Friday, November 28, 2008

After-thoughts of the Bombay terror attack

Finally, with God's grace and thanks to our brave soldiers and armymen/NSG, the battle with the terrorists is over and the commandos have taken complete control of the Taj hotel - the last bastion that the coward terrorists were holding fort. 

Now, a detailed recee and analysis would begin and details behind their operation and break-in would emerge. Some of my after-thoughts are as follows: 

Kudos and my salute to our brave officers, armymen and NSG officials for fighting and later overpowering the terrorists. Despite being poorly paid as compared to government employees and private sector yuppies, these people put our lives before their lives and bravely fought from the front. They have done a professional job. May the souls of the departed brave ones rest in peace and God give their loved ones the strength to cope with the loss. Their sacrifice will always be remembered. And may the injured soldiers get well soon. 

Kudos to also the brave hotel staff of the Taj and Oberoi for putting their patrons and guests' lives before theirs and even laying down their own lives in the process. Please read these stories (click the links above) to believe how brave and caring these hotel staff are. For instance, the Taj hotel staff arranged food for around 300 people even as they were all hiding. Even in such times, they did not forget their service standards and still insisted on looking aftr their guests. My heart goes out to all of them. They, alongwith our soldiers, are the kindest souls. May the souls of the departed brave ones rest in peace and God give their loved ones the strength to cope with the loss. 

The media was all over the place, but I watched Times Now. Very good coverage and great commentary especially from its chief anchor, Arnab Goswami. Its ground reporters Ms Mahrukh, Rahul Shivsankar and the other two whose names I do not remember, were also impressive. I switched on my otherwise favourite news channel, CNN-IBN for a moment, but as usual I found a panel discussion going on - I find a lot of those on IBN - with a local politician, I immediately got bored and switched back. Besides, I think I can take a break from Rajdeep Sardesai. If he screams on a regular day, how would he be in this situation.  

Having said that, I think the media ought to have been kept at arm's length from the sites. Every strategic movement of the commandos was beamed Live. When you give out such sensitive information during a hostage crisis and beamed Live all throughout the globe, not to mention Pakistan and neighbouring countries where the terrorist's coward masters would be hiding and most probably would be informing the terrorists about their positions, it could be disastrous. Freedom of speech and the right to information is one thing. But this should not come at the expense of national security.

Another mistake, I feel they committed, was to make public the number of terrorists who survived and was caught alive alongwith his name, on national TV. The authorities must never give out such sensitive information. In future, terrorists could put innocent lives in danger/take hostage to get this arrested terrorist, freed. The Indian authorities should have learnt a lesson from Kandahar highjack of Indian Airlines where we had to let go of three dreaded terrorists in return of the plane passengers. We cannot afford to let go of any of these terrorists that were / are caught.   

Home Minister, Shivraj Patil, must resign. Not only is he inept and inefficient, he also makes huge blunders. To disclose on national television, right in the middle of a deadly terrorist attack and hostage crisis, about more NSG commandos leaving for Bombay and the exact time of departure from Delhi, was absolutely foolish. What was he thinking? His wardrobe?

Our local politicians like Bal Thakerey and Raj Thakerey would do well to know that the NSG/army soldiers who saved Bombay from terrorists and put our lives before theirs and were more than willing to lay down their lives - some of them actually did - just so that we, the Thakereys and their cronies could sleep well in the night, were from all parts of India, including north India. One doesn't even know how many marathi manoos were amongst them, and frankly my dear, nobody cares. They are Indians and so are we all. They saved our lives and we are forever grateful to them. Lesson we hope the unruly elements would learn: People you disrepect and unnecessarily shun today, may come to your rescue tomorrow. Learn to be humble.  

And speaking of politicians, it was disgusting to see Narendra Modi, Gopinath Munde and others of their ilk coming to the blast sites (Oberoi and Nariman Bhavan, respectively) amidst tight security that we taxpayers pay for at the expense of the common man and giving speeches. Politicians have already destroyed our beautiful Bombay and India, we do not want them near the affected sites seeking political mileage when loved ones of affected people are tensed, grieving and going through a gut-wrenching wait. Their presence was completely unwarranted and in very bad taste.

The government should upgrade our security staff. It was painful to see (courtesy TV footage)  the ATS chief wearing, what looked like, a hastily and rag-type bullet proof vest and get ready in minutes to face the terrorists. Unfortunately, he lost his life and so did two of his colleagues. The armymen have to be adequately geared to protect themselves against sophisticated ammunition. Their salaries should also be made competitive. We can change our jobs to go to those that pay us higher. The armymen do not have any alternative employment source if they decide to leave for want of better pay. But still, they risk their lives so that we can sleep peacefully. Hence, its important for us to look after them well. 

Why our borders so unprotected? It's common known that infiltration from our immediate neighbouring countries is a reality. And our seas, so directly accessible from Pakistan, are most insecure. If terrorists could land up on Bombay shores straight from Pakistan, what were our coast guards doing? Despite explosives used in the Bombay serial blasts of March 1993 being brought in at Gujarat/Maharashtra shores so freely, the authorities sat tight and did nothing to increase border/coastline security.  

As heartening it was to see the general public to see on streets around the Nariman Bhavan personally congratulating the armymen/NSG personnel, such areas are better cordoned off from both the general public and the media. There was a sea of people there and it was totally choatic, much before the operation was officially called off. Infact bullets were fired and people were asked to move back, much later. 

And these final points.
One wonders how peaceful and united our country was before the Babri mosque demolition. And how the Indian social fabric has been cut to pieces, beyond repair, thereafter. Nobody knew what was Babri mosque and where was it. India would have been better-off without the knowledge of what and where it was. What do you get by degrading someone else's religion? What has come out of all this? Is this what our Indian culture is? The time has come for some serious introspection.

That we are proud of our Taj and Oberoi. That even through all this, our Taj and Oberoi towers will -and continue to -stand tall. That they will soon bounce back to normal as if nothing happened.  

I cannot, though, say the same thing about Bombay. It's spirit is shattered and contrary to what we always say 'the great Bombay spirit', this time the wound runs deep. It's eerie in a way to think that after 2-3 days, trains will run jam-packed, traffic will return, people will report back to offices and life will get back to normal. But this time, can we afford to move ahead as if nothing has happened? Should our lives get back to normal? Can we forget? Can we do something about it? 

Thursday, November 27, 2008

Will Indian Politicans Wake Up?

As the war on Bombay completes 24 hours right now (it's around 21.15 hrs right now as I write this), tension is mounting with every passing minute as numerous TV channels are claiming that the encounter and fierce engagement between the terrorists and the National Security Guards (NSG) heats up and hopefully nears to an end. The final assault, it seems, is moments away, as per the intense media coverage. This is not a terrorist attack. This is war. And as usual, it is the common man who is caught in the middle of it. Whether it is because of petty politicians that destroy and disrupt normal life by riots, violence and unnecessary politically-motivated bandhs or because of terrorist attacks, the common man is suffering once again. What are our politicians doing?  

They talk. They condemn the acts. Oppositions blame the present governments and demand resignations while governments tells us that the law will take its own course. What else? They talk about India Shining. They talk about India growing at eight percent and how such a growth has been achieved only by the initiatives taken by this particular party over the years. They talk about "protecting" local language, local culture and jobs for locals. Making the local language compulsory. 

They talk about reservations in prestigious educational institutions and at every place where merit should be given due considerations. They talk about threatening to burn Bombay if any of their leaders is arrested. They pose their ugly and grotesque selves in imposing postures in ugly posters and hoardings across cities pointing in some direction as if they are some tall leaders and are sort of leading the way or something. 

They are not concerned about people's security although they would have us believe otherwise. They are worried about their own security. Even after they order their cadres to run riots, they crave for 'Z'-Plus security. They crave for exemptions from all sorts of procedure, not only for them but also for their uncles, aunties, relatives, sons & daughters, and cronies. So much money is wasted on their security. They protest and agitate. They talk loudly. They make a lot of noise and create nuisance.  Infact, they ARE the nuisance. 

And if all the above is not enough, when it comes to the Pay commission and ensuring that the armed forces and our police are well looked after, they shudder and not give due respect to them. This is biggest irony of nine per cent growth. 

Professional terrorism

The way these terrorists have carried out their operation have done very professionally. A large group of youngsters armed with grenades, AK-47 and such artillery, that were brain-washed by their egg-headed terrorist masters in Islamic countries landed on Bombay shores in south Bombay right in the middle of a highly-densed fishermen village near Cuffe Parade. Then, they systematically dispersed in groups, reached thir targets at Cafe Leopold, Taj and Oberoi hotels. Such was their planning that after the group or bunch of terrorists did their killings at Victoria Station railway station, they allegedly went pass by Cama & Albless hospital (a women and children hospital), terrorised it and then moved towards Metro cinema and carried out random firing there, as per the numerous TV reports. Then, they also had the audacity to highjack a police van in front of everywhere and tried to escape. In the interim, they continued their shootings and also shot at the video-grapher of Times Now TV channel who was filming them.   

Meanwhile, it’s been 24 hours and such is the level of planning of these terrorists that the hostage crisis is still on! Reports around 21.30 hrs (27 Nov) say the death toll to 125. Around 1,000 have been reportedly been injured. No less than the military had to be called to deal with them; the Bombay police could not finish off this exercise. This act has been one of the most calibrated and well orchestrated terror attacks. Bombay has been attacked three times in the past eight years (the car bombs at Gateway of India and Jhaveri Bazaar in 2003, the serial train blasts in July 2006 and this latest one) in addition to the March 1993 serial bomb blasts around Bombay. Each time, the terrorists have targeted areas destined to have maximum impact and each time they have tasted success. 

We lost our brave soldiers. The Maharashtra Anti-Terrorism Squad (ATS) chief Hemant Karkare was shot dead, alongwith two of his closest aides, Additional Commissioner of Police Ashok Kamte and encounter specialist Vijay Salaskar in retaliatory firing incident near Cama Hospital. These bravehearts gone, it is our loss. May God bless their souls. 


The unfortunate truth is that our administration was not even half as prepared as the terrorists were, to tackle this situation. When the police couldn't’t much, eventually the NSG had to be brought in. 

Despite 24 hours passing by, we still haven’t been able to get things in control. Why isn’t our police capable of handling such situations and why was the NSG brought it? We have clearly not lessons from the past. Not only Bombay, but several India cities like Delhi, Ahmadabad, Surat, Bangalore, etc have been attacked. Still, these attacks are being carried out, regularly, across India. In the US, after the 9-11 attack, the authorities have successfully prevented any other attack. 

It seems that not much money is spent on upgrading the policing infrastructure. Even the pay commission hasn’t spent as much as it should have to the armed forces. The civil government employees get handsome hikes, but not enough is done for our armed forces. The nation clearly does not respect valor and bravery. Look at state of police housing headquarters in Bombay. The conditions, in which they and their families live, are pathetic. They do not get enough leave. And in such incidents, leave taken by policemen are cancelled and they are called back to duty. 

Not enough money is spent on improving our paramedics. Air ambulances are still many years away, and the injured are shifted to hospitals by road meandering the ever-increasing traffic! Lives are lost on the way to hospitals struggling through traffic. Look at the way the injured are excavated and taken on stretchers in a clumsy and chaotic fashion. Still, you have to give it for the spirit of Bombay public for coming to streets to help victims.   

The police force is not given enough freedom to act. The unfortunate truth is that they have to report to our Home ministers and defense ministers who themselves are not ex-army men unlike their counterparts in the western countries, and the government. If these people are not from armed forces or have not served the professional Indian army in their lifetime, how would they understand their plight? How could they do justice to them? 

Also, is enough being done to train our police force and also look after them? The Bombay police just don’t have to be trained to solve murder or looting cases, anymore. Terrorism is a well-established reality now in Bombay. Are our police and the havaldars patrolling the streets, equipped to handle trained and professional terrorists that are trained in combat and warfare? In western countries, the police force continuously patrol streets to suspect any suspicious movements and do not hesitate in approaching us, albeit politely if we cooperate.

Last note

Our governments are useless and legal system is inadequate to deal with terrorism. Neither have the governments been able to detect such activities in advance and prevent them, but they are also unable to counter them and bring people to justice. Repeated governments after governments have been unable to counter terrorism. When will our politicians wake up?  

Bombay under attack: hauled up at Sterling cinema

The on-going terrorist attack and hostage crisis that is still unravelling as I write this blog (9.00 am, 27-Nov-08) and began as early as about 20.30 hours on 26 Nov 08, are most unfortunate. From the targets that these terrorists have chosen, and the way they have sifted, sorted and picked out their hostage victims, it clearly seems that they were largely after foreign tourists. At any point in time, Coloba causeway (the area where Cafe Leopold is there and where the firing began) is full of foreign tourists, and so do hotels such as Taj and Oberoi. I had also heard that the Marriott was also attacked but I have no confirmed information. 

What baffles me is that how the terrorists managed to get inside Taj Hotel despite all the security there. Of late, the Taj had even stopped vehicles from entering its portico. Gun-trotting and imposing security guards and also sniffer dogs were deployed for round-the-clock security, in addition to screening passages and tools. Yet, the terrorists managed to get in and - as I am told - started to fire indiscriminately. Details would come in a day or two, but I guess our security and the country's intelligence ought to be much more tighter. Attacks after attacks are carried out by the terrorists throughout our country at their will and we have failed to prevent them. It's 9.15 am right now and more gun shots ("thud", as Times Now news channel says) are reported. 

Yesterday I was at the Sterling cinema alongwith three of my friends watching a movie that got over at about 22.00 hrs. Just as we were planing to leave the theatre and go home, news started trickling in about the firing incidents. Soon after confirmed news reports came about the firing episode at Victoria Terminus railway station - a stone's throw from the cinema complex - the management shut down shutters - they claim the Bombay police got in touch with them and ordered them to shut everything - cancelled all the remaining shows of the day and strongly urged and requested us to stay put. Some people who had come by their own cars still insisted to leave. So they took a chance and left through their other, more discreet, entrance. My friends and I stayed put. 

I was impressed by the staff and management of Sterling cinema. Senior people of the management came out, took rounds and answered and addressed our queries/concerns. They reassured us of safety whilst inside the facility and reassured us that they can stay back for as long as we wanted. We squatted around their staircase and their food court and waited patiently and very anxiously, as also worried, for more news. They gave us pillows and also tea early today morning. There is no public television there, so most of our news was conveyed to us by our friends, family and loved ones over our mobile phones. Then, much later, one of the TFT monitors got connected to the internet from where we got to see Live TV. That was our first exposure to TV news on these incidents and the images were horrifying. 

Finally, we left at 6.30 am early morning after spending the night at the theatre, went to Churchgate to catch a train back home. Fortunately, the western railway is working and trains are running. 

I pray that the souls of the departed rest in peace and their loved ones get God's blessings to get through this tragic moment. And I pray for those injured that they get well soon. 

Thursday, November 20, 2008


After suffering their worst month ever, the Indian MF industry sees consolidation. Is this just a start?

It came with a bang but went out in a whimper. Barely two years after setting up shop in India Lotus MF is acquired by Religare-Aegon mutual fund. Both MFs have signed the agreement and the deal now awaits the securities and exchange board of India’s (Sebi) clearance.

Desperate times

After suffering its worst month ever, Indian MFs saw massive erosion in their assets under management (AUM). Lotus MF was no different as it lost Rs 2,479 crore or 31 per cent of its corpus in October, down from Rs 7,937 crore a month ago. 

However, sources say, its sponsor Alexandra Fund Management - a subsidiary of Singapore’s Temasek Holdings, was keen to exit Lotus on account of the mayhem caused due to the global credit crisis and also the state of Lotus MF. Sabre Capital was the other partner in this joint venture. 

In reality, the MF has been jinxed right from its start. Even before it launched its first equity scheme, its ex-star fund manager Sandip Sabharwal was shown the door when news reports of his alleged involvement in the Ketan Parikh stock market scam, when he was a fund manager at SBI MF earlier, surfaced. Soon, another of its star manager – this time its ex-head of debt funds – Nandkumar Surti also quit. There was much heartburn amongst the disgruntled staff and loyalists of these two fund managers soon followed their way out. 

The MF never recovered from its initial debacle. And though Tridib Pathak eventually came on board as Sabharwal’s replacement, he couldn’t recreate the magic. None of its schemes have yet turned three years yet but their performances till date has been sober. Meanwhile Sabharwal has since joined JM Financial MF and was a key factor in resurrecting the MF! 

New equations

What has surprised the industry is the quickness in which this deal was struck. And although Religare Aegon did not comment on the price of the deal, news reports estimate about two per cent of Lotus’s AUM. As per the MF’s October-end corpus of Rs 5,458 crore, the deal works out to be approximately Rs 109 crore, considered to be the cheapest MF deal in recent times, especially in the wake of the recent acquisition of the erstwhile Standard Chartered MF by IDFC for a price of Rs 825 crore. Further, market sources also add that this deal has a clause wherein the Lotus’s sponsor would make good the loss (sources claim it to be around Rs 100 crore), if any, that arises from any possible defaults of any of Lotus’ underlying instruments. This further sweetens the deal for Religare Aegon.  

Another reason why the deal is rumoured to be so cheap is Lotus’ huge debt assets as compared to equities. The MF has yet not disclosed its complete October-end portfolio, but as per its September-end portfolio, only seven percent of its total AUM was in equities, the rest in debt and more than half of its AUM was in FMPs. Further, 32.55 per cent of its AUM was in liquid and liquid-plus schemes. Not only are Debt, especially FMP, schemes earn much lesser income than equities, liquid schemes also see very short-term investors and no sticky money. That apart, Lotus Asset Management Company has been incurring losses; Rs 21.95 crore loss after tax as on 31 March 2008 and Rs 32.26 crore loss after tax as on 31 March 2007. 

For Religare Aegon though, it seems to be a decent catch. Even before the MF has launched its first scheme (it got Sebi approval in September and has filed draft offer documents of a total of five schemes with Sebi for approval), Religare Aegon gets an instant access to 64 cities where Lotus MF already has a sales presence and its branches across 38 cities. Religare Aegon has also acquired Lotus’s fund management team but it remains to be seen how many of the team comes on board. 

This latest acquisition may not be a one-off case. Atleast three other MFs are rumoured to be put up on sale soon. One of these MFs, say market sources, is a new entrant that has already cut salaries of its employees across board by around 30 per cent!  

Monday, November 17, 2008

PR companies can be a nuisance

There was a time when dealing with public relation (PR) companies and their employees was a breeze. But these days, whenever a PR calls me, i shudder. With all due respect to a majority of them - and some of them with whom I am on good to very good terms - they have become a nuisance. As a journalist, I deal with several PR people every day. I am observing a disturbing trend. 

There are two things I hate about these PRs 

1) Spam emails: Turns out, SPAM emails are not just on erectile dysfunction, penile enlargement, improving sex quotient, taking a loan or taking charge of some wealth left behind for us by some Nigerian gentleman or lady. Even PRs send us spam emails these days. These PRs do not bother to check which journalist where tracks what. If they have a news item to be publicized, they just shamelessly send mass emailers to all, dry and sundry journalists across magazines, newspapers and TV news channels. Some of the spam PR emails - on topics that I do not deal with at all nor have a I ever dealt with nor have I ever shown any inclination to cover - are as follows

Name of the PR: Sampark
Topic: New Identity of SKS Micro Finance (with an SKS logo of 193 kb)
Date: 11 November 2008

Name of the PR: Sampark
Topic: Gitanjali Group announces the appointment of Mr.Dhiresh Sharma as Head Retail of Gitanjali Group
Date: 10 October 2008

Name of the PR: Sampark
Topic: FCB Ulka Press Release (WITH 14 attachments totalling the size of 3.11 MB!!!) 
Date: 10 October 2008

Name of the PR: Perfect Relations
Topic: Quarterly results of companies of sectors I have nothing to do with

One other journalist from Hanmer MS&L Communications (member of Publicis Groupe) also used to send me irritating and irrelevant emails but about whom I recently complained to a senior PR person in the same organisation and ensured the former gets a earful. So it's not right for me to repeat the name again here.

Note, that the above is a sample of a long list. 

2) Spam phone calls: Some PR people randomly call me up at regular intervals and ask me: "Are you doing any stories this issue?" or "Which stories are you working on at the moment?" I could not think of being asked a more irritating question. How could I not be working on any story. I can understand that they call to help me get in touch with industry officials for perspective, quote, etc. And I appreciate. But to pose this particular question is most irritating. 

If you are PR and reading this, please note:
  • Do not ask stupid questions. Of course journalists are working on stories since we are employed. We have to be, God-forbid, unemployed to be not doing any stories.
  • Also, avoid asking "Which stories are you working on?" No self-respecting journalist would want to share with you their story ideas. Ask in a way to offer liaison services rather than straightaway asking the topic of our story. You may not mean to leak our story ideas to our rivals, but it is still idiotic to ask on what we are working on. 
  • Understand from our point of view. If 5 PR people call us per day and ask us about our story, it could become very irritating. 
Some suggestions to PR people
  • Maintain a database on who (journalist) working where (name of the media firm) tracks what (beat, sectors, companies). Official email id, contact number and designation should be maintained. 
  • Ensure this database is available to all in the PR firm and shared by all. It is my gut-feel that newcomers in some PR firms could be goaded by their seniors to call up all journalists and build a database. This should be avoided, as all existing PR firms are expected to already have such an existing database ready for use. 
  • Send relevant emails only. Avoid sending spam emails
  • Regularly and actively track magazines and newspapers to record any change in mastheads
  • Seniors in PR firms must guide their juniors and make them aware of which journalist tracks what and what not, so that juniors are given an idea. 

Friday, November 14, 2008

Sipping chai at Tea centre

Bombay is more known for its coffee culture. Although India is more known for its tea than coffee, its urban crowd is more hooked onto coffee. Thanks largely to coffee chains like Barista and Cafe Coffee Day that have sprung at every nook and corner of major cities across India. But I am not much of a coffee person. I cannot distinguish one coffee from another and coffee served at most of these coffee shops are full of lather that kills all the fun. I hate Baristas and Cafe Coffee Days, they're boring and done to death with, it's noisy with people yapping, loud television and all. Though people, especially the younger crowd are crazy about them and coffee. 

I like my cup of tea. A simple, yet extremely potent drink that revitalises my spirits and makes me look forward for the day at breakfast, that extends a warm welcome to me in office at about 11ish when I am about to start my work in full swing and finally wakes me up after a dull, but hard-worked afternoon. Which is why I was pleasantly surprised and glad I visited Tea Centre, the newly-renovated restaurant specialising in Tea at Churchgate, Bombay. But as it turns out, Tea Centre is not just about Tea, it also has a great breakfast spread. I have many a memory of good breakfasts. 

Breakfast is my favourite meals of the day and I always look forward to it. I am more of an English breakfast person. I do not much like the south-Indian breakfast; the fare usually available on many nooks and corners of India. I don't quite relish idli sambhar, dosa, pohwa and the works. 

One of my best breakfasts were had as a child at Moti Mummys' (my first floor neighbour and my Godmother; Moti means big or elder in this context) every Sunday. They were always looked forward to. Every Sunday I would get up early, by about 8, have bath do my prayers, get dressed and rush down to her house. They are quite punctual so whenever I was late, they used to come up to my house to call me. They never used to like that, I could sense. I don't blame them. 

Crisp toasts, fresh out of their newly-purchased Teefal Toaster - which they still use and, knowing them, will continue to use it for the rest of their lives - with restrained and supervised doses of butter ("Kayezad, you mustn't eat so much better, you will get cholesterol") topped with generous portions of strawberry jam would be served. There was variety. Orange marmalade or peach jam was also served, sometimes. Moti Mummy is an expert chef and I wonder whether there is anything that she doesn't know to cook! She makes the world's best strawberry jam. It was her jam that used to up the level of her breakfast by a few notches. And if its not toast-butter-jam, it's waffles or muffins, fresh out of the oven, crisp and hot to be had. It was divine. 

The other breakfasts that I used to enjoy were at the various Irani cafes. Some years back, every Wednesday, I used to visit one Fire-Temple (other than the one in my area that I goto  daily) and then stop over at the cafe to have a quick breakfast. So if the temple happens to be at Dhobi Talao, then it would be either Bastani (my favourite), Kayani or Sassanian Boulangerie. If the temple is in Fort, then it would have to be Yazdani. Standard fare: Bun-maska (with generous portions of butter) and chai. Simple as that. Now, my routine is the same without the breakfast. Bastani shut shop (they are under some litigation, I hear), and there is nothing so special about the other three. 

New York has a very rich breakfast culture. There were deli(s) (restaurant in local lingo) at every nook and corner of Manhattan that served all meals, starting from breakfast, opening as early as 6 in the morning. Americans start their days early so we used to typically have our breakfasts at around 7 in the morning. Here, in Bombay, 7 is the earliest that I wake up. Americans are heavy eaters, so huge portions are served, everywhere. One pancake served here is the size of three pancakes that I had at Tea Centre and i will talk more of those later. Several sachets of honey and pancake syrups are served with it, you pour and smear them over your hot and fresh pancakes and manipulate them in a way that they cover the entire base of your pancakes. Like an expert who cooks pizza and who doesn't leave one inch of space on the pizza bread uncovered without toppings, you cover your pancake's base with syrup. I always had a sumptuous breakfast before I set off, because once you are out, its uncertain when you will have lunch, etc. Sometimes you don't have time and you don't want to go hungry for a long time when travelling. 

Anyways, coming back to Tea Centre. It has a vast menu and has hundreds of tea options from various corners of India. Tea is served in earthen pots - the kinds you get tea served in, when travelling by train in Northern India I am told. 

It has a lavish offering of breakfast and unlike the other South-Indian fares, they serve continental and American breakfast too. I am glad it does, because in this price range - and Tea Centre is most reasonably-priced - it is the only option where you can get English breakfast. I also noticed that it serves lunch and dinner, but I won't talk about it since there are enough options in the city that do that. So what did I have? Kulhad Masala chai ('Tea liquor and milk with select aromatic spices served country style') and pancakes (3 small-sized pancakes). Sanjay Santhanam, my friend from Canara Robeco mutual fund who I was catching up with, had walnut or some nutted muffins, though they looked and tasted more like mawa cakes. 

The ambiance is nice, though some old-timers claim that the previous ambiance was better. I wouldn't know that as this was my first trip there. Service is very slow though and this could improve. It took them forever to get us our bill. The place is clean and tables and chairs are neatly arranged. Table-cloths are changed every time a customer leaves. Each table has a bell, you ring to call the waiter. Very English type. Good value for money. I wish there are more of such breakfast options in the city. 

Thursday, November 13, 2008

...of politics and local sentiment

Events in Mumbai in the month of October 2008 brought about a lot of unwanted attention to this megapolis city. The MNS political party went on a rampage and attacked life and property in protest of the arrest of its leader RT. He was arrested for inciting his party workers to attack examination centres and drive out North Indian candidates (essentially from Bihar and Uttar Pradesh). RT has also strongly advocated that these north Indians get out of Mumbai as he feels they are snatching away jobs from locals, i.e. Maharashtrains or people who were born and brought up in Maharashtra and speak Marathi as their mother-tongue. But is there any rationale in what he is saying? And what about his methods?

Changing tracks
When RT broke away from the Shiv Sena in late 2005, I had hope. Although Shiv Sena had its violent history of which RT was very much a part of, here was a young and dynamic man who was humbled in his earlier party despite holding much promise. I felt at that time that, after setting up his own outfit, such a person would assume new responsibilities and bring about a change in Maharashtra by focusing on real issues like ensuring regular power supply, improving infrastructure (Mumbai's infrastructure has already crumbled, Poona's traffic has no discipline, etc) and ensuring regular water supply to the state's hinterlands. 

Unfortunately, it didn't take long for my hopes and expectations to come crashing down. Perhaps being unable to do anything constructive for the city and Maharashtra or perhaps being impatient and wanting quick results, it did not take very long for RT to resort to his uncle's tactics. In the 70s, while the uncle targeted South Indians and sought to drive them away from Mumbai, RT turned his attention to - and threw kitchen sink at - North Indians. Ever since February 2008, RT and his partymen have been consistently targeting taxi drivers in Mumbai (predominantly Biharis and UPites), vegetable vendors, construction workers, etc. His latest ire towards north indian candidates who came to Bombay to attend the Grade IV railway board examination landed him in so-called trouble when the pressure from various quarters, including the Centre, forced the Maharashtra State Government to arrest RT. 

A hidden message...
RT claims that 'outsiders' come to Mumbai and steal away our (locals) jobs. A majority of taxi drivers, washerman and such menial labour hail from north india. These people are ready to work at cheaper costs and the sheer drove of them who migrate to Mumbai (as also other cities; you would know if you have gone to Delhi, or even cities in Gujarat) is the reason why you see them everywhere around. 

Fundamentally, I do not see how we can stop people from moving from one part of the country to another. We may belong to several states, but we are all Indians, first & foremost. We may owe our upbringing to our local culture and our way of life has an alliance to our city and state, but we are all Indian citizens. It is illegal to ban people from moving from one state to another. 

But there are a few issues to this problem. Firstly, it seems to me that RT's stance is about the menial and class IV labour and not the middle and upper class migrants. He may have issues with elite north Indians like Amitabh and Jaya Bacchan (he wants them to be 'more' "grateful" to Mumbai, but doesn't necessarily want them to leave the city and go, or he wants them to atleast learn Marathi for instance), he's made it quite clear that he doesn't really want the north Indian labour class migrants to stay back in Bombay. Anyways, while much of the former live legitimately and pay income tax to the city, the latter don't pay income tax (IT), probably because they are daily wage earners and don't come in the IT bracket. But thier contribution to the city is less of monetary, and more of labour (we need both labour and money to grow, eventually). 

Bombay is bursting at its seams. Roughly its population is around 1.9 crore. Housing is a perennial problem. Lakhs of people enter Bombay daily in order to search for a livelihood. It's a fact that slums are growing everywhere. I have no issues with slums, per se, because at the end of the day even a 'slum' is somebody's home. But in a bid to woo votes, greedy politicians in the past have sought to regularise and legalise scores of illegal shanties that crop up. Illegal Bangladeshi migrants, I am told, are a reality in Bombay. 

People say Bombay's infrastructure is crumbling, I'd say it has already crumbled. Perennial traffic jams can be seen across Bombay and now whatever time you step out, you land up on the middle of a jam. There is encroachment everywhere on public places, wherever there is space. So whether we like it not, whether we want to admit or not, and whether we decide to act on it or not (but hopefully peacefully and constructively, not violently, if i may add), the problem of influx is very much here. It's happening, guys! 

At the same time, I have always wondered why the central government and also governments from the backward states like Bihar and UP aren't doing anything to further the development in these states. Look at the kind of political representation and clout that Bihar and UP have at the Centre. And then, look at the kind of progress these states make, compared to states like Maharashtra and Gujarat. 

Population in Bihar and UP is out of control. Laloo Prasad Yadav himself has nine children! What family planning can politicians like him teach to their citizenry, I wonder. Clearly, it's been known for decades that there is mass scale migration from these states to other prosperous states. But other than launching hundreds of long-distance trains that ferry people from here to the rest of India, what have these politicians done for the state? Have they created large-scale employment opportunities? Have they improved the standard of living? Ask any citizen to list out the states (barring those from the extreme east-India like Arunachal Pradesh, etc because of other issues like border security, connectivity, climate, etc) where he/she would like to settle and I bet Bihar and UP would not even figure on most of the lists. Even Kashmir would figure higher on the list, despite terrorism. And the less said about law & order in these states, the better. I think it's high time to ask the question: WHY?

....told wrongly
Having said that, we must realise that violence is not the way to bring about a change. Mercilessly beating tax drivers, smashing their taxis, who work hard all throughout the day and making a dent in their daily wage is not the right way. I really don't know why I see so few Maharashtrian taxi drivers than UPites and Biharis, and if for some reason the taxi union or such authorities discourage enrollments of Maharshtrian taxi drivers then they are the ones to be questioned, not the poor and innocent taxi driver. But if Maharashtrians are not interested in driving taxis, for instance, then who is to be blamed? 

All said and done, even if RT's point is right, his methods will eventually throw water over them. The only way that RT can bring  about a change is to focus on improving public utilities and doing something concrete to improve the quality of people. Respect is to be earned, not demanded. Look what happened to the right-wing political parties. Their anti-Muslim stance may have brought them to power once, but they were ousted in the subsequent elections. Not that the current government (both state and centre) are any better. Hence, change needs to be brought about by hard work. Populist statements and violence are short-cuts that will earn you cheap publicity in the short-term, but you will lose out in the long run. In between all this political brouhaha, what will happen to all those Maharashtrians who work and live in other states? Will RT go and protect them if out of this backlash, they are unnecessarily targeted? 

But this is not the worst thing happening in Bombay and Maharashtra right now. More dangerous than the actual act of violence is its tacit and subtle endorsement by either taking superficial or no action at all. How sad! 


Panic redemptions and tight money have resulted in liquid funds declaring losses for the first time in many years. But is there a way out? 

If you think that liquid funds are absolutely safe and protect your capital at all times, then think again. On 8 October, three liquid plus funds, Mirae Asset Liquid Plus (MALP), DSP Merrill Lynch Liquid Plus and Templeton India Ultra Short Bond funds gave one-day negative returns. MALP was the worst hit as it lost 0.40 per cent that day. While a day’s loss may not sound catastrophic in any other funds, in the case of liquid funds it grabs headlines because many large investors and companies park their surplus cash in these funds for a day or a week or a fortnight. To make matters worse, some schemes limited redemptions. On 15 October, ABN Amro MF limited redemptions on few of its fixed maturity plans (FMP) to Rs one lakh per folio. What went wrong?  

Bad assets…

After a series of media reports about the illiquidity of the underlying assets in which many liquid, liquid-plus and especially fixed maturity plans (FMP) had invested in and their questionable credit quality, large investors who were already facing tough times and a cash crunch began withdrawing money from these schemes. Soaring short-term bank fixed deposit (FD) rates did not help MFs, as these investors started pulling money out from these schemes and invest in bank FDs.

In this melee, not just the culprit FMPs but even those that had comparatively cleaner portfolios were also affected. As a result, many investors who withdrew from FMPs made a loss on their investments because they did not get the indicative yield they were told – albeit unofficially, as MFs are not allowed to assure returns - as they withdrew much before the scheme’s maturity. MFs arrive at indicative yields based on the assumption that investors will stay till maturity. But such yields go for a toss when MFs have to make a distress sale to generate cash to meet redemptions. Add to them the exit loads that most FMPs impose on pre-mature withdrawals, and investors who got out last month most likely made a loss.

Whilst Outlook Money was amongst the first ones to warn readers of such assets in which many FMPs had invested in (See, ‘Are Fixed Maturity Plans A Ticking Time Bomb’, 10 September 2008), the rot runs much deeper.  

In addition to investing in illiquid real-asset papers, many liquid and liquid-plus funds have also invested in instruments called pass-through certificates (PTC). These are essentially loans issued by banks to borrowers that are then bundled off as securities and sold off to buyers such as mutual funds. Assume a bank issues a five-year loan XZY at an interest rate of 10 per cent. Since it would take five years for this bank to recover the loan, it sells off this loan to, say, a mutual fund, at say, seven per cent. The bank would earn the spread (difference in interest rates) of three per cent (10 per cent – seven per cent). The MF would pay the lumpsum to the bank, who in-turn would get back the principal amount (that it had originally lent to XYZ company) upfront; interest payments that XYZ company would keep paying to the bank, in the meantime, would be forwarded (after deducting the spread) to the MF. 

PTCs can be quite toxic if the loan originator (XYZ company in the case, above) is a low-rated one. MF sources say that even if the original borrower is a top-rated company, there are no buyers these days in the markets for PTCs that MFs may want to sell, to raise cash to meet redemptions. On account of a slow economic growth and poor result forecasts, there seems to be a perception about the companies’ ability to repay loans. Hence, PTCs are pretty illiquid these days. 

As per the September-end portfolio of liquid and liquid-plus, some schemes have invested significant chunks in PTCs. There’s little transparency here, as in the absence of the regulator’s mandate, most MFs do not publish details of these PTCs. ICICI Prudential MF was the first, and till date the only MF, that publishes details of its PTC investments. Not just the PTCs, but some short-term funds, including FMPs, suffer from poor credit quality. The problem is compounded here since most FMPs do not disclose their portfolios regularly. 

Funds, especially liquid-plus funds (liquid-type funds that have a mark-to-market portfolio component of more than 10 per cent; their maturities are therefore higher than liquid funds) with longer maturities got hit too; it’s harder to find buyers for longer-dated securities when liquidity is tight. 

…Low liquidity
The problem of the rush on redemptions was compounded by the lack of liquidity in the system on account of several reasons that had resulted in banks also withdrawing their funds from liquid and liquid-plus funds earlier. The rush on redemptions compelled liquid funds to sell their most liquid assets at throw-away prices that resulted in their losses. Fund sources say that although Sebi allows MFs to borrow up to 20 per cent of their corpus from banks to meet redemption pressures, money wasn’t available.

Even fixed maturity plans (FMP) saw a rush on redemptions on the back of news reports of bad assets held by them. Although the October-end corpus figures are yet to be disclosed, market reports suggest that liquid and liquid-plus funds have already seen redemptions of around Rs 50,000 crore in October.

Regulatory help
On 14 October, the reserve bank of India (RBI) allowed MFs to take loans from banks to meet their redemption proceeds by directly pledging their certificate of deposits (CDs; these are one of the short-term and liquid instruments that debt funds invest in) for a period of 15 days. This was a reversal of an earlier RBI stand wherein banks were not allowed to grant loans against CDs and were also not allowed to buy-back their own CDs before maturity.

But this measure seems to have come a little late, because out of Rs 20,000 crore that’s been made available to funds, MFs have utilised only Rs 8,800 crore up till 24 October. “Since the panic redemptions had already landed up on MF’s doorstep before RBI came out with his rule, MFs had already sold most of the CDs by then”, says Ashish Nigam, Head-fixed income, Religare Aegon mutual fund. Later, on 18 October, Sebi eased the guidelines for valuing debt securities too.

What should you do?
Understand that even if liquid funds are less risky than other MF schemes, they still carry risk. No MF is risk-free. Though liquid funds are not volatile to the interest rate scenario because their assets are not marked-to-market (Sebi mandates only instruments more than six months maturity to be marked-to-market; liquid funds hold scrips with a less than six months maturity), they do turn volatile at times. Liquid funds have to mark-to-market their instruments when they sell them and then book a profit or a loss at that time. And if there’s a liquidity crunch or a huge redemption pressure - like the one we’ve seen so far in October – they could be forced to sell instruments at panic prices, resulting in a loss, even if the scrips being sold are of a good quality, like Mirae Liquid Funds’. Despite having a high-quality portfolio (highest credit rating, no PTCs and only CDs), Mirae schemes incurred losses.

MFs also have a clause in their offer documents to initiate stagger payments in case of panic redemptions and thereby its inability to generate enough cash to meet the redemptions. ABN Amro MF merely used this provision in its FMPs at the time of redeeming them.

Look at average maturity
But there are a few things that you could look at, such as the average maturity of your liquid funds. The lower the maturity, the safer is your fund, because scrips of lower maturity are easier to sell and are also less volatile, compared to those with higher maturity. Funds with lower maturities are conservative and give lesser returns than those with higher maturities, but in volatile times, their downside is limited.

Stick to larger liquid funds, preferably, with a corpus size of more than Rs 1,000 crore. Although panic redemptions in times like these hit almost all funds, the larger ones are comparatively less hit. Even a few large investors who withdraw from small-sized liquid funds can leave a much bigger impact.

Credit quality
Credit quality. Check out your liquid fund’s credit quality. Monthly portfolios of existing
schemes (if you are investing in liquid and liquid-plus schemes) are available on the MF’s website. Else, tell your broker to get you a monthly factsheet and have him take you through the portfolio’s credit quality if you are unable to decipher these details yourself.

Avoid schemes that have a large holding in assets below a AA or an equivalent credit rating (OLM’s threshold; see table 2) or in PTCs. “The lower your liquid funds’ portfolio quality, the harder it is for them to sell their scrips to fund redemptions”, adds Amit Trivedi, Proprietor, Karmayog Knowledge Academy, an MF training institute. If you are investing in FMPs, make sure you read the offer document. Some FMPs explicitly say in the offer documents that they will avoid low-rated scrips. Look out for any such portfolio credit-quality related statements in the offer document while choosing.

Stay invested in FMPs
Assuming you have already invested in an FMP belonging to a well-pedigreed fund house, do not panic. When FMPs give you an indicative yield you’re most likely to earn, they arrive at these calculations assuming that you’d stay invested till maturity. But when faced with panic redemptions, especially in times like these when buyers are few and far between, FMPs are forced to sell their scrips in a hurry and at throwaway prices. This negatively impacts your yield and you are most likely to incur a loss, especially since exit loads are levied for premature withdrawals.

For fresh investments, stick to well-pedigreed FMP and only if you are willing to stick around till maturity. Infact news reports indicate that Sebi is contemplating banning early withdrawals from FMPs. “Fixed income segment still remains attractive. But don’t get greedy and avoid going for FMPs that necessarily give higher indicative yields. Look at safety and consistent returns”, adds Nigam.

Saturday, November 1, 2008

Taking off from Detroit airport

This is a video that I had shot from my camera, from inside a Northwest Airlines' aircraft, whilst taking off from Detroit airport, on my way to Newark in May 2008.

Meher Mahino, Ava Mahino and Adar Mahino: The holy trinity of Zoroastrian calender

Zoroastrians- or better knows as Parsis and Iranis of India- have a separate calendar. We look at the English calendar of course, but we al...