Precious metals end mixed

Yellow metal manages to add little spark

Precious metal prices ended mixed with yellow metal ending slightly higher on Tuesday, 29 September, 2009. But dollar's movement kept the gains under control.

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.

On Tuesday, gold for December delivery ended at $994.4, higher by $0.30 (0.03%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $997.2 and also fell to a low of $986.1 during intra day trading. Last week, gold ended lower by 1.9%. Year to date, gold prices are higher by 13%.

Gold ended August, 2009 higher by 0.2%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (4%) since then.

On Tuesday, Comex silver futures for December delivery fell 1.5 cents (0.1%) to $16.18 an ounce.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 45% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar remained extremely volatile. The dollar gained ground especially against the Japanese currency after the nation's finance minister hinted at the possibility of intervention to arrest the yen's rise. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.2%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed lower by Rs 5 (0.03%) at Rs 15,542 per 10 grams. Prices rose to a high of Rs 15,569 per 10 grams and fell to a low of Rs 15,456 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 131 (0.5%) lower at Rs 25,999/Kg. Prices opened at Rs 26,199/kg and fell to a low of Rs 25,850/Kg during the day's trading.

Crude ends marginally lower

Prices drop but recover from intra day low level

Crude prices ended marginally lower at Nymex on Tuesday, 29 September, 2009. But prices managed to come off their intra day lows. Mixed batch of economic reports weighed on the crude prices.

On Tuesday, crude-oil futures for light sweet crude for November delivery closed at $66.71/barrel (lower by $0.13 or 0.2%). During intra day trading, prices fell to a low of $65.82 and also rose to a high of $67.33. Last week, crude ended lower by 8%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 65% since then. Year to date, in 2009, crude prices are higher by 41%.

The Conference Board in USA reported on Tuesday, 29 September, 2009 that the U.S. consumer confidence index fell in September as Americans grew more concerned about the economy, their job prospects and their incomes. The consumer confidence index fell to 53.1 in September from 54.5 in August, reversing part of August's nearly seven-point gain.

In the currency market on Tuesday, the dollar remained extremely volatile. The dollar gained ground especially against the Japanese currency after the nation's finance minister hinted at the possibility of intervention to arrest the yen's rise. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.2%.

Among other energy products on Tuesday, gasoline for October delivery fell 0.8 cents to $1.63 a gallon. Heating oil for October rose 0.9 cents to $1.70 a gallon.

Also on Tuesday, natural gas rose, with the new front-month November contract up 5 cents, or 1%, to $4.88 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

External debt at US$ 227.7 billion

Current account deficit at US $ 5.8 billion

India's external debt stood at US$ 227.7 billion at the end of June 2009. The increase in external debt by US$ 3.7 billion over end-March 2009 level was mainly due to increase in long term external debt, particularly Non-Resident Indian (NRI) deposits. The share of US dollar denominated debt in the total external debt declined to 54.4 % as at end-June 2009 from 56.3 % as at end-March 2009. The share of non-Government debt in the total external debt declined marginally to 74.8 % as at end-June 2009 from 75.5 % as at end-March 2009. On other hand, the external commercial borrowing for April-June 2009 stood lower at US$ 2.7 billion as compared with US$ 3.8 billion for the corresponding quarter of the previous year.

On other hand, decline in exports which started since October 2008 continued during the first quarter of 2009-10. Import payments, on a BoP basis, also continued its declining trend mainly due to lower oil import bill. Despite net invisibles surplus, the large trade deficit mainly on account of sharp decline in exports led to a current account deficit of US$ 5.8 billion in Q1 of 2009-10.

The gross capital inflows to India revived during Q1 of 2009-10 as compared to the last two quarters of 2008-09 manifesting confidence in India's long-term growth prospects. The gross inflows were, however, at US$ 78.5 billion as compared to US$ 90.9 billion in Q1 of 2008-09 mainly led by inflows under FIIs, FDI and NRI deposits With the revival in capital inflows to India, particularly foreign investments, the capital account showed a turnaround from a negative balance in last two quarters of 2008-09 to a positive balance of US$ 6.7 billion during Q1 of 2009-10 (US$ 11.1 billion in Q1 of 2008-09).

Net capital inflows, however, was lower in Q1 of 2009-10 as compared to that in the corresponding period of last year mainly because of large net outflows under short-term trade credits and banking capital. During Q1 of 2009-10, FDI to India was channeled mainly into manufacturing sector (19.2 %), real estate activities (15.6 %), financial services (15.4 %), construction (12.2 %) and business services (11.7 %). Mauritius continued to be the major source of FDI during Q1 of 2009-10 with a share of 48.9 % followed by USA at 12.8 %.

Financial News Flash

Bharti, MTN Decide to Call Off Discussions on Proposed $24 Billion Merger Bharti Airtel Ltd., India’s largest wireless operator, and South Africa’s MTN Group Ltd. called off merger talks, scrapping a proposed $23 billion transaction that would have been the world’s biggest cross-border deal this year.

Indian Banks, Stock Laggards May Advance Next Quarter, Merrill Lynch Says Indian banks, engineering companies and drugmakers that have been laggards this quarter may lead a rally in the next three months, while software developers and metal stocks may under-perform, according to Bank of America Merrill Lynch.

Monsoon Rainfall Is Driest in More Than Three Decades, Weather Office Says India’s monsoon rainfall, the main source of irrigation for the country’s 235 million farmers, is the weakest in more than three decades, threatening farm output in the world’s second-biggest producer of rice, wheat and sugar.

Oil India Gains in Trading Debut on Expectations of Increased Gas Output Oil India Ltd., the state-run explorer that raised 27.8 billion rupees ($578 million) in an initial offering, gained on its trading debut on expectations of increased oil and natural gas prices and higher gas output.

Parsvnath Developers Raises $35 Million Selling Shares to Large Investors Parsvnath Developers Ltd., an Indian property developer, raised $35 million selling shares, a person familiar with the matter said. The stock soared to a 15- month high.

Air India Pilots Call Off Strike After Carrier Pauses Incentive-Cut Plan Air India’s pilots called off a four-day strike after the national carrier decided to “keep in abeyance” a move to cut incentives, airline spokesman Jitender Bhargava said.

Crude Oil's Sideways Trend Points to Climb Above $70: Technical Analysis Crude oil has a greater chance of rising above $70 a barrel the longer it stays in the sideways pattern that has characterized trading in the past two months, according to National Australia Bank Ltd.

Wockhardt Climbs to Highest in a Year on U.S. Preliminary Drug Endorsement Wockhardt Ltd., an Indian drugmaker, surged to its highest level in more than a year in Mumbai trading after saying it got preliminary U.S. approval to sell its drug for the treatment of prostate enlargement.

Asian Corporate Bond Rally Will Survive Surge in Junk Sales, Calyon Says A surge in junk bond sales won’t derail the rally in Asian corporate debt because borrowers are seeking funds for expansion rather than to refinance high-risk loans as in the U.S., according to Calyon.

Greenspan Sees U.S. Economy Slowing in 2010 as Stock Prices `Flatten Out' Former Federal Reserve Chairman Alan Greenspan said he sees the U.S. economy slowing next year as the surge in stocks comes to an end.

Chicago Purchasing Index, Job-Loss Data Signal Sluggish Economic Recovery The U.S. recovery may be slow to develop as a gauge of business activity dropped unexpectedly and a private report showed employers cut more jobs than forecast in September.

U.S. Stocks Drop as Purchasing Report Signals Weakness in Spending, Output U.S. stocks fell, trimming the market’s second straight quarterly rally, as an unexpected contraction in a gauge of business activity spurred concern the economy is struggling to recover.

Five Top U.K. Banks Said to Agree to Impose G-20 Bonus Limits on 2009 Pay Britain’s five biggest banks agreed to impose limits on bank bonuses agreed upon by Group 20 leaders last week following a meeting with Chancellor of the Exchequer Alistair Darling earlier today, a person familiar with the matter said.

CIT Said to Consider Financing From Citigroup, Barclays as Deadline Nears CIT Group Inc., the commercial lender that has said it may be forced to file for bankruptcy, is considering an offer of financing from Citigroup Inc. and Barclays Capital, people familiar with the situation said.

Macquarie to Buy Investment Bank Fox-Pitt Kelton for About $146.7 Million Macquarie Group Ltd. agreed to buy investment bank Fox-Pitt Kelton Cochran Caronia Waller LLC for about $146.7 million, the third North American acquisition by Australia’s biggest investment bank since May.

American Express Kills Fee for Dormant Gift Cards in Bid to Expand Sales American Express Co., the biggest U.S. issuer of prepaid gift cards, will eliminate fees deducted from cards that go unused as it pursues a bigger share of an estimated $25 billion market this holiday season.

source: Bloomberg

HDFC MF launches 18 months plan

NFO Period from 5 October- 14 October 2009

HDFC Mutual Fund has planned to launch a new fund named as HDFC FMP 18M October 2009, fixed maturity plan under HDFC Fixed Maturity Plans - Series XI, a close-ended income scheme. The face value of the new issue will be Rs 10 per unit. The new issue will be opened for subscription from 5 October 2009 till 14 October 2009.

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

Maturity date of the scheme would be 18 months from the date of allotment of units of the scheme.

The fund would invest 60% to 100% in debt & money market instruments including securitized debt. The scheme may invest upto 40% of the scheme's net assets in government securities. Investments in securitized debt would be upto 75% of the net assets of the plan.

The entry and exit load charge will not be applicable for the scheme.

The units of the scheme will be listed on the National Stock Exchange and / or any other stock exchange.

Birla Sun Life MF Announces Change in Key Personnel

With immediate effect

Birla Sun Life Mutual Fund has decided to make change in key personnel and fund management responsibility.

Mr. Lokesh Mallya has been designated as the key personnel of Birla Sun Life Asset Management Company Ltd (BSLAMC) in his capacity as Fund Manager of some of the schemes of the Fund House. Mr. Lokesh Mallya is aged 30 years old and holds MBA, FRM as his educational qualification. He has over 4 years of experience. Prior to joining BSLAMC, he has worked with Aditya Birla Management Corporation Limited as Management Trainee.

The fund management responsibilities of the following schemes have been reassigned with immediate effect. Accordingly Mr. Kaustubh Gupta and Mr. Lokesh Mallaya will be the Fund Manager for Birla Sun Life Short Term Fund. Mr. Maneesh Dangi and Mr. Kaustubh Gupta will be fund manager for Birla Sun Life Medium Term Plan.

Reliance MSCI India Value Exchange Traded Fund files offer document with Sebi

An open-end exchange listed, index linked scheme

Reliance Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to launch Reliance MSCI India Value Exchange Traded Fund, an open-ended exchange listed, index linked scheme tracking MSCI India Value Index. The new fund offer (NFO) price for the scheme is Rs.10 per unit.

The investment objective of Reliance MSCI India Value Exchange Traded Fund (RELIANCE MSCI INDIA VALUE ETF) is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the MSCI India Value Index.

The scheme would invest 90-100% of asset in Securities covered by the MSCI India Value Index and 0-10% in money market instruments, g-secs, convertible bonds, debentures & other securities including CBLO. Debt securities will also include securitised debt, which may go up to 10% of the portfolio.

Minimum amount for application in the NFO is Rs. 5,000 per application.

The fund aims to collect a minimum subscription of Rs.50 lakh.

The schemes performance would be benchmarked against MSCI India Value Index.

Krishan Daga will be the fund manager for this scheme.

Reliance MSCI India Growth Exchange Traded Fund files offer document with Sebi

An open-end exchange listed, index linked scheme

Reliance Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to launch Reliance MSCI India Value Exchange Traded Fund, an open-ended exchange listed, index linked scheme tracking MSCI India Growth Index. The new fund offer (NFO) price for the scheme is Rs.10 per unit.

The investment objective of Reliance MSCI India Growth Exchange Traded Fund (RELIANCE MSCI INDIA GROWTH ETF) is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the MSCI India Growth Index.

The scheme would invest 90-100% of asset in securities covered by the MSCI India Growth Index and 0-10% in money market instruments, g-secs, convertible bonds, debentures & other securities including CBLO. Debt securities will also include securitised debt, which may go up to 10% of the portfolio.

Minimum amount for application in the NFO is Rs. 5,000 per application.

The fund aims to collect a minimum subscription of Rs.50 lakh.

The schemes performance would be benchmarked against MSCI India Growth Index.

Krishan Daga will be the fund manager for this scheme.

Provide detailed information to customers, insurers told

Tightening its supervision on domestic life insurers, regulator Insurance Regulatory and Development Authority (Irda) has asked them to provide detailed information on premiums they are collecting from policyholders.

Insurers will have to submit in the prescribed formats information pertaining to policies where premiums are awaited for more than a quarter to Irda.

Data of premiums awaited in the individual business of non-single premium type alone shall be included for this purpose.

The data will include the number and amount of policies.

The premiums awaited on the policies sold under rural and social sector obligations shall be furnished separately in the relevant columns prescribed by the Irda.

Individual business reckoned for the purpose of rural and social sector obligations only needs to be considered for this purpose.

Data for 2008-09 may be furnished separately for linked and non-linked policies with slab-wise break-ups of the annual premiums.

Life insurers, from the first quarter of 2009-10, would be required to submit data with linked/non-linked, premium slab-wise, mode-wise, distribution channel-wise break-ups, as shown in the formats.

Insurers are also required to furnish data for the year 2008-09 by the end of this month. The data for the first quarter of 2009-10 onwards will have to be furnished by the 15th of the month following the subsequent quarter.

source: Indian Express

Common platform for MFs likely by March

The much-awaited common platform for mutual fund investors to provide easy access to them as well as to distributors, reduce costs and improve efficiency will be kicked off in March 2010 and the dummy run for this is expected to start by early January 2010.

This platform is expected to eventually change the way funds are sold in India. AP Kurian, chairman of the Association of Mutual Funds in India (Amfi), said, "The advisory committee of the Amfi will take a decision on the common platform in the next four-five weeks. We have received bids from four companies."

Officials close to the development said that of the 15 companies that had placed bids the advisory committee has shortlisted, CAMS, Karvy, NSDL and CDSL, of which one will be selected to manage the platform. "Everything will be finalised once the committee meets and gives its final recommendation. By January 2010 we will start the dummy run and seek responses from market players. Once that falls in place the platform will start operating from March next year," said a member of the advisory committee.

Once the platform starts functioning, investors will have to register with a designated agency that will provide them with an identification number. Through this, investors can log on to a website, transact and access information regarding overall value of their investment in mutual funds.

"Investors will be able to access all the information under one roof and this will reduce paperwork for the distributors. The transactions by investors will be faster and this will provide a wider reach to investors," added Kurian.

After this platform starts, investors would receive an online common account statement, which will have details of all their investments in mutual funds. Market regulator, Securities and Exchange Board of India has, from the August 1, banned entry load and later announced parity among all classes of investors in charging the exit load.

According to Jaideep Bhattacharya, chief marketing officer, UTI Mutual Fund, and a member of Amfi's advisory committee, "When this platform starts, it will be useful for new investors to invest in mutual funds as the procedure will be simple. It will also have a common application form for different mutual fund schemes."

source: Indian Express

FII inflow in September 2009 crosses Rs 17000 crore

Inflow of Rs 3311.90 crore on 25 September 2009

Foreign institutional investors (FIIs) bought shares worth a net Rs 3,311.90 crore on Friday, 25 September 2009, much higher than Rs 1,322.10 crore on Thursday, 24 September 2009.

FII inflow of Rs 3,311.90 crore on 25 September 2009 was a result of gross purchases Rs 5,440.30 crore and gross sales Rs 2,128.40 crore. The BSE Sensex fell 88.43 points or 0.53% to 16,693 on that day.

FII inflow in September 2009 totaled Rs 17,328 crore (till 25 September 2009). Foreign funds had bought equities worth Rs 4028.80 crore in August 2009. FII inflow in the calendar year 2009 totaled Rs 57,525.70 crore (till 25 September 2009).

There are a total of 1,700 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Crude manages to climb up

Prices go up after last week's steep fall

Crude prices managed to end higher at Nymex on Monday, 28 September, 2009. But dollar's movement kept the gains under control.

On Friday, crude-oil futures for light sweet crude for November delivery closed at $66.84/barrel (higher by $0.82 or 1.2%). Last week, crude ended lower by 8%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 64% since then. Year to date, in 2009, crude prices are higher by 42%.

In the currency market on Monday, the dollar remained extremely volatile. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 1.5% earlier during the day but then erased most of its gains.

Among other energy products on Friday, October reformulated gasoline rose 2 cents, or 1.2%, to $1.64 a gallon and October heating oil gained 2 cents, or 1.2%, to $1.69 a gallon.

Also on Friday, natural gas for October delivery fell 25 cents, or 6%, to $3.73 per million British thermal units. The October contract expired today. The new front-month November contract fell 11.8 cents to finish at $4.83 Btus.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

Precious metals end higher

Volatile dollar keeps gains under check

Precious metal prices ended higher on Monday, 28 September, 2009. Prices rose in synchronization with stocks at Wall Street. But dollar's movement kept the gains under control.

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.

On Friday, gold for December delivery ended at $994.1, higher by $2.5 (0.25%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $998 and also fell to a low of $986 during intra day trading. Last week, gold ended lower by 1.9%. Year to date, gold prices are higher by 13%.

Gold ended August, 2009 higher by 0.2%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (4%) since then.

On Friday, Comex silver futures for December delivery rose 14 cents (0.8%) to $16.2 an ounce.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 46% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar remained extremely volatile. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 1.5% earlier during the day but then erased most of its gains.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Financial News Flash

GE Revives Indian Wind Energy Business After Government Improves Subsidies General Electric Co., the biggest maker of power-generation equipment, is reviving its Indian wind-turbine business after a four-year absence because the government has improved incentives.

Sensex Index Rises Most in Two Weeks on Tata Consultancy Sales Optimism India’s benchmark stock index rose the most in two weeks, led by software exporters, after Tata Consultancy Services Ltd. forecast sales would jump this year.

Merrill Said to Hire AIG's Saurabh Sonthalia to Run India Capital Markets Bank of America Merrill Lynch hired Saurabh Sonthalia to head its capital markets business in India, two people familiar with the matter said.

Cairn Seeks Two Offshore Rigs for Oil, Gas Exploration in India, Sri Lanka Cairn Energy Plc, the U.K.-listed explorer focused on India, wants to hire two offshore drilling rigs as it seeks new oil and gas deposits in South Asia.

Ten-Year Government Bonds Drop After Finance Ministry Unveils Auction Plan India’s 10-year bonds fell for a third day after the government announced its debt sale plan for the second half of the fiscal year ending March.

Rupee Declines Amid Speculation of Dollar Demand for End-of-Month Payments India’s rupee dropped the most in two weeks on speculation importers stepped up their purchases of foreign currency to meet month-end payments.

Lupin Advances After Purchasing U.S. Rights for Oscient's Cholesterol Drug Lupin Ltd., an Indian generic drugmaker, rose in Mumbai trading after it bought the U.S. rights for the cholesterol-lowering drug Antara from Oscient Pharmaceuticals Corp.

White Sugar Rises to Highest Since at Least 1989 on Outlook for Supplies White sugar rose to the highest since at least 1989 in London on speculation production from Brazil and India, the world’s largest growers, won’t eliminate a global supply deficit.

India's Iron Ore Prices Increase on Higher China Demand Ahead of Holidays India’s export price for iron ore rose as much as 16 percent in the past week as customers in China replenished inventories ahead of National Day holidays, said an official of the Indian mineral industry association.

FDIC Says Banks Must Prepay Fees Through 2012 to Boost Depleted Reserves The Federal Deposit Insurance Corp., seeking to replenish deposit reserves as banks fail at the fastest pace in 17 years, today voted unanimously to have lenders prepay fees through 2012, raising about $45 billion.

Home Prices in 20 U.S. Cities Climb the Most in Four Years as Slump Abates Home values in 20 U.S. metropolitan areas climbed in July by the most in almost four years, a sign the housing slump that led to the worst recession in seven decades is abating.

JPMorgan's Bill Winters to Leave Firm; Jes Staley Will Run Investment Bank JPMorgan Chase & Co. shook up the leadership of its investment bank, surprising analysts by announcing the immediate departure of co-chief executive officer William “Bill” Winters and naming asset-management chief Jes Staley to run the business.

U.S. Stocks Fluctuate as Housing Data Offset Drop in Consumer Confidence U.S. stocks fluctuated after an unexpected slump in consumer confidence offset a smaller-than- forecast drop in home prices. Treasuries declined, while oil retreated as the dollar strengthened.

Pimco's Gross Says He's Purchasing Treasuries to Protect Against Deflation Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said he’s been buying longer maturity Treasuries in recent weeks as protection against deflation.

Walgreen Profit Tops Analysts' Estimates as Drug Sales Jump; Shares Climb Walgreen Co., the second-largest U.S. drugstore chain, reported fourth-quarter profit that topped analysts’ estimates after boosting prescription-drug sales. The shares jumped 6.8 percent in early trading.

London Stock Exchange Hires Morgan Stanley, Barclays Capital as M&A Banks London Stock Exchange Group Plc, Europe’s oldest independent bourse, hired Morgan Stanley and Barclays Capital to replace Bank of America-Merrill Lynch as its adviser on mergers and acquisitions, four months after Xavier Rolet took over as chief executive officer.

source: Bloomberg

Franklin Templeton MF Appoints Key Personnel

With effect from 9 September 2009

Franklin Templeton Mutual Fund has announced that Dr. (Mrs.) Indu Shahani has been appointed as the Director of Franklin Templeton Trustee Services Pvt. Ltd., the Trustee Company of the fund house. The change is effective from 9 September 2009. She is an independent director.

Dr. Shahani, aged 58 years, is the Hon'ble Sheriff and Principal of H.R. College of Commerce & Economics, Mumbai. She has earned a Doctorate in Commerce from University of Mumbai.

DWS Treasury Fund Floats On

NFO Period from 25 September - 08 October 2009

Deutsche Asset Management has launched DWS Treasury Fund (DTF). The scheme is an open-ended debt fund. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is opened for subscription from 25 September 2009 to 08 October 2009.

The primary objective of the scheme is to provide liquidity and generate stable returns by investing in a mix of short term debt and money market instruments.

The Scheme shall offer two plans - Cash and Investment plan. Both the plans carry two options namely, regular and institutional which further has a sub option of dividend and growth option. Dividend option offers only daily reinvestment option.

The minimum investment amount under Regular option is Rs 5000 per application and in multiples of Re 1 thereafter. While under the Institutional option minimum investment would be Rs 1 crore per application and in multiples of Re 1 thereafter.

Under the investment plan the fund would invest 85% to 100% in debt securities and money market instruments with duration not greater than 1 year, with low risk profile and it will invest the remaining 0%-15% in debt securities with duration greater than 1 year, with low to medium risk profile.

Under the cash plan the fund would invest 50%-100% in debt securities and money market instruments with duration not greater than 91 days carrying low risk profile, from 0%-50% in debt securities and money market instruments with duration not greater than 91 days but not greater than 1 year again carrying low risk profile and finally the remaining 0%-15% in debt securities with duration greater than 1 year carrying low to medium risk profile.

The entry load will not be applicable for both cash and investment plan. The exit load remains nil for cash plan while for the investment plan there will be an exit load of 1.00% if redeemed/switched out with in 12 months of allotment.

Crisil Liquid Fund Index will remain the benchmark for the scheme.

The fund will be managed by Dwijendra Srivastava.

JM Financial MF Announces Changes

With effect from 1 October 2009

JM Financial Mutual Fund has announced changes in all schemes of JM Financial Mutual Fund. The changes will be effective from 1 October 2009.

Facility of re-registration under Systematic Investment Plan (SIP): No entry load is to be charged for investments into the schemes. Pursuant to the above, all existing SIP investors of fund house are being provided with the facility of re-registering their existing SIP for the remaining installments, without any entry load, by making a request on a prescribed form containing the requisite under taking. However, the other existing terms and conditions (including) broker code, exit load applicability for respective installments etc. as prevailing at the time of original registration of the SIP, shall remain unchanged for the re-registered SIP

Applicability of NAV for subsequent SIPs: In case, an SIP due date falls on a non-business day, the NAV of the next business day shall be applied while processing the respective installment under SIP, even if the investor's account is dedicated on the SIP due date under any of the schemes other than Liquid schemes. For Liquid Schemes, the existing provisions will continue.

KYC requirement for SIPs: It is clarified that in case of SIPs (including Special SIPs but excluding Micro SIPs), alongwith the PAN card, the copy of the KYC acknowledgement would be required for investments of Rs 50,000 or more per installment at time of initial investment.

Mutual funds continue selling

Sales worth Rs 107.10 crore on 25 September 2009

Mutual funds (MFs) sold shares worth a net Rs 107.10 crore on Friday, 25 September 2009, much lower than Rs 797.20 crore on Thursday, 24 September 2009.

MFs' net sales of Rs 107.10 crore on 25 September 2009 was a result of gross purchases Rs 581.40 crore and gross sales Rs 688.50 crore. The BSE Sensex fell 88.43 points or 0.53% to 16693 on that day.

MFs sold shares worth a net Rs 2241 crore in September 2009 (till 24 September 2009). MFs had bought shares worth a net Rs 570.30 crore in August 2009.

SBI W.I.S.E. Fund files offer document with Sebi

An open-end equity scheme

SBI Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to launch SBI W.I.S.E. Fund (Winning Investment Strategies in Equities Fund), an open-ended equity scheme. The new fund offer (NFO) price for the scheme is Rs.10 per unit.

The objective of the scheme would be to provide investors with opportunities for long-term growth in capital through investments in equity and equity related instruments. The scheme will invest in stocks which are the constituents of SGI WISE India Index, an index based on a quantitative model.

The scheme offers growth option and dividend option. Under the dividend option, facility for reinvestment/payout of dividend will be available.

The scheme would invest 90-100% of asset in equities and equity related instruments. 0-10% in debt and money market securities.

Minimum amount for application in the NFO is Rs. 10,000 and in multiples of Rs. 1 thereafter

Exit Load:

For exit within 1 year from the date of allotment - 1%

For exit after 1 year from the date of allotment - Nil

The minimum targeted amount is Rs.30 crore.

The schemes performance would be benchmarked against CNX 100.

Arun Agarwal will be the fund manager for this scheme.

NFO of Religare PSU Equity Fund floats on

NFO period from 29 September -28 October 2009

Religare Mutual Fund has launched new fund offer of Religare PSU Equity Fund, an open-ended equity scheme on 29 September 2009. The fund will be opened for fresh subscription till 28 October 2009. The scheme will be re-opened for continuous sale and repurchase on 27 November 2009. The face value of the new issue is Rs 10 per unit.

Details of the Religare PSU Equity Fund:

The scheme seeks to generate capital appreciation by investing in equity and equity related instruments of companies where the Central / State Government has majority shareholding or management control or has powers to appoint majority of directors.

The scheme offers growth and dividend options. Dividend option will have further dividend reinvestment and payout facilities.

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

The scheme seeks to collect a minimum corpus of Rs 1 crore during NFO period.

Asset allocation: The scheme will invest 65-100% in equity & equity related instruments of the constituents of BSE PSU Index with high risk profile. The fund will be having investment exposure up to 35% in equity & equity related instruments of PSU companies other than the constituents of the BSE PSU Index with high risk profile. Investment in equity & equity related instruments of non PSU companies will be up to 20% with high risk. The scheme will invest up to 35% in debt & money market instruments with low to medium risk profile.

Non PSU companies are considered as companies which are PSU at the time of investment and which may subsequently become non PSU because of privatization or disinvestment. Investment in securitized debt including pass through certificate (PTC) shall not exceed 20% of the net assets of the Scheme. The scheme will not invest in foreign securitized debt.

Load structure during NFO period and on an ongoing basis: The scheme will not charge entry load.

In respect of each purchase / switch-in of units, an exit load of 1% is payable, if units are redeemed / switched-out on or before 1 year from the date of allotment. In respect of each purchase / switch-in of units, no exit load is payable, if units are redeemed/ switched-out after 1 year from the date of allotment.

Benchmark index: The performance of the scheme is being benchmarked to BSE PSU Index.

Fund manager: Pradeep Kumar is the fund manager for the scheme.

L&T signs MOU with DBS Cholamandalam Asset Management

Purchase by LTF of the 100% shareholding of CDFL

L&T Finance Limited (LTF) and Cholamandalam DBS Finance Limited (CDFL) have signed a MoU for the purchase by LTF of the 100% shareholding of CDFL in DBS Cholamandalam Asset Management Limited (DCAM) for a consideration of Rs. 45 crore adjusted for cash balance and current assets as of date of closing.

Consummation of this transaction is subject to appropriate regulatory approvals to be obtained. This acquisition would help synergise with L&T's existing Financial Services Business by deepening and widening its services.

L&T believes that its brand and reach will enable building a robust and valuable asset management business. DCAM has a professional team with a vast experience in asset management business.

The average assets under management of DCAM was Rs. 2893 crore as of 31 August 2009. L&T was advised by Equirus Capital on the transaction.

Financial advisors, distributors set up firm to push their cause

Over three million financial advisors and distributors have decided to come together and form Financial Intermediaries Association of India (FIAI), a not-for-profit company, in a bid to put up a collective face.

The move to set up an entity under the Companies Act was pushed by some of the leading distribution houses in the country after the recent clamp on mutual funds regarding payment of exit and entry load to distributors.

“The main aim of the organisation is not to be a trade union but a trade association representing distributors and financial advisors from every segment of the market, including foreign and domestic banks, brokerage houses, mutual funds and insurance distributors and even individual financial advisors. The body would be the common voice of the industry,” said Rajiv Bajaj, managing director, Bajaj Capital, a financial services distributor. Bajaj said that there was a need to improve the image of the distribution industry and to open a formal channel of communication with various stakeholders.

The financial product distribution business, estimated to be an over Rs 3,000-crore industry, lost nearly a third of the revenue following the Securities and Exchange Board of India (Sebi) diktat on entry and exit load. While the Sebi decision was taken after several rounds of consultations with fund houses, represented by the Association of Mutual Funds in India, the distributors said they were not kept in the loop.

“There was no national level representation for the distribution community and hence it was becoming difficult to make their interests and concerns known. But FIAI can go a long way in representing the industry,” said Kanwar Vivek, CEO, Birla Sun Life Distribution.
“Members have been trying to form this body for over three years and it is not a reactionary move. The aim in the long term is to build a credible face for the industry, which can talk favourably and also make others understand the importance and interests of the segment. However, the organisation is still in its initial stages and it would require representation from all the segments including that from all financial advisors,” said Nitin Rao, executive vice president, HDFC Bank.

FIAI has already conducted several meetings which saw representatives from wealth management and distribution arms of ICICI Bank, HDFC Bank, Citibank, BNP Paribas, Religare Securities and Karvy, among others.

“The organisation will enroll at least 5,000 members in the first year, which would comprise most of the top distributors and financial advisors,” said a member of FIAI.

The one-time membership fees for corporate houses and large institutions would be Rs 2-3 lakh, whereas individual and small financial advisors and distributors would have to pay Rs 5,000 a year. The board of members of FIAI would be elected and the company would also be registered with Sebi, said sources.

source: Business Standard

Govt gearing up for Goods and Services Tax by April 1, 2010

The Centre is gearing up for the implementation of the Goods and Services Tax as the April 1, 2010, deadline draws closer and is holding regular meetings with the states to make them agree to the proposed tax regime that will do away with most central and state indirect taxes.

Though some states are still apprehensive that GST will do away with their fiscal autonomy, considerable progress has been made in negotiations to allay their concerns.

"We are almost having meetings on a daily basis...To bring all states together and make them agree to GST was a difficult task. Some states had apprehensions. The process has made considerable progress," Central Board of Excise and Customs Chairman V Sridhar today said.

He said many states are protective about their autonomy so far as taxes levied by them is concerned.

After the Empowered Group of state finance ministers met on GST last week, Madhya Pradesh Finance Minister had expressed apprehension that the new tax system would take away the states' rights to tinker with rates.

The GST will subsume the central indirect tax levies like excise and service tax and a host of state taxes like VAT, octroi and purchase tax.

The structure would be a dual structure--one at the centre and the other at the states level.

States have already agreed to have two rates of taxes, with one standard rate and the other lower rate for essential goods. The rates, however, have yet not been finalised.

The government has set a deadline of April 1, 2010, to introduce GST.

Source: ET

Precious metals turn paler

Weak housing report takes dollar up

Precious metal prices continued to turn pale on Thursday, 24 September, 2009. Prices fell today after dollar firmed up following weaker than expected housing report.

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.

On Thursday, gold for December delivery ended at $998.9, lower by $15.5 (1.5%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $1,021 and also fell to a low of $991.3 during intra day trading. Last week, gold ended higher by 0.4%. Year to date, gold prices are higher by 13.5%.

Gold ended August, 2009 higher by 0.2%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (4.3%) since then.

On Thursday, Comex silver futures for December delivery fell 61 cents (3.6%) to $16.31 an ounce. Last week, silver ended higher by 2.2%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 45.2% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.6%.

The National Association of Realtors in US reported on Thursday, 24 September, 2009 that resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months. Sales fell in three of four regions last month, with only the West showing a small increase of 2.7%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed lower by Rs 238 (1.5%) at Rs 15,599 per 10 grams. Prices rose to a high of Rs 15,870 per 10 grams and fell to a low of Rs 15,550 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 905 (3.3%) lower at Rs 26,232/Kg. Prices opened at Rs 27,095/kg and fell to a low of Rs 26,155/Kg during the day's trading.

Crude goes deep down

Prices plunge for second straight day

Crude prices registered substantial drop at Nymex on Thursday, 24 September, 2009. Prices fell on demand concerns, firm dollar and yesterday's energy department's weekly inventory report that showed that crude stockpiles rose last week.

On Thursday, crude-oil futures for light sweet crude for November delivery closed at $65.89/barrel (lower by $3.09 or 4.5%). Earlier during the day, it fell to a low of $65.6/barrel. Last week, crude ended higher by 4%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 62.5% since then. Year to date, in 2009, crude prices are higher by 42.3%.

In the currency market on Thursday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.6%.

The National Association of Realtors in US reported on Thursday, 24 September, 2009 that resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months. Sales fell in three of four regions last month, with only the West showing a small increase of 2.7%.

In the latest weekly inventory report, EIA announced yesterday that crude supplies rose 2.8 million barrels in the week ended 18 September, 2009. Gasoline inventories gained 5.4 million barrels, and distillate stockpiles, which include diesel and heating oil, rose 3 million barrels..

Among other energy products on Thursday, October-reformulated gasoline fell 6.83 cents, or 4%, to $1.6366 a gallon, and October heating oil lost 7.8 cents, or 4.4%, to $1.6814 a gallon.

Also on Thursday, October natural gas ended up 9.5 cents, or 2.5%, at $3.955 per million British thermal units. EIA reported today that U.S. natural gas inventories rose 67 billion cubic feet to 3,525 Bcf in the week ended 18 September, 2009. That's only 20 Bcf away from the record high hit in November, 2007.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for October delivery closed lower by Rs 133 (4%) at Rs 3,202/barrel. Natural gas for October delivery closed higher by Rs 8.1 (3.5%) at Rs 236.2/mmbtu.

Financial News Flash

India Will Support G-20 on Ending Fuel Subsidies `Over Time,' Saran Says India will support the Group of 20 leaders on withdrawing subsidies for fossil fuels “over time,” said Shyam Saran, the country’s special envoy on climate change.

Drought-hit India Aims for Record Wheat Crop by Early Sowing, Hybrid Seeds India, the world’s second-biggest wheat grower, expects to harvest a record crop for a second year as a revival in monsoon over the past month raises water levels in major reservoirs, a government official said.

Asian Stocks Fall on Nomura Share Sale, U.S. Home Sales, Commodity Prices Asian stocks dropped, dragging the MSCI Asia Pacific Index to its biggest weekly decline in a month, after Nomura Holdings Inc. announced a record $5.6 billion share offering and sales of existing U.S. homes unexpectedly declined.

Drought to Pare Oilseeds Crop, Support Palm Oil Imports, Trader Patel Says India, the biggest buyer of palm oil after China, may producer fewer monsoon-sown oilseeds as dry weather in the main growing areas reduced sowing of peanuts.

Stocks in India Fall; Hindalco, Sterlite, Tata Decline After Prices Drop India’s benchmark stock index fell to a two-week low, led by commodity producers, after metal prices sank on concern global economic recovery may take longer than expected.

Wells Fargo to Expand India Back-Office Unit, Hiring, Economic Times Says Wells Fargo & Co. is expanding its back-office business unit in India and hiring more workers, the Economic Times reported.

Gold Rises in London, Reducing This Week's Decline, as the Dollar Slides Gold gained in London, reducing the first weekly drop in six, as a sliding dollar increased the metal’s appeal as an alternative investment.

Nalco, Hindustan Copper in Discussion for Metal Exploration in Namibia National Aluminium Co. is in talks with Hindustan Copper Ltd. to explore for the metal in Namibia, National Aluminium Finance Director B.L. Bagra said today in a telephone interview.

Rupee Gains a Third Week as Foreign Funds Buy Stocks for 13th Straight Day India’s rupee rose for a third week as overseas funds added to their holdings of local assets to benefit from growth in Asia’s No. 3 economy.

G-20 Nears Agreement on Banker Pay, Policy Coordination as Crisis Recedes World leaders are poised to crack down on banker pay and better coordinate economic policies as they seek to temper the excesses that helped trigger the worst financial crisis in seven decades.

U.S. Consumer Confidence Climbs More Than Forecast, Michigan Index Shows Confidence among U.S. consumers rose this month to the highest level since January 2008 as the pace of job losses slowed and the economy started to pull out of the worst recession since the Great Depression.

Stocks in U.S. Fluctuate Amid Conflicting Economic Data; McDonald's Gains U.S. stocks fluctuated as reports on durable goods orders and home sales trailed estimates, tempering a higher-than-forecast reading on consumer confidence and a rally in energy shares.

Municipal Yields Plummet to 42-Year Low on Fewer Offerings, Fund Purchases Benchmark borrowing costs for highly rated state and local governments dropped to a 42-year low this week, as the pace of new municipal-bond issues slowed and cash flowing into mutual funds accelerated to a record.

Goldman Sachs May Benefit From Banking Regulation, Citigroup Analyst Says Goldman Sachs Group Inc. executives said that new rules on trading over-the-counter derivatives may benefit the firm because of the company’s technological edge, according to Citigroup Inc. analyst Keith Horowitz.

Nycomed Said to Consider Raising Offer for Solvay Unit as Bid Falls Short Nycomed A/S may raise its offer for Solvay SA’s drugs unit after its bid fell short of the owner’s 5 billion-euro ($7.35 billion) target, according to people familiar with the situation.

Vioxx Death Toll Hits 3,100 as Merck Settles Claims Under Painkiller Pact Merck & Co. is paying claims by the families of more than 3,100 users of its Vioxx painkiller who died of heart attacks or strokes blamed on the drug, according to a law firm administering a $4.85 billion settlement fund.

source: Bloomberg

Birla Sun Life MF Declares Dividend for Monthly Income Scheme

Record date for dividend is 29 September 2009

Birla Sun Life Mutual Fund has announced the declaration of dividend on the face value of Rs. 10 per unit under quarterly dividend option of Birla Sun Life Monthly Income Scheme. The record date for dividend has been fixed as 29 September 2009.

The quantum of dividend will be 1.76% (Rs.0.176 per unit) on the face value of the unit as on the record date. The NAV for the scheme was at Rs. 11.7722 per unit as on 23 September 2009.

Birla Sun Life Monthly Income is an open ended income scheme, with the primary investment objective to generate regular income so as to make monthly and quarterly distributions to unitholders and the secondary objective is growth of capital.

Taurus Nifty Index Fund files offer document with Sebi

An open-ended Index Linked Equity Scheme

Taurus Mutual Fund has filed an offer document with Securities and Exchange Board of India (SEBI) to launch Taurus Nifty Index Fund, an open-ended Index Linked Equity Scheme. The new fund offer (NFO) price for the scheme is Rs.10 per unit.

The investment objective of the scheme is to replicate the S&P CNX Nifty Index by investing in securities of the CNX Nifty Index in the same proportion/weightage.

The scheme offers investors two plans:

(a) Retail plan

(b) Institutional Plan

Both the Plans will offer the following options dividend option: payout or reinvestment and growth option.

The scheme will follow following asset allocation pattern:

80-100% in securities covered by the Nifty

0-20% in debt & money market instruments

The net assets of the scheme will be invested predominantly in stocks constituting the S&P CNX Nifty and / or in exchange traded derivatives on the S&P CNX Nifty. This would be done by investing in almost all the stocks comprising the S&P CNX Nifty Index in approximately the same weightage that they represent in the S&P CNX Nifty Index and / or investing in derivatives including futures contracts and options contracts on the S&P CNX Nifty Index. A small portion of the net assets will be invested in money market instruments permitted by SEBI/RBI including call money market or in alternative investment for the call money market as may be provided by the RBI, to meet the liquidity requirements of the scheme.

Retail Plan: Rs.5000 and in multiple of Rs.1000 thereof and

Institutional Plan: Rs 1 crore and in multiple of Rs 1000 thereof

The scheme seeks to collect a minimum subscription of Rs.1 Lakh during the New Fund Period.

Entry load: Nil

Exit load: 1.00% if redeemed/ switched out within 15 days from the date of allotment

The schemes performance would be benchmarked against S&P CNX Nifty.

The Fund Manager for the scheme is Prasanna Pathak.

Precious metals slip again

Gold & Silver drop again after Federal Reserve's decision

Precious metal prices slipped once again on Wednesday, 23 September, 2009. Prices fell today after Federal Reserve decided to keep interest rates unchanged.

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.

On Wednesday, gold for December delivery ended at $1014.4, lower by $1.1 (0.1%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 0.4%. Year to date, gold prices are higher by 15%.

Gold ended August, 2009 higher by 0.2%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (2.8%) since then.

On Wednesday, Comex silver futures for December delivery fell 20.5 cents (1.2%) to $16.91 an ounce. Last week, silver ended higher by 2.2%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 48.8% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.2%.

In a statement released after a two-day policy meeting, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. It also announced that it has extended its purchase of mortgage-backed securities and agency debt into the first quarter of 2010 from December. In the statement, Fed officials said that economic activity has picked up with improved conditions in financial markets. Lower interest rates tend to hurt the dollar and boost gold's value as a hedge against a weak currency and inflation.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed higher by Rs 21 (0.13%) at Rs 15,837 per 10 grams. Prices rose to a high of Rs 15,885 per 10 grams and fell to a low of Rs 15,746 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 73 (0.3%) lower at Rs 27,137/Kg. Prices opened at Rs 27,299/kg and fell to a low of Rs 26,752/Kg during the day's trading.

Crude plunges

Prices drop as inventories rise

Crude prices plunged at Nymex on Wednesday, 23 September, 2009. Prices fell as energy department's weekly inventory report showed that crude stockpiles rose last week.

On Wednesday, crude-oil futures for light sweet crude for November delivery closed at $68.97/barrel (lower by $2.79 or 3.9%). Earlier during the day, it fell to a low of $68.57/barrel. Last week, crude ended higher by 4%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 58% since then. Year to date, in 2009, crude prices are higher by 46.8%.

In the latest weekly inventory report, EIA announced today that crude supplies rose 2.8 million barrels in the week ended 18 September, 2009. Gasoline inventories gained 5.4 million barrels, and distillate stockpiles, which include diesel and heating oil, rose 3 million barrels..

In the currency market on Wednesday, the dollar erased early gains. The dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.2%.

In a statement released after a two-day policy meeting, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. It also announced that it has extended its purchase of mortgage-backed securities and agency debt into the first quarter of 2010 from December. In the statement, Fed officials said that economic activity has picked up with improved conditions in financial markets. Lower interest rates tend to hurt the dollar and boost gold's value as a hedge against a weak currency and inflation.

Among other energy products on Wednesday, October-reformulated gasoline fell 7.67 cents, or 4.3%, to $1.7049 a gallon, and October heating oil lost 5.27 cents, or 2.9%, to $1.7594 a gallon.

Also on Wednesday, October natural gas soared 25.1 cents, or 7%, to $3.86 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for October delivery closed lower by Rs 110 (3.2%) at Rs 3,335/barrel. Natural gas for September delivery closed higher by Rs 17.7 (10.4%) at Rs 187.4/mmbtu.

FII inflow in September 2009 crosses Rs 12,500 crore

Inflow of Rs 1832.70 crore on 23 September 2009

Foreign institutional investors (FIIs) bought shares worth a net Rs 1832.70 crore on Wednesday, 23 September 2009, higher than Rs 1503.50 crore on Tuesday, 22 September 2009.

FII inflow of Rs 1832.70 crore on 23 September 2009 was a results of gross purchases Rs 4311.20 crore and gross sales Rs 2478.50 crore. The BSE Sensex fell 166.93 points or 0.99% to 16719.50 on that day.

FII inflow in September 2009 totaled Rs 12,694 crore (till 23 September 2009). Foreign funds had bought equities worth Rs 4028.80 crore in August 2009. FII inflow in the calendar year 2009 totaled Rs 52,891.70 crore (till 23 September 2009).

There are a total of 1701 foreign funds registered with the Securities & Exchange Board of India (Sebi).

FII inflow crosses Rs 51,000 crore in 2009

Inflow in September 2009 crosses Rs 10,000 crore

Foreign Institutional investors (FIIs) bought shares worth a net Rs 1503.50 crore on Tuesday, 22 September 2009, lower than Rs 1869.80 crore on Friday, 18 September 2009.

FII inflow of Rs 1503.50 crore on 22 September 2009 was a results of gross purchases Rs 3208.40 crore and gross sales Rs 1704.90 crore. The BSE Sensex rose 145.13 points or 0.87% to 16,886.43 on that day.

FII inflow in September 2009 totaled Rs 10,861.30 crore (till 22 September 2009). Foreign funds had bought equities worth Rs 4028.80 crore in August 2009. FII inflow in the calendar year 2009 totaled Rs 51,059.10 crore (till 22 September 2009).

There are a total of 1699 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Inflation up for six consecutive weeks

Upbeat will continue

The official Wholesale Price Index for all commodities for the week ended 12 September 2009 rose by 0.2% to 242.6 from 242.0 for the previous week.The annual rate of inflation, calculated on point to point basis, stood at 0.37% for the week ended 12 September 2009 as compared to 0.12% for the previous week and 12.42 percent during the corresponding week of the previous year. Build up inflation in the financial year so far was 6.12% compared to a build up of 6.62% in the corresponding period of the previous year.

The index of primary article rose 0.2% to 275.3 from 274.7 for the previous week. The index for food articles group rose 0.1 % to 280.3 from 279.9 for the previous week due to higher prices of fish-inland (11%), mutton (2%) and condiments & spices, maize and wheat (1% each). However, the prices of fish-marine (8%), arhar (2%) and fruits & vegetables, bajra and gram (1% each) declined. The index for non-food articles group also rose 0.5 % to 239.8 from 238.7 for the previous week due to higher prices of groundnut seed (6%), gingelly seed and fodder (2% each) and raw silk and soyabean (1% each).

The index of fuel, power, light and lubricant group rose marginally to 343.5 from 343.4 for the previous week due to higher prices of furnace oil (1%).

The index of manufactured group rose 0.3% to 208.8 from 208.1for the previous week. Among the sub groups, the index for basic metals alloys and metal products, machinery and machine tools rose from there previous week level. The index for basic metals alloys and metal products group rose 2.1% to 260.6 from 255.2 for the previous week due to higher prices of skelps (8%), bars & rods (7%), cr coils (6%), oromild steel & tensile plates, lead ingots and cr sheets (4% each), wire (all kinds), billets & slabs, angles, channels & sections, blooms and zinc (3% each) and zinc ingots (2%). The index for machinery and machine tools group rose 0.5% to 173.3 from 172.4 for the previous week due to higher prices of other cables (11%), rubber insulated cables (7%), carding machine (4%), p.v.c. insulated cables and enameled copper wires (3% each) and other textile machinery (2%).

On the other hand index of food product group declined 0.1% to 241.7 from 241.9 for the previous week due to lower prices of rice bran oil (4%), oil cakes and imported edible oil (2% each). The index for chemicals and chemical product group also group declined 0.1 percent to 229.1 from 229.3 for the previous week due to lower prices of caustic soda (Sodium hydroxide) and purified terephthalic acid (pta) (3% each).

The rise in inflation level indicates that WPI has come out from a statistical negative zone. The week on week acceleration in the inflation amid with the poor monsoon expectations raise the concern about the growing food prices. However the government can hold on rise in food prices by use of procurement stock, ban on exported commodity and import the needed commodity.

Meanwhile the rainfall deficit in the current South West Monsoon narrowed down from whopping 54% shortfall upto 24 June 2009 to a low of 20% shortfall up to 9 September 2009. Instead, the shortfall increased slightly to 21% upto 16 September 2009. In addition to this the area sown to kharif crops in 2009 season increased 3.1% to 930.53 lakh ha as on 17 September 2009 from 902.5 lakh ha in the previous week. However, the shortfall in area sown kharif crops in the current season over last season has narrowed from subsequently from 8.2% on 28 August to 4.7% in the week ended 17 September 2009. The improvement in water reservoir level is a cause for cheer, in these times of gloom for the farmers. All this raise the hope for better Rabi season which assist to curtail the price pressure on food articles.

Financial News Flash

Wholesale Prices Rise for 2nd Week, Posing Dilemma for India Policy Makers India’s wholesale prices rose for a second week, after 13 previous declines, posing a challenge to policy makers who want to boost growth without fanning inflation.

Sensex Index Advances, Erasing Earlier Losses; Shares in HDFC Bank Climb India’s benchmark stock index rose, reversing earlier losses, led by banks on a report that the finance minister signaled he would keep the cost of borrowing at a record low.

Reliance May Stop Gas Supplies to Anil Ambani's Company on Payment Dispute Reliance Industries Ltd., India’s most valuable company, issued a notice to suspend gas supplies to Reliance Infrastructure Ltd for defaulting on payments.

IVRCL Profit Growth May Reach 23% on Increased State Spending, CFO Says IVRCL Infra and Projects Ltd., an Indian maker of canals and power transmission lines, expects annual profit to increase as much as 23 percent as it benefits from government spending on infrastructure.

Zero-Tax Sugar Imports Extended, Rice Growers to Receive Bonus, Pawar Says India, the world’s biggest sugar consumer, will extend duty-free imports of the refined variety beyond the November deadline as demand outpaces supplies for a second year, Farm Minister Sharad Pawar said.

General Motors, India's Reva Tie Up to Develop Battery-Powered Small Cars General Motors Co., the largest U.S. automaker, and Reva Electric Car Co. plan to build a battery-powered small car to sell in India as rising pollution concerns stir interest in alternative-energy vehicles.

Rupee Rises as Foreigners Take Stock Holdings to Most Since December 2007 India’s rupee approached its strongest level in more than six weeks as foreigners stepped up purchases of the nation’s stocks, taking total holdings to the highest since December 2007.

HSBC, Merrill Buy Stakes in Jaiprakash as Citigroup Gets Shares in Suzlon HSBC Global Emerging Markets Equity Fund and Merrill Lynch Capital Markets Espana SA bought stakes in Jaiprakash Associates Ltd., a builder of dams and roads.

Indian Corporate Profit Gains to Slow on `Muted' Global Growth, Kotak Says India’s corporate profits may fall short of analysts’ estimates in the four years ended March 2012 because of the “muted” global economic growth and excess supply of commodities, the country’s top-ranked analyst said.

India May Allow Mutual Funds to Trade on Stock Exchanges, Standard Reports India’s stock market regulator may allow investors to trade mutual fund units through stock exchanges, Business Standard reported, without saying where it got the information.

U.S. Existing Home Sales Unexpectedly Fell in August to 5.1 Million Rate Sales of existing U.S. homes unexpectedly fell last month for the first time since March, signaling the housing recovery will be slow to gain speed.

Stocks in U.S. Retreat as Home Sales Decrease; Alcoa, Caterpillar Decline U.S. stocks fell for a second day as sales of existing homes unexpectedly slumped and the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. Oil fell to a one-month low, while Treasuries rose.

Fed, Treasury Scale Back Emergency Lending Programs as Liquidity Returns The Federal Reserve and U.S. Treasury said they’re scaling back emergency programs aimed at combating the financial crisis, reducing support for firms that now have an easier time getting funding.

CDO Trading Returns to Wall Street as Babson, GoldenTree Hunt for Assets Babson Capital Management LLC and GoldenTree Asset Management LP are among investors bargain- hunting in the $650 billion market for collateralized debt obligations linked to corporate debt as credit markets open.

Lehman Brothers Owes $4.3 Billion for London Headquarters at Canary Wharf Lehman Brothers Holdings Inc., the securities firm that filed the biggest bankruptcy in U.S. history, owes its London landlord $4.3 billion in rent and charges, according to a claim filed by Canary Wharf Group Plc.

Moody's, S&P, Fitch Face Hearings on Role of Securities Ratings in Crisis Moody’s Investors Service, Standard & Poor’s and Fitch Ratings face scrutiny today by insurance regulators examining the role of the firms in evaluating fixed- income securities.

Fired Deutsche Bank Employee Says His Boss Knew About Bohndorf Inquiries Deutsche Bank AG’s former head of investor relations, who was fired for spying on a dissident shareholder, said his immediate superior “knew from the beginning” about the operation.

source: Bloomberg

MFs in buying mode

Purchases worth Rs 109.60 crore on 23 September 2009

Mutual funds (MFs) bought shares worth a net Rs 109.60 crore on Wednesday, 23 September 2009 as against an outflow of Rs 251.80 crore on Tuesday, 22 September 2009.

MFs' net inflow of Rs 109.60 crore on 23 September 2009 was a result of gross purchases Rs 886.30 crore and gross sales Rs 776.70 crore. The BSE Sensex fell 166.93 points or 0.99% to 16719.50 on that day.

MFs sold shares worth a net Rs 1,339.80 crore in September 2009 (till 22 September 2009). MFs had bought shares worth a net Rs 570.30 crore in August 2009.

Precious metals rise for first time in four days

Gold and silver shine on back of lower dollar and higher crude

Precious metal prices rose for the first time in four days on Tuesday, 22 September, 2009. Prices rose today as the dollar weakened. The Federal Reserve started its two day meet on monetary policy today. Precious metal prices also followed higher crude prices.

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.

On Tuesday, gold for September delivery ended at $1014.2, higher by $10.5 (1%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 0.4%. Year to date, gold prices are higher by 16%.

Gold ended August, 2009 higher by 0.2%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (1.8%) since then.

On Tuesday, Comex silver futures for December delivery rose 23.5 cents (1.4%) to $17.115 an ounce. Last week, silver ended higher by 2.2%.

Silver ended 7.1% higher for August, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 48.8% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.7%.

Federal Reserve started its two day meet on monetary policy today. The FOMC will release tomorrow a statement on monetary policy that may clarify how the central bank plans to unwind its quantitative easing programs.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed higher by Rs 40 (0.25%) at Rs 15,816 per 10 grams. Prices rose to a high of Rs 15,888 per 10 grams and fell to a low of Rs 15,768 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 117 (0.43%) higher at Rs 27,210/Kg. Prices opened at Rs 27,193/kg and rose to a high of Rs 27,497/Kg during the day's trading.