Tuesday, May 20, 2008
Saturday, May 17, 2008
After a gap of around 25 years, I made my first out-of-country trip. And like last time, it's the USA this time around too. Getting a good deal on airfare was tough even though i started hunting a good 5 months prior to departure date. But then I heard, I should have started 8 months back! So anyways, it Jet Airways finally. The only downside: I had to fly to Newark and then i had to change flights and airlines to go to Detroit - my final destination and base whilst in US.
The flight was damm good and on time. Overall, Jet Airways's experience was very good and the leg room was also quite good, better than we had expected. The food was very good, and we relished the various delicacies that they served us. Choice of Indian and Continental, vej and non-vej was given to us. Service was also good. But the flight was jam-packed and I heard was over-booked.
Brussels was a quick stop where we did not even realise how time flew. We were there for about two hours but the airport was so large that it took forever for us to disembark, go to the other end to embark the aircraft for Newark. Mom loved Brussels - the scenery we saw before landing was awesome, just like English country-side with beautiful homes amidst lush green fields. Mom immediately thought of buying a house there!!! The airport was also very beautiful and as expected sparkling clean.
We landed at Newark at around 11.30 local time amidst rains and gutsy winds. It was cold and the temperature outside was 14 degrees C. By God's grace, everything went of smoothly. Unlike in India, luggage carts are not free. But what I would find out later in the trip as being not-free would shock me, and you too when you come to that part. I paid $6 for 2 carts.
Customs and immigration was quick and we thereafter surrendered out bags to the officials to be shifted to our onward flight to Detroit. We took our that we took the sky train to go to Terminal C; we had arrived at Terminal B by Jet. One of the good things at the international airports is that they have trains to go from one terminal to another. The train at the Detroit Metro City Wayne airport is newer and looks more swanky. Anyways, it was a long walk from the station to Gate 85 where we boarded the flight. Gate 85 is right at the end of the Terminal C. We went through security checks; they made us remove our shoes too. Everything was very systematic though, so we didn't encounter any difficulty. Staff at both, Brussels and Newark airports, were very helpful and courteous. I've heard the JFK staff is very aggressive though. Continental flight arrived at Detroit at around 4.30 or so and since we had already gone through customs and immigration at Newark, we came out in a jiffy.
The new Detroit Metro Wayne City is fabulous. It too has a sky train, but only to go from one end of Terminal A to another. Terminals B and C do not have sky trains. With good signage everywhere, one doesn't have any difficulty in finding one's way. We walked from our terminal to Terminal A - and eventually to baggage claim - in an underground passage that took us from beneath the taxiway and aircraft parking bays. It's a long walk, but time flies by quickly especially when you keep admiring the beautiful underground passage whose walls change colours like a fountain whose lights change colours. Rusimama's car is so large that all our 4 suitcases and hand baggage got neatly tucked away in his car trunk at the back. I won't be surprised if in addition to all of that, I too would fit in! After a sumptuous dhan-daal and fish patia (Villoo mami's fabulous cooking magic had just started and there was much, much more to come) and a glass of white wine, I could barely keep my eyes open; yet it was around 9.30 by then.
Saturday, May 10, 2008
It's quite sad that these people who were born and brought up in India - their motherland - should speak of their home country in such degrading manner. After spending around 20 years of their lives here, after just two months into their stint abroad, they start liking everything and anything about foreign countries. Suddenly, they find all the world's faults in India only.
The worse part is that they equate settling abroad with success. In other words, they think if you want to achieve true success, go to USA and settle there! This is one of the most ridiculous philosophies. Didn't prominent Indians like the Tatas, Birlas, Ambanis achieved success despite living and worked in India? Are they all mad? With all due respect, there are many Indians who have settled in US and drive taxis or work at gas stations. That's hardly success, but nevertheless a job is a job. Somebody's got to to do it, and I respect that. But to term going to US with being successful in life, is ridiculous. You can be as successful in India as you can be anywhere in the world.
True, the quality of life in some of the developed nations is much better than in India. Here, you cannot get most of the things done without greasing people's palms. Infrastructure has crumbled and discipline is beyond repair now. But at least people working for the Indian economy do not feel that with their money, their government goes about attacking other nations and being a world bully.
No nation is a perfect nation. Every country has its positives and negatives, including the developed and developing ones. It's how you lead your life and what you do, matters. Now whether you sit in India and do that or even Somalia or choose to settle in some of the affluent nations, it doesn't really matter. How clean your surroundings are does not tell a person's character and true worth. Indian students wanting to go abroad and thinking of settling there should remember this.
Even people studying in prestigious institutions like IIT dream of settling abroad. Here in India, education is still a privilege. As per my estimates, at least 80 per cent of India's population must be illiterate or could not afford education. Affluent urbanites that get quality education do not want to put their education to use in India - and therefore return something back to society - but are more interested in settling abroad. My solution: Cancel the Indian citizenships of students that work abroad for more than five years and choose not to return to India, thereafter. I doubt whether this is feasible, but if they don't want their motherland, the motherland shouldn't want them, too.
Friday, May 9, 2008
How often have you stared at a gleaming skyscraper in a tony address in your town and wished you could afford to buy a house there? If you have ended up sighing wistfully and walking away, here's some good news. Now, you may easily be able to own a small portion of a very swanky address.
After years of deliberation and planning, the Securities and Exchange Board of India (Sebi) has approved the launch real estate mutual funds (Remf); it issued a detailed set of guidelines on 16 April. All you may now need to shell out is as low as Rs five to 10 thousand to participate in real estate investing.
How will it work?
A Remf is a scheme much like any other MF scheme (which invest in shares and bonds) but it will invest in real estate. The Sebi guidelines mandate that a Remf has to invest at least 35 per cent in completed real estate assets (read flats, row houses, bungalows, shops). These could be either residential or commercial properties, but must be finished and ready-to-use and not under construction. The Remf will get title deeds and will be owners of these premises – it’s like you buying a second home or a small office. In simple words, instead of reading a name like ‘Ms Shirin Batliwala’ against, say a first floor flat number on the name-plate board at your building’s entrance, you could now have a neighbour by the name of, say, ‘HDFC Real Estate Fund.
Your Remf will then rent out these properties and earn rental income that it will pass on to you – the unitholder. When your Remf’s tenure ends, it will sell off these properties and earn – and eventually pass - capital appreciation to you. With as low as Rs 5,000, you can now own a part of this flat through your Remf. Assume your Remf collects Rs 500 crore and invests Rs 200 crore out of it (40 per cent of the collections) in 40 flats costing Rs 5 crore each. If you have invested Rs 10,000 in this fund, then your share out of the appreciation and rental income of these flats would be 0.0002 per cent.
Over and above this, your Remf can invest in under-developed properties. But it can neither buy a barren land nor can it undertake construction activities. What then? It will partner with a real-estate developer and then take a stake in a special purpose vehicle (SPV), that the developer would have set up for constructing a particular project. Note, that your Remf will take a stake in that project and not in the developer company or its other projects across the country. Your Remf will buy unlisted shares in that SPV. Once the project is ready and complete, the gains arising out of it are your Remf’s to the extent to its stake.
Additionally, your Remf can also invest in debentures of real estate companies and mortgage-backed securities and equity shares of real estate companies listed on stock exchanges. All of the above must be at least 75 per cent of the scheme’s corpus. A Remf will be closed-end (this means limited tenure and no on-going sales of units) and units will be listed on the stock exchanges. You can trade units on the exchanges though, much likes shares.
Remf not the same as Reit
If you remember sometime back Sebi had issued a draft set of guidelines for Real Estate Investment Trusts (Reit) So what is the difference between a Reit and Remf?
A Reit is also an investment vehicle to invest in real estate. Like Remfs, these too are closed-end schemes and listed on the stock exchanges. But there’s a big technical difference between the two though. A Reit is mandated to distribute at least 90 per cent of the gains that it makes in a year, to its unitholders. Secondly, Reits can only invest in finished projects and not those that are under-construction. Hence it earns its major chunk from rental income. “While Reits help you to earn a regular income, Remfs give you capital appreciation”, adds Milind Barve, managing director, HDFC MF and head of the Amfi appointed sub-committee to recommend norms for Remfs.
Note that Sebi guidelines mandate a Remf to invest at least 35 per cent in completed and ready-to-use properties, it resembles a Reit to that extent and can infact invest this portion in a Reit.
Many countries across the world, especially the developed markets like US, have both Reits and Remfs running simultaneously. India is set to follow that path as Sebi has shown enough intent to allow both these products to be launched.
Of checks and balances
For a beginning, the Sebi Remf guidelines cover a lot of ground. They mandate that each real estate property is to be valued by two valuers - these must be rated by a credit rating agency - and the Remf will invest in that property at the lower of the two values. Each property will be valued once in 90 days. So if your Remf has invested in four properties, say in March, June, September and December, respectively, then each of those four properties will be valued once each of them completes 90 days.
However, your Remf will have to declare its net asset value daily. Your fund’s NAV will also change on a daily basis because apart from real estate assets, it would have also invested in marked-to-market securities such as debentures and mortgage-backed securities.
While your Remf will charge you an expense ratio of a maximum of 2.5 per cent, just like equity funds, the tax status is unclear. Sources say that Remfs will carry a tax status akin debt funds – long-term capital gains tax of 11.33 per cent, and short-term capital gains tax as per your income-tax rates. This compares well to investing in physical real estate directly, as there the long-term capital gains tax kicks in after three years as against a year in a Remf.
…but beware of risks
Although a Remf opens up a new asset class to investors that was otherwise restrictive, it comes with its set of risks.
The ‘others’: A Remf is mandated to invest at least 75 per cent of its corpus in real-estate securities. Beyond that it is free to invest in any security, related or unrelated to real-estate. It can either invest this 25 per cent corpus directly across equity market or debt instruments or can even sit on cash; Sebi has left it for Remfs to decide. How your Remf decides to invest this portion can have a bearing on its risk profile.
Flexible asset allocation: That’s not the only flexibility that Sebi has awarded to Remfs. Beyond the mandated 35 per cent in finished real-estate projects and within 75 per cent of the scheme’ corpus, it has about four different types of securities to choose from. Here’s where one Remf can significantly look and behave different from another.
For instance, a Remf can choose to hold 35 per cent in completed real-estate assets and hold the next 40 per cent in equity shares of real-estate companies and then hold the balance 25 per cent in another set of equity shares. Or a Remf can invest up to 50 per cent in completed real-estate assets and the rest in an SPV of an under-construction project. Such Remfs will be riskier compared to those that have a healthy dose of mortgage-backed securities and debentures of real-estate companies that earn a fixed interest income. Look up the Remf’s asset allocation before investing.
Mis-selling: The same agent through whom you invest in MFs will now also sell you Remfs. Only time will tell whether they will be able to tell the nuances of one Remf from another. And although Barve says that the MF industry is geared up to train the agents and spread awareness, it will take some time - and possibly some heart-burn - before investors realise the true worth and potential of Remf. Your only genuine hope currently will be your Remf’s offer document. And, of course, keep reading Outlook Money.
Apart from Sebi’s nomination of cities in which Remfs can invest their finished-projects’ composition and the taxation incidences on unitholders, most other things are in place. Hopefully, India’s first Remf should be born in another three months.
Friday, May 2, 2008
Fire-temples are quiet little places tucked away from the hustle and bustle of the street or locality on which they are located. There are around 52 fire-temples in Bombay. You'd be surprised to know that in most of them, no matter how noisy the locality is, once you enter the temple premises and the complex, it gets very quiet and the outside noise gets blanked out. Inside, you'll often see a couple of people here and there, mostly elderly, near the main Fire sanctum, praying diligently from their books and quietly. You could hear their soft hymns and muttering prayers, but thankfully no loud noises, shouting at the top of their voices or ferociously beating drums or ringing bells as if God is going to come down the very next moment and bless them only first!
Although conventional opinion says that mornings are the best time to pray since you start the day, fire temples do look very beautiful during and after sunset. Especially, the Udwada Pak Iranshah fire temple - Zoroastrianism’s highest order fire-temple situated in Udwada, Gujarat. Because in this temple, no electricity is allowed, the only light present inside the temple after hours are that of the Holy Fire from the sanctum and from lamp shades and chandeliers lit up not by electricity, but by lighted diyas. It's ironical because its darkness, yet there are good vibrations all around. Inside the main Fire room, you feel at times that you can't see, yet you feel guided. It looks very romantic. You'll notice a few priests -Parsees call them dasturs - praying quietly in some corners, while a few benches would be occupied by visitors. Most fire temples allow electricity though, but still evenings in agiaries bring about some nostalgia and great peace of mind.
I visit the Vatcha Gandhi agiary at Hughes Road almost on a daily basis. This is like my home agiary and one that's been there for many generations. This is also one of the few agiaries of the world where young priests undergo their practical training before they are formally inducted into priesthood. Around 3-4 times a year, the secondary prayer hall gets converted into a boarding school types as a bunch young priests camp for almost 10 days till their ceremonies take place.
The two big fire-temples on Princess Street (Anjuman and Wadiaji) are much bigger. I like going there, alternatively with also the Dadiseth and Banaji temples at Chira Bazar and Charni Road, respectively, on Wednesdays. Nothing special that day, but just like that. Earlier when the Bastani restaurant was open, I used to pop in there for a quick breakfast – they used to serve the best bun-maska and chai in town, now that honour goes to Sassanian Boulangerie, also near Metro cinema – every time I visited either of the two at Princess St. Now I have made my peace with Kayani Bakery, opposite to the erstwhile Bastani that has now shut shop because of some legal problems amongst its partners. Sassanian bakery also gets to see me sometimes and they serve very good bun muska.
I also used to go to Yasdani bakery once upon a time in Fort, but those buggers apply layers of butter in the bun that makes me run for my life, far far away from all that cholesterol. Irani cafes and restaurants are a dying breed, what a pity. The second or third generations chaps are interested in doing MBAs; they are not interested in continuing the restaurant heritage. By the way, if you had visited the Bastani when it was open, do you remember that long board of rules and regulations that said stuff like, ‘No smoking’, ‘No gambling’, ‘No fighting’, ‘No standing up on the chairs’, ‘No talking’, etc. That board, hung on a wall, was like a monument.
The Banaji Limji agiary, tucked away in a remote street in Fort, is the oldest fire-temple in Bombay. Like all fire-temples, this one too has a dome over and on top of the holy fire, but is the only one where you can actually climb upstairs - via a narrow staircase outside the building - to be able to see that dome. The chimneys are on top of such domes. Legend has it that this particular room inside of which the top of the dome falls in was once the home of the Fairy godmother in whose name and worship a lone sailor used to come here and light a lamp whenever his ship used to dock on the Bombay port. The Fairy godmother, it is said, was pleased by this gesture and granted him a wish. Till then, and up till now, the belief is that if you want something, you climb up to this sanctum and light a diya in the fairy's name and make a wish. Although my general past experiences have taught me to not only wish for possible things, but also that wishes granted comes after having made some respectable effort, I will never forget that day when I had wished here for a summer placement job after having tried desperately for over 2-3 months and have almost given up hope, and then went home only to get an interview call that same day. I started my summer project 2 days later!
Another favourite is the Navsari Atash Behram in Navsari, Gujarat. (picture to the left) The structure is most majestic with a large garden and the big entrance akin to a palace. The garden is not as well-kept as before, but it still holds a certain charm. I have spent almost all my childhood vacations here during my schooling as my grandparents used to live right next to it. Now the mohallas surrounding the Atash Behram, once full of Parsis whose earlier generations had come, settled and thrived there for generations, bear a deserted look. Locked houses in neglected and ruin-like state remind you of those that have migrated to Bombay and abroad for greener pastures. Now I feel lucky if I manage to go there once in even 2-3 years.
Anyways, my most favourite fire-temple in the world is the Panchgani’s Chowksi Agiary. This is one of the most serene temples I have ever visited. That it is situated in one of the most beautiful hill-stations and my favourite abode in the world – Panchgani – makes it all that more special. The place was spotless clean years back during one of its ex-dasturs regime, but is not as well-maintained these days. But still I love it. Surrounded by trees and lot of greenery and tall pine-like trees, you could just go and sit there for hours and you won’t get bored. (picture to the left) The highway is just outside, yet it sounds like its miles away – the sounds of buses and trucks passing by miraculously get blocked out. One of the best things about this structure are a row of stained glass that you can see in the picture next to this.
All Parsi fire temples must also have a well inside the complex. Many Parsis light a diya near the well as also inside the temple, itself. But Panchgani is full of monkeys, if you light and keep it on the periphery of the well and out in the open, they swoop down from tall trees and take away the diyas thinking its food.
Thursday, May 1, 2008
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