs Self-Lighting Pixel technology, each of the millions of pixels are controlled individually and are programmed to turn on and off on their own to give you the clearest whites and the blackest of blacks.
    menplus-3dtv
    The LG Ultra HD TV also boasts of phenomenal sound, thanks to the intelligent audio design by Harman Kardon. And with LG’s lightweight and battery-free 3D glasses you can transform your standard 2D movie or TV show into a dynamic 3D viewing experience while maintaining the clarity and sharpness of your 4K display. To top it all, the magic remote can be used to take over all your peripheral devices, allowing you to literally have your home entertainment system in the palm of your hand.

With these high-end 4K UHD TVs, your Diwali can become more vibrant and colourful than ever. In any case, a new television is one of the best surprises that you can give to your family. Financial institutions like Bajaj Finserv are offering great deals, especially if you’re looking to buy 4K Ultra HDTV on EMI. Just log on to the Bajaj Finserv website and avail the amazing Diwali Lifestyle Finance offers on UHD televisions.

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4 reasons why an Inverter AC is what you need to beat the Indian heat

The air conditioner with inverter is a relatively new entrant in the Indian AC market. However, you might not be aware of how big a leap this technology has made from traditional AC technology.

Let’s say you’re thinking of buying an AC; you’ll want to check and make sure that you’re making the right choice between these 2 options.

This holiday season, as you start considering your Diwali purchases, let us take a look at the inverter AC, its features, and how it compares to the traditional AC; India is a country where the inverter AC can put you at a true financial advantage—let’s take a look at how it does this.

What is an Inverter AC?

An Inverter AC is an air conditioner that can do everything a traditional AC can, but in a faster and more efficient way. This means that your electricity bills are reduced and that you can get your desired temperature much faster than when you use a traditional, non-inverter AC.

How Does it Work?

The AC is fitted with an inverter that, in simple words, tells the compressor to slow down and speed up instead of telling it to switch on and switch off. This means that the power-consuming stop/start cycles, which are typical of traditional air conditioners, are altogether avoided.

This simple-sounding technology significantly reduces the amount of electricity consumed, and indirectly, your electricity bill as well!

Now that you’re aware of the basic working idea, let’s take a look at how the inverter AC compares to the traditional AC.

  • Save Money
    The compressor on an inverter AC does not keep turning on and off— as you read earlier, it simply slows down and speeds up. This reduces the consumption of electricity, and with the alarming bills your traditional AC can cause, this is simply a factor you can’t ignore.
  • Effective Cooling
    Thanks to its technology, an inverter AC can actually cool your room considerably quicker than its traditional counterpart. Since a traditional AC compressor either works at full or zero power, it can cause overcooling, as well as small intervals of undercooling. The inverter AC keeps your room at your desired temperature, no more and no less!
  • Variable speed and tonnage
    The nature of the inverter AC means that it can vary not only its speed but also its tonnage. This can be explained through an illustration: let’s say you have two 1.5 ton ACs, on traditional and another an inverter AC. The inverter AC will run initially at 1.7tons, ensuring quick cooling; then, it will run at lower capacity, such as 1.5, 1 and even 0.3 tons. The traditional AC will run at 1.5 tons throughout.
    This translates to energy efficiency: you can save up to 40% of electricity using an inverter AC.

Cost Comparison: Traditional AC vs Inverter AC

This is what it essentially comes down to: is the inverter AC actually going to save you money when compared to the traditional AC? The answer is simple: even though initially, the split inverter AC price in India is relatively more than the traditional air conditioning cost in India, the former will help you save money in the long run, by cutting down on your electricity bills— as someone who has seen electricity bills from traditional air conditioners, you would probably agree!

As far as the initial costs of an inverter AC are concerned, there are a number of NBFCs such as Bajaj Finserv that have a number of plans that can help you fuel your purchase.

Buying an Inverter AC

Inverter ACs are available from all the top AC manufacturers in India, such as Blue Star, Daikin, and the likes. There are many convenient buying options. Buying an air conditioner online in India is a simple matter, with multiple e-retailers such as Flipkart helping you out here. It’s so simple that you can even order the relatively rarer portable AC online.

There are even various options to help you with the initial costs involved: NBFCs such as Bajaj Finserv offer great deals that can help you buy an air conditioner on EMI. Bajaj Finserv even offers you the ability to buy an air conditioner on EMI without a credit card, through their EMI Card option.

So, there you have it: if you want to choose the more effective AC option, you should go for the inverter AC. India is a country where this is the sensible option, because of our need for an AC effectively throughout the year.

This Diwali, make sure your festivities aren’t interrupted by sleepless nights due to those pesky electricity bills!

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OTG Microwave Owen

It’s Getting Hot in Here: OTG vs. Convection Oven

An oven is a must-have in any kitchen. Whether it’s baking cookies, preparing a cake, or roasting a nice piece of meat, an oven comes to your rescue every time. But the one question that everyone faces when they’re planning to buy an oven, is this, ‘Should I buy an OTG or should I go for a microwave convection oven?’

While OTGs are somewhat more reliable as a cooking apparatus, microwave convection ovens can be used to cook a variety of food and aren’t meant just for reheating or making instant noodles. Here’s a lowdown on the difference between an OTG and a microwave convection oven.

The Oven-Toaster-Griller

An OTG uses heating coils above and below to cook food. You have the option to either use both the coils (in case you are trying to bake something) or use just one (like only using the top coil if you want to roast) depending on the type of cooking you want to do. A thermostat helps control the temperature in an OTG allowing you to cook a large number of items with relative ease.

The few downsides of having an OTG is that it consumes a considerable amount of power and requires some extra manual labour in terms of prepping and usage. OTGs also take some time to heat up and cool down, which means that you might need to preheat your machine or wait for it to cool down if you’re planning to make multiple food items in one session. You can use glass, ceramic, silicone, and even metal, in an OTG.

The Microwave Convection Oven

As the name suggests, a microwave convection oven uses microwaves to cook or heat food. These waves cause water molecules in food to heat up, which in turn heat the food. Microwaves are a quick way to make food, especially if you don’t have a lot of time to cook a traditional meal. These devices are quite handy when it comes to small quantities and are quite cost-efficient as they use much less energy than a gas stove or an OTG.

However, microwaves can often leave food quite soggy or in some cases, extremely dry. This is mainly because the heating is done by the water molecules present in the food. Another thing with microwaves is that only a few kinds of materials can be used in microwaves. Most plastics work but some types of glass are susceptible to breakage or cracks. Metal is a strict no-no and can cause your microwave to bust a circuit or even explode.

What to Choose?

Deciding whether to pick up an OTG or a microwave oven isn’t a hard task. If you’re a cooking enthusiast and like cooking and baking authentic cakes and roasts, the OTG is your best bet. But if you’re an amateur and don’t have a lot of time to spend in the kitchen, the microwave convection oven should be your culinary weapon of choice. In fact, some of the best microwave convection ovens can do a fine job of baking cakes or roasting/cooking different kinds of food.

Looking to buy an oven this Diwali? You don’t even need to step out of your house. Just log on to the internet and buy a microwave and OTG online. With NBFCs like Bajaj Finserv, you can buy an OTG or a microwave on easy EMI Finance. With their Diwali Lifestyle Finance offers, buying your favorite products has never been this easy.

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