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The Samsung Group is a South Korea-based conglomerate company that makes everything from dishwashers to smartphones, has become one of the most powerful and recognizable names in tech.

A lot of people are even lumping Samsung together with Apple, Facebook, Microsoft, Amazon, and Google as one of the most important tech companies right now.

So how did Samsung get to where it is today?

We took a look at the company’s history, starting way back in 1938 when it was a company that exported dried fish to China.

1- In 1938, Lee Byung-Chull launched Samsung in South Korea as a grocery shop.

2- In 1940, due to tight competition in the grocery segment, Samsung abandoned grocery for producing and selling of noodles.

3- In 1950, Samsung abandoned production of noodles for producing of sugar.

4- In 1954, Samsung left sugar and started a woolen mill in Korea.

5- In 1956, Samsung abandoned woolen mill and started selling Insurance and securities.

6- In 1960, Samsung left selling of insurance and securities for production of television – the black and white television. Not color television.

7- In 1980, Samsung switched to telecoms, producing telephone switch boards.

8- In 1987, Lee the founder and owner of Samsung died. The company now broke into four independent companies- department stores, chemicals & logistics, paper/telecom and electronics.

9- Same year, Samsung decided to focus on international investing, investing in plants & semi conductor facilities around the world.

10- In 1990, Samsung delved into real estate abandoning international investing in semi conductors. Samsung built the worlds tallest buildings: Petronas Towers Malaysia, Taipei 101 in Taiwan

11- In 1993, there was heavy recession and Asian markets went belly up, Lee’s son who had succeeded him as the CEO of Samsung began downsizing, selling subsidiaries and merged the rest.

12- With the merging of the electronics, engineering and? chemicals division, Samsung became the worlds largest producer of memory chips.

13- In 1995, Samsung switched to liquid-crystal displays and over the next 10 years became the worlds largest manufacturer of flat screen television.

14- In 2010, with liquid crystal displays becoming competitive, Samsung launches a 10 year growth strategy, with smart phones being a key focus.

15- In 2016, Samsung is worlds largest mobile and smart phone maker, outselling iPhone two to one.

Samsung sales today is more than $250 billion and produces more than fifth of South Korea’s total exports.

Don’t be afraid of change. If you don’t change, you become insignificant. Don’t be afraid of delving into new waters. Don’t get stuck doing same thing over and over again, it’s boring. The life is in the risk. The life is in the new!!!! If your idea isn’t working or you are stagnant, don’t stick to the Glorious’ past, take the risk and move on. It’s far better than being stagnant!

Source:Livewire.com

New guidelines for unit-linked insurance plans (Ulips) and traditional life insurance policies will come into effect from February 1, 2020

The Insurance Regulatory and Development Authority of India, (IRDAI), has instructed insurers to make changes in Ulips and traditional life insurance policies. Some of these changes include: Time period within which a policy can be revived has been increased from two to three years; the sum assured for buying Ulips reduced from ten to seven times the premium paid; withdrawal limit of pension plans increased to 60 percent; surrender value norms revised to benefit policyholder; and standardised partial withdrawal limit, i.e., you can now partially withdraw thrice during the entire policy tenure.

Will these new rules benefit policyholders?
Here is a closer look at each of these changes and how they will impact a policyholder.

• Increase in time period allowed for policy revival
  According to the new guidelines, IRDAI has asked insurers to increase the time period allowed for the revival of life insurance policies. Santosh Agarwal, Chief Business Officer- Life Insurance, Policybazaar.com said that to comply with the ‘revival of policy’ provision, insurers have to increase the time period allowed for the revival of Ulips to three years from the date of the first unpaid premium. At present, you get 2 years to revive your policy. For non-linked insurance products, the time period allowed for the revival of policy will be five years.
  
  How it will impact you:“This is one of the best changes that has been introduced since it takes care of the insured’s interest and their financial conditions,” said Agarwal. For instance, if you have not been able to pay premiums and discontinued your life insurance policy because of financial exigency, you will now get an additional year to revive that discontinued policy.
  
  
• The sum assured for buying Ulips reduced from 10 times to 7 times the premiums paid
  From February 1, the terms and conditions of buying Ulips will become uniform across all age groups. From February 1, the minimum sum assured for buying Ulips for a policyholder below the age of 45 years will be reduced from ten times to seven times the annual premium paid.
  
  At present, only those above 45 years of age are eligible to buy Ulips with sum assured less than 10 times of annual premium.
  
  How it will impact you: A lower sum assured could result in better returns as lesser amount of mortality charges will get deducted. However, going for a lower sum assured, that is, less than 10 times of the annual premium paid will not help you avail tax benefits. Currently, you can avail tax benefit on policies which have a sum assured of 10 times the annual premium or more.
  
  Aalok Bhan, Director and CMO, Max Life Insurance said that to bring in greater convenience to policyholders, Ulips will be available with a risk cover equal to 105 percent of the total premiums paid (incase this amount is higher than sum assured and fund value) on the settlement period. “Additionally, you now have the option to reduce premiums up to 50 percent of the original annualised premium after the end of the five-year lock-in period, offering convenience to you (policyholder) if you are not able to pay up the larger premium due to any financial exigency,” he said.
  
  
• Pension plans to benefit the policyholder
  The insurer offering a mandatory guarantee on maturity proceeds on pension plans will now become optional.
  
  At present, insurers have to offer guarantees on maturity proceeds. This means that they have to invest in debt instruments to give guarantees on maturity proceeds, which in turn lowers the potential return on investment. This is one of the reasons why Ulip pension plans have lost relevance in the case of deferred annuity plans.
  
  A unit-linked deferred annuity insurance plan is an insurance contract where an insurer promises to pay the policyholder a regular income, or a lump sum, from a pre-decided future date. To fetch the benefit, the insured has to pay a sum (premium) at regular intervals till the annuity matures.
  
  Now as per the new rule, policyholders can decide whether they want assured returns.
  
  How it will impact you: The new rule allows the policyholder to opt for the possibility of earning a higher return on their investment by choosing the ‘no guarantee option’ and by asking the insurer to increase equity exposure in the policy. However, it is to be remembered that any equity investment comes with zero guarantee of returns or capital, therefore when one chooses the ‘no guarantee option’, there is no guarantee of the capital or returns.
  
  If you have a long-term financial goal, you can ask the insurer to invest a higher amount in equity and take the risk of ‘no guarantee’ to try to create a bigger retirement corpus.
  
  Apart from this, the new guidelines also give a policyholder the option to extend the accumulation period or deferment period within the same policy with the same terms and conditions up till the age of 60
  
  Bhan said, “Consumers can now look at building a larger corpus where they can now also initiate partial withdrawals only thrice during the entire policy term up to a maximum of 25 percent of the fund value, the partial withdrawal limit wasn’t fixed earlier by the regulator.”
  
  
• Withdrawal limit from pension plans increased to 60 percent
  To improve flexibility and liquidity for policyholders, insurers are now mandated to allow beneficiaries to withdraw a larger lump sum of 60 percent at vesting, surrender or death, as opposed to the current 33 percent. However, when you withdraw a lump sum from pension plans, only one-third of the corpus will remain tax-free (as is the case now), not the entire 60 percent.
  
  How it will impact you: Bhan said that the additional liquidity allows policyholders to withdraw the corpus from the pension fund for major life milestones, or even in case of treatment of critical illnesses. Further, at the time of policy maturity, policyholders can purchase an annuity from insurers other than from whom they have originally bought the pension plan. “Up to 50 percent of the corpus can be utilised to buy pension plans from insurers who guarantee better returns. This way, it will attract those customers  who were previously averse to purchasing retirement and pension products due to low lump sum withdrawals, as compared to other pension options,” Bhan said.
  
  
• Surrender value norms revised to benefit policyholders
  Surrender value norms are to become more favourable for policyholders. Surrender value is the amount you stand to get when you decide to make a premature exit from the plan, i.e. when you have decided to completely withdraw or terminate the policy before its maturity.
  
  How it will impact you: Agarwal said, “In the case of a traditional life insurance policy, if for some reason the policyholder plans to terminate his policy, one doesn’t have to wait three years for their policy to acquire a guaranteed surrender value, instead one can now terminate the policy after the second year. This means, if a policy is terminated after 2 years from its commencement, then a fixed sum of up to ’30 percent of the total premiums paid less any survival benefits already paid’ will be given to the policyholder. Similarly, you get ’35 percent of the total premiums paid less any survival benefits already paid’ if you surrender the policy after 3 years, and for the 4th to 7th year it will increase to 50 percent.”
  
  Further, if the policyholder surrenders the policy between the last two years before the policy matures, the regulator has asked the insurer to pay ’90 percent of the total premiums paid less any survival benefits already paid’ to the policyholder.

• Standardised partial withdrawal limit
  You can now partially withdraw thrice during the entire policy term up to a maximum of 25 percent of the fund value at the time of withdrawal, linked to defined life events. These life events include partial withdrawal for higher education, children’s marriage or critical illness (self and spouse) or buying or construction of a residential property. However, no partial withdrawal will be allowed in case of ‘Group Unit Linked insurance plans’.
  
  How it will impact you: Since the regulator has capped the partial withdrawal at thrice during the entire policy term, you will now be able to build more corpus for your retirement.
  
  However, Naval Goel, CEO, PolicyX.com said that policyholders should not forget that partial withdrawals have a bearing on the insurance cover in the base policy as well. Partial withdrawals are paid by cancelling the units on the day the insurer receives the withdrawal request. “However, if the request is received after 3 pm, then the net asset value (NAV) of the next working day is taken while cancelling the units,” he said.
  
  Source: economictimes.indiatimes.com

By doing away with amortization, liquid fund returns will be more volatile and other measures will bring down overall returns.

and debt securities for fund companies.

• Liquid funds will have to hold at least 20% in liquid assets such as cash, government securities, treasury bills and repo on government securities.
• The cap on sectoral limit of 25% has been reduced to 20%. The additional exposure of 15% to housing finance companies will have to be restructured to 10% and 5% exposure in securitized debt based on retail housing loan and affordable housing loan portfolios.
• The valuation of debt and money market instruments will now be entirely on mark-to-market basis. Valuation based on amortization has been done away with.
• Liquid and overnight funds will not be permitted to invest in short term deposits, debt and money market instruments having structured obligations or credit enhancements.
• A graded exit load will be levied on investors of liquid funds who exit the fund up to seven days.
• Mutual funds will be allowed to invest in only listed Non-convertible debentures (NCDs) and the same would be implemented in a phased manner. All fresh investments in commercial papers will have to be made only in listed commercial papers. SEBI will issue guidelines on this soon.
• All fresh investments in equity shares by mutual funds will only be in listed or to be listed shares.
• There will be a cap on instruments with credit enhancements of 10% at scheme level and 5% at a group level. Fund houses will have to keep adequate security cover of at least four times for investing in debt securities having credit enhancements backed by equities directly or indirectly.

Further, the circular said that in order to bring uniformity and consistency in valuation, various proposals on the waterfall approach for valuation of non-traded money market and debt securities by mutual funds were approved, along with acknowledging that valuation agencies may need a certain degree of flexibility in order to ensure fair pricing of securities.

SEBI said that fund companies are responsible for ensuring fairness of valuation and they can deviate from the valuation guidelines, subject to appropriate documentation and disclosure. In order to increase the robustness of valuation and address possible misuse, various proposals related to valuation of Inter-scheme Transfers (ISTs), disallowing the use of own trades for valuation etc., were also approved.

Fund houses will be given adequate time to transition to the new norms and suitable grandfathering will be provided wherever applicable.

Disclosure on Encumbrance Promoters of companies will be required to disclose detailed reasons for encumbrance whenever the combined encumbrance by the promoters and persons acting in concert (PACs) crosses 20% of the total share capital in the company or 50% of their shareholding in the company. The stock exchanges will maintain the details of such encumbrance along with purpose of encumbrance, on their websites.

Kaustubh Belapurkar, Director – Manager Research, Morningstar Investment Adviser India, shares his perspective.

Liquid fund norms
The regulator is looking to reduce liquidity risk in liquid funds by asking fund houses to invest at least 20% of the portfolio in cash and equivalents and also introduce a graded exit load up to 7 days, which will reduce lumpy inflows and outflows from liquid funds and also lessen their impact. Institutional investors will look to move into overnight funds for investments less than seven days. Increased cash holdings will result in lowering of overall portfolio yields.

As of May end, liquid funds on an average are holding 10% in liquid assets, rest is predominantly in CPs and CDs. A rough calculation shows that liquid funds may not be able to refinance Rs 25,000-35,000 crores worth of CPs due to this measure. This will further add to the ongoing liquidity stress in the NBFC/HFC sector.

SEBI is looking to reduce sector concentration risk by reducing sector caps. This will impact liquid fund investments in certain sectors like financials and they will need to reallocate to other sectors which could impact portfolio yields.

By doing away with amortization all together, liquid fund returns will be more volatile, while the above measures will bring down overall returns. But this will reduce the impact of liquid funds being prone to huge inflows and outflows at Net Asset Value (NAVs) which are not always reflective true portfolio values.

Investments in listed NCDs and shares
Funds in the past have invested in unlisted bonds. While we don’t know the exact quantum of exposure, these funds will need to bring down their exposure over a period of time. Listing of bonds has several guidelines, including the need to necessarily have a credit rating (there have been several instances of unrated issuances in mutual fund portfolios), increased disclosure and compliance.

Cap on instruments with credit enhancements
Mutual Funds have invested in bonds issues by entities with not so strong financials, basis the backing of a promoter entity, promoter guarantee, share collateral and other such credit enhancements. Such instruments potentially offer a higher yield. Given the new norms of limiting such instrument to 10% of portfolio and 5% at an issuer level, this move will improve the overall credit quality of portfolios. At the same time, it will also result in lowering of portfolio yields.

Cap on sectoral limit in Housing Finance Companies
There are five liquid funds, whose exposure to NBFC sector is greater than 20%, excess exposure is roughly around Rs 100 crs. There are ten funds with exposure in excess of 10% in HFC sector, excess exposure is roughly around Rs 1,100 crore.

Disclosure on Encumbrance
Given the experience with the Zee loan against share transaction, there were two important learnings : 1) The level of collateral was inadequate and 2) Given the quantum of promoter pledged shares, it would have resulted in a sharp drop in share price if all lenders were to invoke the pledge. Thus, the collateral only remained paper collateral. Several share pledges were informal and not reported under the promoter pledged shares, thus not giving a true picture of total promoter pledge. SEBI has put in place a stringent collateral cover of 4x to ensure there is adequate collateral when required. Additionally, it has bought all forms of pledges formal or otherwise to be reported under promoter pledged shares and also put in place a cap of 20% of total capital or 50% of promoter shareholding, which ensures the quantum of pledged shares are limited and pledges with adequate cover can be invoked as required.

Source:www.morningstar.in

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