Readings: Chinese growth, Port cargo traffic, MF distribution
- Wall Street Journal: The China Growth Fantasy
Ask a professional economist how many provinces China has and you are likely to draw a blank stare. But ask him what the GDP growth of China has been and he’ll quickly be able to tell you that China has grown at a double-digit rate for 30 years and that at this rate China will overtake the U.S. by 2035 (or some other date). GDP-centrism is endemic, and often comes at the expense of deeper analysis.
Fixed asset investment, heavily controlled by the government, has risen to nearly 45% today, from a level of 30-35% during the 1980s. Much of the GDP growth since the mid-1990s has been a result of government-organized massive investment drives — in infrastructure, urban construction and urbanization.
November was the second consecutive month where the 12 major ports of India, which handle 70% of the country’s import-export traffic, saw their cargo traffic drop and missed their targets. The ports handled 42.55 million tonne in November, which was 5.1% less compared with the same month last year.
Even Jawaharlal Nehru Port (JNP), which handles 60% of the country’s container traffic, saw volumes drop 4.38% against the targeted traffic.
Iron ore still remains the worst hit, being the only cargo to see a 6.62% decline y-o-y due to lower demand from China.
- Economic Times: MFs offer extra fee, upfront pay to lure agents
Among a host of measures adopted, fund marketers are promising higher commission on schemes sold. In addition to the 2.25% as entry load and 0.5% trail commission, distributors are being offered 0.5% extra commission for every tax saver fund sold. Instead of annual commission, which was the case until some time ago, fund houses are now offering an upfront commission of 1% for selling gilt and income funds.
“The mandate for us now is to make a killing with tax-saver schemes. Though our commission on gilt and income funds are higher, it’ll be easier for us to sell ELSS. We’re advising debt schemes to rich investors only,” the distributor said.
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