Crude slips

Prices remain somber as Hurricane Earl hits South 

Crude prices ended lower on Monday, 30 August 2010 at Nymex. Prices fell in tandem with US stocks ahead of the crucial job report, which is supposed to be coming up by the end of the week. 

On Monday, crude oil futures for light sweet crude for October delivery closed at $74.7/barrel (lower by $0.47 or 0.6%). Last week, crude ended higher by 1.8%. Weekly gains came after two weeks of consecutive losses. 

For the month of July, crude ended higher by 4.5%. Before this, in June, oil prices shed 2.7%. Crude ended second quarter of CY 2010 lower by 9.3%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 0.6%. 

Also weighing on energy futures was Hurricane Earl, which was upgraded to Category 3 on Monday, and was barreling down toward Puerto Rico. It could hit the eastern seaboard later this week. 

The Commerce Department in US reported on Monday, 30 August 2010 that savings rate for U.S. households fell in July to the lowest level in three months as spending outpaced income. Consumer spending rose 0.4% in July while personal income increased 0.2%. The savings rate fell to 5.9% from 6.2% in June, which had been the highest level in a year. 

Last Friday, Bernanke spoke at the annual Fed summer retreat in Wyoming. He said the government would resist deflation but didn't directly say whether the Fed would take new measures to combat the slower pace of the recovery. 

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies erased earlier losses and moved up marginally.

On Monday, reformulated gasoline for September delivery, the expiring contract, receded a penny, or 0.7%, to $1.93 a gallon. 

Also on Monday, natural gas for October delivery rose 2.9%, to $3.812 per million British thermal units after hovering at an 11-month low. Natural-gas futures lost nearly 11% last week. 

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for September delivery closed lower by Rs 29 (0.8%) at Rs 3,522/barrel. Natural gas for September delivery closed at Rs 183.1, higher by Rs 6.5 (3.7%).

FIIs resume buying

Inflow of Rs 272.70 crore on 30 August 2010 

Foreign institutional investors (FIIs) bought shares worth a net Rs 272.70 crore on Monday, 30 August 2010, as against an outflow of Rs 32.80 crore on Friday, 27 August 2010.

The net inflow of Rs 272.70 crore on 30 August 2010 was a result of gross purchases Rs 1417.20 crore and gross sales Rs 1144.60 crore. There was an inflow of Rs 263.70 crore into secondary equity markets which was a result of gross purchases Rs 1407.10 crore and gross sales Rs 1143.40 crore. The BSE Sensex rose 33.70 points or 0.19% to 18,032.11 on that day. 

There was an inflow of Rs 9 crore in the category 'primary market & others', which was a result of gross purchases Rs 10.20 crore and gross sales Rs 1.20 crore. 

FII inflow in August 2010 totaled Rs 11,687.50 crore (till 30 August 2010). FIIs had bought equities worth Rs 17,657.60 crore in July 2010. FII inflow in the calendar year 2010 totaled Rs 59,381.80 crore (till 30 August 2010). 

There are a total of 1,730 foreign funds registered with the Securities & Exchange Board of India (Sebi).

First quarter GDP at 8.8%

Low base boost growth rate 

First quarter GDP growth rate for a year 2010-11 has come at 8.8% compared with 8.6% last quarter. The numbers are higher then 6% in the first quarter 2009-10.

The lower base year has played vital role in 8.8% growth for the first quarter GDP growth.

Agriculture sector has recorded a growth of 2.8% compared to 0.7% (QoQ), manufacturing grew by 12.4% compared to 16.3% (QoQ) while mining sector growth was at 8.9% versus 14% (QoQ) and construction sector growth was at 7.5% compared to 8.7% (QoQ).

Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs. 9, 96,630 crore in Q1 of 2010-11 as against Rs. 7,88,013 crore in Q1 of 2009-10. At constant (2004-05) prices, the PFCE is estimated at Rs. 6, 61,123 crore in Q1 of 2010-11 as against Rs. 6, 58,856 crore in Q1 of 2009-10. In terms of GDP at market prices, the rates of PFCE at current and constant (2004-05) prices during Q1 of 2010-11 are estimated at 58.2 % and 58.0 %, respectively, as against the corresponding rates of 57.4 % and 59.9 %, respectively in Q1 of 2009-10.

Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs. 1, 95,316 crore in Q1 of 2010-11 as against Rs. 1, 58,390 crore in Q1 of 2009-10. At constant (2004-05) prices, the GFCE is estimated at Rs. 1, 25,425 crore in Q1 of 2010-11 as against Rs. 1, 26,171 crore in Q1 of 2009-10. In terms of GDP at market prices, the rates of GFCE at current and constant (2004-05) prices during Q1 of 2010-11 are estimated at 11.4 % and 11.0 %, respectively, as against the corresponding rates of 11.5 % in both the cases in Q1 of 2009-10. 

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs. 5, 09,729 crore in Q1 of 2010-11 as against Rs. 4, 29,232 crore in Q1 of 2009-10. At constant (2004-05) prices, the GFCF is estimated at Rs. 3, 55,452 crore in Q1 of 2010-11 as against Rs. 3, 42,912 crore in Q1 of 2009-10. In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during Q1 of 2010-11 are estimated at 29.8 % and 31.2 %, respectively, as against the corresponding rates of 31.3 % and 31.2 %, respectively in Q1 of 2009-10.

Weekly Scenario: Weak Global Sentiments Push Down Indian Equities

The weak global sentiments had pushed down the Indian equities during the week ended 27 August 2010. The fall was broad based and all sectoral indices, except consumer durables, closed the week on a negative note. Real estate stocks were the top losers. Sensex and Nifty were down 2.19% and 2.21% respectively at the end of the week. 

Yield on the 10 year benchmark bond increased 12 bps while those on the 5 year paper were up 5 bps. Yields on the 5 year corporate bonds were up 4bps and consequently spreads over gilts were largely unchanged 83 bps. Yields on the 1 year paper rose 8 bps. 

“Indian bond prices closed the week down as ongoing inflationary and supply concerns weighed on sentiment; Systemic liquidity improved and call rates fell below 5% levels; While maintaining that the domestic growth outlook remains robust, RBI mentioned that given the increased linkages with global economy, shielding domestic markets from impact of global developments poses certain challenges for policy management.” said Franklin Templeton Mutual Fund 

In the major equity fund category, NAV of Index Funds declined 2.15%, Tax Savings Funds by 1.61% and Equity Diversified Funds by 1.57% during the one week period 27 August 2010.

Banking Funds slipped 2.72%, Infotech Funds lost 1.78%, Pharma Funds declined 1.36% and FMCG Funds dropped 0.72% in the sector funds. 

Despite all the equity fund category witnessing fall, debt fund categories ended up as gainers. Among the sub categories in debt fund, Gilt – Medium & Long Term and Gilt – Short Term gained 0.17% each, followed by Income Funds (0.14%), Floating Rate Income Funds – Long Term (0.11%), Short Term Income Funds (0.10%), Floating Rate Income Funds – Short Term (0.10%), Liquid Funds (0.09%) and Ultra Short Term Funds (0.09%). In the ETF category, Other ETF's declined 1.93% while Gold ETF's gained 0.79%. 

Among the sub categories in the hybrid funds, NAV of Equity Arbitrage Funds surged 0.15%. On the other hand Equity Oriented Balanced Fund declined 1.10%, Debt Oriented Balanced Fund lost 0.38% and Monthly Income Plans slipped 0.17%. 

Equity Diversified Funds

 

NAV of Equity Diversified Funds category declined 1.57% in the week ended 27 August 2010. Most of the schemes ended up as losers during the week end period. Among the schemes in the equity diversified category, JM Mid Cap Fund gained the maximum of 0.82%, followed by SBI PSU Fund which climbed 0.67%. JM HI FI Fund and Reliance Infrastructure Fund were the worst performers in this category declining 5.33% and 3.15% respectively. 

Tax Savings Funds 

 

Tax savings Funds category declined 1.61% in the week ended 27 August 2010. All the schemes in this category ended up as losers. Bharti AXA Tax Advantage Fund and Bharti AXA Tax Advantage Fund - Eco were the highest losers in this category as they had declined by 3.04% and 3.03% respectively. Quantum Tax Savings Fund and HDFC Tax Saver Fund were able to limit their loss to 0.20% and 0.63% respectively. 

Index Funds

 

The Index Fund category declined 2.15%which is however worst than the previous week gain of 1.48%. All the schemes in this category ended the week as losers. Principal Index Fund and Canara Robeco Nifty Index were the biggest losers in this category. Their returns declined by 2.26% each over one week time period. Benchmark S&P CNX 500 Fund and HDFC Index Fund-Sensex Plus Plan were able to limit their loss to 1.72% and 1.76% respectively. 

Sector Funds

 

NAV of Pharma Funds category declined 1.36%, with Reliance Pharma Fund ending the week as the biggest loser with a fall in NAV by 2.01%; it was followed by UTI Pharma & Healthcare Fund which lost 1.83%. 

Banking Funds category declined 2.72%, with Religare Banking Fund and JM Financial Services Sector Fund declining heavily by 3.04% and 3.02% respectively. 

FMCG Funds category declined 0.72% over one week period ended 27 August 2010. ICICI Pru FMCG Fund was the highest loser in this category. It's NAV declined by 1.05% over one week period. 

Infotech Funds category declined 1.78% over one week period ended 27 August 2010. ICICI Pru Technology Fund was the highest loser which declined by 1.78%. 

Hybrid Funds

 

Benchmark Equity & Derivatives Opportunities was the only gainer in equity oriented balanced fund category as its NAV appreciated by 0.19%. Escorts Balanced Fund was the worst performers in this category declining by 2.20%. 

Canara Robeco InDiGo Fund was the highest gainer in debt oriented balanced fund category as its NAV appreciated by 0.33%. Sahara Classic Fund was the next highest gainer by 0.10%. LICMF Children's Fund and UTI Retirement Benefit Pension Plan were the worst performers in this category with a fall in return by 2.51% and 0.72% respectively. 

Debt Funds

 

Among the pure Debt funds, IDFC G Sec Fund - Investment Plan - A gained 0.59%, IDFC Dynamic Bond Fund - A added 0.57%, ICICI Pru Gilt Fund - Invest – PF Option rose 0.52% and IDFC G Sec Fund – PF climbed 0.50%. Axis Income Saver and DWS Gilt Fund were the worst performers in this category declining 0.22% and 0.07%% respectively.

Sahara MF Announces Dividend for its Banking and Financial Services Fund

Record date for dividend is 03 September 2010 

Sahara Mutual Fund has announced the declaration of dividend under dividend option of Sahara Banking & Financial Services Fund. The record date for dividend has been fixed as 03 September 2010. 

The quantum of dividend will be Rs 4.00 per unit on a face value of Rs 10 per unit. The NAV of the fund stands at Rs 19.3228 per unit as on 27 August 2010. 

Sahara Banking & Financial Services Fund is an open ended growth fund with an investment objective to provide long term capital appreciation through investment in equities and equity related securities of companies whose business comprises of Banking/Financial services either whole or in part.

DSP BlackRock MF Announces Dividend for its DSP BlackRock Top 100 Equity Fund

Record date for dividend is 03 September 2010 

DSP BlackRock Mutual Fund has announced the declaration of dividend under dividend option- regular plan for its DSP BlackRock Top 100 Equity Fund. The record date for dividend has been fixed as 03 September 2010. 

The quantum of dividend will be Rs 1.25 per unit on a face value of Rs 10 per unit. The NAV of the fund stands at Rs 21.796 per unit as on 27 August 2010. 

DSP BlackRock Top 100 Equity Fund is an open ended growth equity fund with an investment objective to seek long term capital appreciation from a portfolio that is substantially consituted of equity securities and equity related securities of the 100 largest corporates, by market capitalization, listed in India.

Tata MF Declares Dividend For Equity P/E Fund

Record date for dividend is 3 September 2010 

Tata Mutual Fund has announced 3 September 2010 as the record date for declaration of dividend on the face value of Rs 10 per unit under the Dividend Trigger Option A (5%) of Tata Equity P/E Fund. 

The quantum of dividend will be Rs 1.00 per unit as on the record date. The scheme recorded NAV of Rs 41.3720 per unit as on 26 August 2010. 

Tata Equity P/E Fund is an open ended equity fund, with an investment objective to provide reasonable & regular income alongwith possible capital appreciation to its unitholders.

Bharti AXA MF to Revise Exit Load Structure under 2 Schemes

With effect from 01 September 2010 

Bharti AXA Mutual Fund has decided to revise the exit load structure for Bharti AXA Equity Fund (Eco plan, Regular plan and Institutional Plan) and Bharti AXA Focused Infrastructure Fund. The changes will be effective from 01 September 2010. 

Accordingly, the exit load which is currently charged at 1% if redeemed within 1 year from the date of allotment will be revised to nil (including SIP / STP). 

Bharti AXA Equity Fund is an open ended equity growth fund with an investment objective to generate income and long term capital appreciation through a diversified mid cap fund. 

Bharti AXA Focused Infrastructure Fund is an open ended equity scheme with an objective to generate long term capital appreciation through a portfolio of predominantly equity and equity related securities of companies engaged in infrastructure and infrastructure related sectors.

Birla Sun Life MF makes Addendum to Two of its Funds

With effect from 01 September 2010 

Birla Sun Life Asset Management Company Limited has decided to extend Birla Sun Life Century SIP (hereinafter referred to as 'Century SIP') an add-on, optional feature under Birla Sun Life India Reforms Fund, an open ended equity scheme and Birla Sun Life Small & Midcap Fund, an open ended small & mid cap equity scheme in addition to the Regular SIP facility offered under the schemes w.e.f 01 September 2010. 

Accordingly, w.e.f 01 September 2010 Century SIP may be availed by the investors under Birla Sun Life India Reforms Fund and/or Birla Sun Life Small & Midcap Fund in addition to the other designated schemes for Century SIP. The terms and conditions for availing Century SIP shall be as stipulated under Notice-cum-Addendum(s) dated 28 May 2008, 17 June 2008, 22 August 2008 and 05 May 2009 read in consonance.

Principal PNB MF makes Addendum to its Principal Global Opportunities Fund

Principal PNB Mutual Fund has announced that the total expenses of the Principal Global Opportunities Fund shall be as specified under as per the SEBI notification dated 29 July 2010.

Accordingly, the total expenses of the scheme including the management fee shall be either: Not exceeding 0.75% of the daily or weekly average net assets OR 

It may consist of – a. Management fee not exceeding 0.75% of the daily or weekly average net assets, b. Other expenses relating to administration of the scheme and c. Charges levied by the underlying schemes. Provided the sum total of a,b and weighted average of the total expenses ratio of the underlying schemes shall not exceed 2.50% of the daily or weekly average net assets of the scheme. 

All other features and terms and conditions of the Schemes shall remain unchanged. This addendum forms an integral part of the Scheme Information Document/Key Information Memorandum issued for the schemes read with the addenda issued thereunder.

Mutual funds make small purchases

Inflow of Rs 5 crore on 30 August 2010 

Mutual funds (MFs) bought shares worth a net Rs 5 crore on Monday, 30 August 2010, much lower than Rs 65.70 crore on Friday, 27 August 2010. 

The net inflow of Rs 5 crore on 30 August 2010 was a result of gross purchases Rs 339.10 crore and gross sales Rs 334.10 crore. The BSE Sensex rose 33.70 points or 0.19% to 18,032.11 on that day. 

MFs sold shares worth net Rs 2820.80 crore in August 2010 (till 30 August 2010). Mutual funds had sold equities worth a net Rs 4405.30 crore in July 2010.

IRDA slaps Rs 20 lakh fine on Bharti

Insurance regulator IRDA has slapped a fine of Rs 20 lakh on Bharti Enterprises-promoted Bharti Axa Life Insurance Company and Bharti Axa General Insurance Company for not disclosing changes in the ownership pattern. 

Both Bharti Axa Life Insurance Company and Bharti Axa General Insurance Company have been asked to pay a penalty of Rs 10 lakh each. 

However, Bharti AXA General Insurance MD and CEO Amarnath Ananthanarayanan said, "No transfer of shareholding or shares has taken place in our general insurance and life insurance joint ventures. We will take up the matter with the IRDA and present the facts. We are hopeful that the regulator will reconsider its decision to levy the penalty." 

From the Bharti AXA General Insurance standpoint, it is business as usual. This does not in anyway affect the stability and daily working of the company, he added. 

Bharti Ventures Ltd, one of the promoter entities holding a 40 per cent stake in Bharti Axa Life Insurance Company, was owned to the extent of 99 per cent by partnership firm Bharti Enterprises, IRDA said in an order. 

However, Bharti Enterprises was converted into Bharti Enterprises (Holding) Private Limited with effect from January 8, 2010. 

"This change in the status of your promoter entity, Bharti Enterprises, from a partnership firm to a private limited company had conferred upon it the status of a subsidiary company in terms of Section 4 of the Companies Act, 1956," the order said. 

The restructuring was found to be in violation of the relevant provisions of the Registration Regulations. Besides, the information related to these material changes in the ownership pattern of the promoter entity were not furnished by the company, the order said. 

Thus, a penalty of Rs 10 lakh is imposed on Bharti Axa Life Insurance Company, it said, adding that the penalty amount shall be paid within a period of 15 days from the date of receipt of the order. 

The insurer submitted that the non-compliances were committed inadvertently and hence may be condoned. 

The order further noted that the effect of non-compliance by any insurer of any regulatory mandate, issued in the interest of the orderly growth of the insurance business, is likely to jeopardise the regulation and development of the business. It would in turn impact the interests of the policyholders. 

On similar grounds, the non-life insurance firm promoted by the mobile operator, Bharti Axa General Insurance Company, was also slapped with a Rs 10 lakh penalty. 

Bharti Axa Life started its operations in July, 2006, while Bharti Axa General Insurance was incorporated in June, 2008.

Rel Capital appoints Kela as Chief Investment Strategist

ADAG firm Reliance Capital announced appointing Madhusudan Kela as Chief Investment Strategist with effect from September 21, 2010. 

"Madhu has been a driving force in the growth of our mutual fund business over the last ten years and we now look forward to his valuable contribution across the full spectrum of our businesses," Reliance Capital CEO Sam Ghosh said. 

Kela, who is Reliance Mutual Fund's Head of Equities at present, will be replaced by Sunil Singhania, the company said in a filing to the Bombay Stock Exchange. Singhania holds the position of Deputy Head of Equities in Reliance Mutual Fund. 

"I am delighted to get this larger canvas with increased responsibilities, and thereby make a wider contribution to the Reliance Capital family," Kela said. 

Anil Ambani-led Reliance Capital is a non banking finance company, which manages equity assets of over Rs 50,000 crore spread across businesses like life insurance, mutual funds and private equity.

Crude goes up again

Strong data pushes crude higher 

Crude prices registered gains once again on Thursday, 26 August 2010. Prices rose as initial claims data checked in better than expected at US thereby partly erasing concerns about the recovery of the US economy from last year's recession. 

On Thursday, crude oil futures for light sweet crude for October delivery closed at $73.36/barrel (higher by $0.83 or 1.2%). Last week, crude ended lower by 2.6%. 

For the month of July, crude ended higher by 4.5%. Before this, in June, oil prices shed 2.7%. Crude ended second quarter of CY 2010 lower by 9.3%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 2.5%. 

The Labor Department reported on Thursday, 26 August 2010 that the number of people filing first-time claims for unemployment benefits fell for the first time in four weeks, by 31,000 to 473,000. The four-week average of initial claims, a better gauge of employment trends than the volatile weekly number actually rose slightly, up 3,250 to 486,750. 

Despite the decline, claims are still at a level that reflects the weakened state of the U.S. economy. First-time filings for the latest week are higher by 4% compared to the start of 2010 and by nearly 11% since early July. 

In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.4%. 

Yesterday, the EIA reported an increase of 4.1 million barrels to the nation's oil stockpiles for the week ended 20 August 2010. Gasoline inventories rose 2.3 million barrels, while distillates inventories rose 1.8 million. 

On Thursday, gasoline for September delivery rose 4 cents, or 2.4%, to settle at $1.91 a gallon. 

Natural gas for September delivery lost 5 cents, or 1.4%, to $3.82 per million British thermal units. That was the lowest close since late September 2009. Natural-gas prices were flat in early trading but sank into the red Thursday after a weekly report on inventories showed a rise on the higher end of expectations. 

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex. 

At the MCX, crude oil for September delivery closed higher by Rs 56 (1.6%) at Rs 3,470/barrel. Natural gas for September delivery closed at Rs 183.1, lower by Rs 2.7 (1.4%).

Bullion metals decline

Investors shift away from precious metals as initial claims data do not disappoint 

Better than expected initial claims data pushed bullion metals lower on Thursday, 26 August 2010 at Comex. The data lifted some concerns from the economy thereby reducing appeal of precious metals against good alternate investment. Prices fell despite a rising dollar. 

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. Recently, the embattled euro has played stronger role in moving prices rather than dollar fluctuation. Bullion metals have registered increase in prices despite strong dollar in recent times and vice versa. 

On Thursday, gold for December delivery ended at $1,237.7 an ounce, lower by $3.6 (0.3%) on the New York Mercantile Exchange. Last week, gold ended higher by 1%. 

Gold ended the month of July lower by 5%. It was the worst monthly loss for gold since December 2009. Before this, it ended June higher by 2.5%. For the second quarter, gold ended up by 12%, its seventh consecutive quarterly gain. For the first quarter of this year, gold rose by 1.7%. On a year to date basis, gold is higher by 13.5%. 

On Thursday, September Comex silver futures ended lower by 5 cents (0.3%) at $19.02. Last week, silver ended lower by 0.6%. For the month of July 2010, silver shed 3.7%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 7.9%. 

The Labor Department reported on Thursday, 26 August 2010 that the number of people filing first-time claims for unemployment benefits fell for the first time in four weeks, by 31,000 to 473,000. The four-week average of initial claims, a better gauge of employment trends than the volatile weekly number actually rose slightly, up 3,250 to 486,750. 

Despite the decline, claims are still at a level that reflects the weakened state of the U.S. economy. First-time filings for the latest week are higher by 4% compared to the start of 2010 and by nearly 11% since early July. 

In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.4%. 

Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year. 

Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level. 

At the MCX, gold prices for October delivery closed lower by Rs 98 (0.5%) at Rs 18,874 per ten grams. Prices rose to a high of Rs 18,995 per 10 grams and fell to a low of Rs 18,857 per 10 grams during the day's trading. 

At the MCX, silver prices for September delivery closed Rs 61 (0.2%) lower at Rs 30,160/Kg. Prices opened at Rs 30,246/kg and fell to a low of Rs 30,102/Kg during the day's trading.

FIIs provisionally offload shares worth a net Rs 108 crore today

Domestic funds mop up shares worth a net Rs 239.60 crore 

Foreign institutional investors (FIIs) sold shares for the third day in a row on Friday, 27 August 2010, as per provisional data released by the stock exchanges. FIIs today, 27 August 2010, sold shares worth a net Rs 108.16 crore. Domestic funds bought shares worth a net Rs 239.60 crore.

The BSE 30-share Sensex lost 227.94 points or 1.25% to 17,998.41, on worries about the pace of the economic recovery in the US, the world's biggest economy

LIC crosses one crore individual policies mark in current financial year

Life Insurance Corporation of India, India's largest life insurer, has crossed the mark of one crore individual policies for the current financial year, with First Premium Income of Rs 15917 crore in the fortnight ended 14 August 2010. In the previous year, LIC had crossed this landmark on 31 August 2009. 

Among the largest contributors to this stupendous performance are LIC's Western Zone with more than 15.86 lakh policies, South Central Zone with 15.46 lakh policies, Northern Zone with 15.04 lakh policies, North Central Zone with 13.54 lakh policies, South Zone with 12.78 lakh policies and Eastern Zone with 12.29 lakh policies. East Central Zone with 9.52 lakh policies and Central Zone with 5.98 lakh policies also made valuable contributions. 

During the previous financial year, LIC had completed a record 3.88 crore individual policies, with a market share of 73.02%. The Corporation's performance in the current financial year has been record breaking so far and as on 31 July 2010, it has increased its market share in first year premium to 71.33% as against 64.86% as on 31 March. 

Besides having the largest customer base of about 27 crore policies, it has an enviable conservation ratio of more than 90%, which is a testimony of customers' trust in the organization and its high quality customer service. Currently it provides fully computerised and networked service through its 2048 branch offices and 1035 satellite offices spread throughout the length and breadth of the country.

ICICI Prudential MF Launches One Year Plan

NFO Period from 27 August to 7 September 2010 

ICICI Prudential Mutual Fund has launched a new fund named as ICICI Prudential Fixed Maturity Plan – Series 52 – 1 Year Plan C, a close ended debt scheme. The tenure of the scheme is 371 days. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 27 August and closes on 7 September 2010. 

The investment objective of the scheme is to generate regular returns by investing in a portfolio of fixed income securities/ debt instruments which mature on or before the date of maturity of the scheme. 

Presently, two options are available under the scheme viz. cumulative and dividend option. Dividend Payout is the only facility available under dividend option. The cumulative option shall be default option under the scheme. 

The scheme will allocate up-to 100% of assets in Central and State Government securities. It would further invest in money market instruments, short term and medium term debt securities / debt instruments and securitized debt with low to medium risk profile. 

Entry load and exit load charge are not applicable for the scheme. The scheme is proposed to be listed on NSE. 

The minimum application amount is Rs 5000 and in multiples of Re 1 thereafter. 

The fund seeks to collect a minimum subscription amount of Rs 5 crore under the scheme during the NFO period. 

The scheme's performance will be benchmarked against Crisil Composite Bond Fund Index. 

The scheme will be managed by Mr. Chaitanya Pande.

Escort MF Announces Dividend for its Income and Opportunities Fund

Record date for dividend is 02 September 2010 

Escort Mutual Fund has announced the declaration of dividend for Escort Income Fund (Dividend, Growth and Bonus Plan) and Escort Opportunities Fund (Dividend and Growth Plan). The record date for dividend has been fixed as 02 September 2010. 

The quantum of dividend will be Rs 0.070 per unit under the Escort Income Fund and upto Rs 0.0981 per unit under the Escort Opportunities Fund on a face value of Rs 10 per unit. 

Escort Income Plan has an investment objective to generate current income by investing predominantly in a well diversified portfolio of fixed income securities and money market instruments with moderate risk levels. 

Escort Opportunities Fund has an investment objective to generate long term capital appreciation by predominantly moving investments in a portfolio of equity and equity related securities amongst different sectors.

Birla Sun Life Nifty ETF files offer document with Sebi

An open ended, Index Linked, Exchange Traded Fund 

Birla Sun Life Mutual Fund has filed offer document with Sebi to launch Birla Sun Life Nifty ETF, an open ended, Index Linked, Exchange Traded Fund. The NFO price will be Rs 10 per unit. 

Investment Objective: The investment objective of the scheme is to provide returns that closely correspond to the total returns of securities as represented by S&P CNX Nifty, subject to tracking errors. 

Plans/Options: The scheme will have Growth Plan only. 

Minimum Application Amount: Minimum of Rs. 5,000 and in multiples of Rs. 1000 thereafter per application. 

Minimum Target Amount: The minimum subscription (target) amount under the scheme shall be Rs. 10,00,00,000 during the New Fund Offer Period. 

Asset Allocation: The scheme will invest 90-100% in securities comprising of underlying benchmark index. The scheme may also invest upto 10% in debt and money market instruments. Money market instruments include commercial papers, commercial bills, treasury bills, and government securities having an unexpired maturity upto one year, call or notice money, certificate of deposit, usance bills, CBLOs and any other like instruments as specified by the Reserve Bank of India from time to time. 

Benchmark: S&P CNX Nifty. 

Load Structure: Nil 

Fund Manager: Mr. Satyabrata Mohanty.

FIIs in selling mode

Net outflow of Rs 290.40 crore on 25 August 2010 

Foreign institutional investors (FIIs) were in selling mode on Wednesday, 25 August 2010, as per the latest data from the Securities & Exchange Board of India (Sebi). FIIs sold shares worth a net Rs 290.40 crore on Wednesday 25 August 2010. The data for 25 August 2010 includes figures from one custodian pertaining to transactions executed on Monday 23 August 2010 due to delay in reporting of the data, Sebi said. 

The net outflow of 290.40 crore on 25 August 2010, as mentioned above, was a result of gross purchases Rs 2559.40 crore and gross sales Rs 2849.80 crore. There was an outflow of Rs 297.60 crore from the secondary equity markets, which was a result of gross purchases Rs 2551.20 crore and gross sales Rs 2848.70 crore. The BSE 30-share Sensex lost 131.95 points or 0.72% to 18,179.64 on that day, as concerns over the pace of the global economic recovery hurt sentiment across global equity markets. 

There was an inflow of Rs 7.10 crore into the category 'primary market & others', which was a result of gross purchases Rs 8.20 crore and gross sales Rs 1.10 crore. 

FII inflow in August 2010 totaled Rs 11291 crore (till 25 August 2010). FIIs had bought equities worth Rs 17,657.60 crore in July 2010. FII inflow in the calendar year 2010 totaled Rs 58985.30 crore (till 25 August 2010).

There are a total of 1,729 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Food inflation is in double digit

Inflation is a concern -RBI 

The index for primary articles group rose by 0.1 %to 308.1 (Provisional) from 307.8 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 14.75 %(Provisional) for the week ended 14 August 2010 compared with 14.85% last week and 7.74% during 15 August 2009.

The index for 'Food Articles' group declined by 0.2 %to 297.9 (Provisional) from 298.6 (Provisional) for the previous week due to lower prices of fish-inland (11%), moong, poultry chicken and gram (2% each) and maize, arhar, urad and rice (1% each). However, the prices of fruits & vegetables (2%) and wheat (1%) moved up. However inflation of food articles recorded 10% growth during the week ended 14 August 2010 compared with 15 August 2009. 

The index for 'Non-Food Articles' group rose by 1.0 %to 290.6 (Provisional) from 287.7 (Provisional) for the previous week due to higher prices of groundnut seed (7%), raw silk (5%), raw jute (2%) and copra and linseed (1% each). However, the prices of soyabean (4%) and raw rubber (2%) declined. 

The index of fuel and power group remained unchanged at their previous week's (ended 7 August 2010. The rate of inflation was (-)8.90 %during the corresponding week (ended 15 August 2009 ) last year. 

Recently, RBI has released Annual report 2009-10 and highlighted inflation as a major concern. Going forward, as the monetary position is normalized, addressing structural constraints in several critical sectors is necessary to sustain growth and also contain supply side risks to inflation.

ICICI Prudential MF Announces Changes under Banking & PSU Debt Fund

With effect from 25 August 2010 

ICICI Prudential Mutual Fund has announced change in features for ICICI Prudential Banking & PSU Debt Fund. The changes will be effective from 25 August 2010. 

Subscription Period:

 

The scheme shall re-open for fresh purchases / additional purchases / switch-ins till further notice. 

Introduction of Retail & Premium options under the scheme:

 

The scheme features of retail and premium option are as under: 

Minimum Application Amount: Rs 5000 and in multiples of Re 1 thereafter for retail option. Rs 25 lakh and in multiples of Re 1 thereafter. 

Minimum Additional Application Amount: Rs 1000 and in multiples of Re 1 thereafter. 

Minimum Redemption Amount: Rs 500 and in multiples of Re 1 thereof provided minimum balance should not fall below Rs 5000. 

Sub-Option Available: The scheme offers growth and dividend option. Dividend option offers daily and weekly dividend reinvestment facilities. 

Exit load structure: The exit load charge will be 0.5% of the applicable NAV, if the amount sought to be redeemed or switched out, is invested for a period of upto 90 days from the date of allotment. The exit load charge will be nil if the amount sought to be redeemed or switched out, is invested for a period of more than 90 days from the date of allotment. 

The existing option under the scheme shall be called as Premium Plus option with dividend and growth as sub-options. Dividend sub-option will have daily and weekly dividend reinvestment facilities. 

Change in minimum application amount under Premium plus option:

 

The minimum application amount for all fresh purchases / switch-ins under the premium plus option of the scheme would be Rs 1 crore and in multiples of Re 1 thereafter. 

ICICI Prudential Interval Fund – Annual Interval Plan I:

 

No exit load shall be charged for switches made between growth and dividend sub-options of the scheme.

Kotak Global Emerging Market Fund to be converted into an Open Ended Scheme

With effect from 28 September 2010 

Kotak Mutual Fund has announced the conversion of Kotak Global Emerging Market Fund, a three year close ended equity scheme into an open ended equity scheme with effect from 28 September 2010. 

Post conversion into open ended scheme, the following changes will be effective to the scheme: 

Asset Allocation Pattern

 

The scheme would allocate 90% to 100% of assets in units of emerging markets equity mutual fund schemes. Currently the investments of the scheme are in units of Global Emerging Markets Equity Fund of T Rowe Price SICAV. The scheme would further allocate upto 10% of assets in debt and money market securities. 

Exit Load Structure

 

The scheme will charge an exit load of 1% if exited within 1 year from the date of allotment of units and nil if exited after 1 year from the date of allotment of units. 

Unitholders of the scheme who are not in agreement with the conversion may redeem their units at applicable NAV or switch to other open ended schemes of Kotak Mutual Fund without payment of exit load between 26 August 2010 and 27 September 2010 (both days inclusive).

HDFC Mutual Fund Launches 3 FMP's

HDFC Mutual Fund has launched three fixed term funds named as HDFC FMP 35D August 2010 (3), under HDFC Fixed Maturity Plans – Series XIV, and HDFC FMP 370D September 2010 (1) and HDFC FMP 25M September 2010, under  HDFC Fixed Maturity Plans – Series XV (closed ended income schemes).

Name of Plan	NFO Opening Date	NFO Closing Date
HDFC FMP 35D August 2010 (3)	31 August 2010	31 August 2010
HDFC FMP 370D September 2010 (1)	1 September 2010	6 September 2010
HDFC FMP 25M September 2010	1 September 2010	13 September 2010

The investment objective of the plans is to generate regular income through investments in debt / money market instruments and government securities maturing on or before the maturity date of the plans.

The schemes shall offer two options - growth and dividend option.

The schemes would invest 60% to 100% of assets in debt & money market instruments including securitized debt. Investments in securitized debt shall not normally exceed 75% of the net assets of the plan. The schemes may invest up to 40% of net assets in government securities.

The minimum application amount is Rs 5000 and in multiples of Rs 10 thereafter.

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under each scheme during the NFO period.

Entry and exit load charge will be nil for the schemes.

Benchmark Index for HDFC FMP 35D August 2010 (3) will be CRISIL Liquid Fund Index. For HDFC FMP 370D September 2010 (1) and HDFC FMP 25M September 2010 the benchmark index will be CRISIL Short Term Bond Fund Index.

Birla Sun Life MF Announces Change in Feature of SIP

With effect from 1 September 2010 

Birla Sun Life Mutual Fund has announced that the Systematic Investment Plan (SIP) registration (either through ECS / Direct Debit or PDCs) will be discontinued in case; three consecutive SIP installments are not honored or in case of Fast Forward Facility, three sequential SIP installments are not honored. The changes will be effective from 1 September 2010.

UTI MF Declares Dividend For MNC Fund

Record date for dividend is 31 August 2010 

UTI Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of UTI – MNC Fund. The record date for dividend has been fixed as 31 August 2010. 

The quantum of dividend will be 15% (Rs 1.50 per unit) as on the record date. The NAV of the scheme was at Rs 38.16 per unit as on 24 August 2010. 

UTI – MNC Fund is an open – end equity scheme. The funds collected under the scheme shall be invested predominantly in stocks of Multinational Corporations, Liquid stocks and invested in equities & equity related instruments.

ICICI Prudential MF Declares Dividend Under Five Schemes

Record date for dividend is 31 August 2010 

ICICI Prudential Mutual Fund has announced 31 August 2010 as the record date for declaration of dividend on the face value of Rs 10 per unit under the dividend options of following schemes: 

1. ICICI Prudential Monthly Income Plan – Half Yearly Dividend: Dividend – Re. 0.3700 per unit. The scheme recorded NAV of Rs 12.5496 per unit as on 24 August 2010. 

2. ICICI Prudential Monthly Income Plan – Quarterly Dividend: Dividend – Re. 0.1860 per unit. The scheme recorded NAV of Rs 12.3676 per unit as on 24 August 2010. 

3. ICICI Prudential Gilt Fund Treasury Plan – Quarterly Dividend: Dividend – Re. 0.1200 per unit. The scheme recorded NAV of Rs 11.7564 per unit as on 24 August 2010. 

4. ICICI Prudential Income Opportunities Fund – Institutional Option – Quarterly Dividend: Dividend – Re. 0.1360 per unit. The scheme recorded NAV of Rs 10.7424 per unit as on 24 August 2010. 

5. ICICI Prudential Income Opportunities Fund – Retail Option – Quarterly Dividend: Dividend – Re. 0.1320 per unit. The scheme recorded NAV of Rs 10.4315 per unit as on 24 August 2010.

Mutual funds continue selling

Net outflow of Rs 419.10 crore on 25 August 2010 

Mutual funds dumped shares worth a net Rs 419.10 crore on Wednesday, 25 August 2010, compared to a net outflow of Rs 715.60 crore on Tuesday, 24 August 2010. 

The net outflow of Rs 419.10 crore on 25 August 2010 was a result of gross purchases Rs 438 crore and gross sales Rs 857.10 crore. The BSE 30-share Sensex lost 131.95 points or 0.72% to 18,179.64 on that day, as concerns over the pace of the global economic recovery hurt sentiment across global equity markets. 

Mutual funds have dumped shares worth a net Rs 2868.20 crore in this month so far, till 25 August 2010. Mutual funds had offloaded stocks worth a net Rs 4405.30 crore last month.

Mutual funds upset over SEBI’s idea of forced listing of units on stock exchanges - Money Life Reports

The move will escalate compliance burden on AMCs who see no value addition to investors

Market regulator Securities and Exchange Board of India's (SEBI) intention to mandatorily list all mutual fund schemes has received widespread flak from the industry. According to industry players speaking to Moneylife on the condition of anonymity, listing fund units on the stock exchanges will not provide any value addition to investors but will only burden them with additional compliance requirements. They complain that they are already inundated with excessive compliance work after the sweeping changes brought in by the regulator over the past one year.

Partly due to such frequent and extensive changes, equity mutual fund schemes have witnessed Rs11,560 crore of redemption since the regulator abolished entry loads in August 2009. Since November 2009, the industry has lost a whopping 8.33 lakh equity folios till July 2010.

In a move to counteract the sudden fall in mutual fund inflows, the regulator allowed trading of fund units on the stock exchanges. National Stock Exchange (NSE) started its online trading platform for MFs on 30 November 2009 and the Bombay Stock Exchange (BSE) launched its BSE StAR MF platform on 4 December 2009. However, the volumes have been meagre so far. In July 2010, the NSE recorded 2,340 transactions with Rs20.65 crore of net inflows.

Last week, the regulator asked fund houses to facilitate smoother transfer of mutual fund units between two demat accounts. This too is going to increase the cost for fund houses without any material benefit to investors. Moneylife had earlier reported on how the regulator was seeking bank-sponsored mutual funds' help to boost trading volumes on the exchanges which received a tepid response from bankers.

Now in another forced measure, the regulator has asked all fund companies to compulsorily list their units on the exchanges. "The regulator has sought feedback from us. We will be replying in a few days. The cost of listing mutual fund units is less compared to stocks. All our equity schemes are already listed. We are sorting out the operational issues. The compliance department will have a tough time ahead," said an official who did not wish to be named.  

In order to list units on the NSE, mutual funds with a corpus up to Rs100 crore have to cough up Rs16,000 initially; if the tenure of the scheme is more than six months, the listing fee as applicable for multiples of six months will be levied. Similarly, the initial listing fee for a scheme whose corpus exceeds Rs1,000 crore is Rs1.25 lakh.

Unlike MFs, companies have to shell out Rs25,000 as initial listing fees and have to incur an additional annual listing fee depending on the paid-up share capital of the company. As the share capital goes up further, the fee also goes up. Currently 20 fund houses have listed their schemes on the NSE while the Bombay Stock Exchange (BSE) has 23 AMCs on board.