IDFC MF introduces Daily SIP

With effect from 1 February 2010 

IDFC Mutual Fund has decided to introduce Daily Systematic Investment Plan (SIP) for all the schemes in which SIP facility is available with effect from 1 February 2010.

Daily SIP transaction will be processed only on business day.

The minimum number of installments shall be six.

All the other features i.e minimum SIP amount, load structure, applicable NAV, etc. shall remain the same.

Sundaram BNP Paribas MIP - Conservative & Aggressive Plan Floats On

NFO Period from 25 January to 23 February 2010 

Sundaram BNP Paribas Mutual Fund has launched a new fund named as Sundaram BNP Paribas Monthly Income Plan (MIP) – Conservative & Aggressive Plans, an open ended income scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 25 January 2010 and closes on 23 February 2010. 

The primary objective of the scheme is to generate regular income through investments in fixed income securities and the secondary objective is to generate long term capital appreciation by investing a portion of the scheme's assets in equity and equity related instruments.

Both the growth and dividend options are available under the plans. Dividend option shall offer dividend payout & dividend reinvestment. Under dividend option monthly, quarterly and half yearly sub options are available.

For Conservative Plan, the fund would allocate 90% to 100% of assets in government securities with low risk profile. It would allocate 90% to 100% of assets in debt securities, money market instruments & cash (including money at call, other than securitized debt) with low to medium risk profile. It would further allocate up to 10% of assets in equity & equity related securities with medium to high risk profile. Investment in Securitized Debt will be upto 75% of the net assets of the Plan.

For Aggressive Plan, the fund would allocate 70% to 100% of assets in government securities with low risk profile. It would allocate 70% to 100% of assets in debt securities, money market instruments & cash (including money at call, other than securitized debt) with low to medium risk profile. It would further allocate up to 30% of assets in equity & equity related securities with medium to high risk profile. Investment in Securitized Debt will be upto 70% of the net assets of the Plan.

Minimum Application Amount for all first time purchases is Rs 5,000/- and in multiples of Re 1/-. For all subsequent purchases, the application must be for a minimum amount of Rs 500 and multiples of Re 1/-.

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

Entry load charge will be nil for the scheme. The scheme will charge an exit load of 1%, for redemption within 12 months from the date of allotment and nil, for redemption on or after 12 months from the date of allotment. 

There will be no Entry and Exit Load in respect of bonus units and of units allotted on reinvestment of dividend.

The scheme has been benchmarked against CRISIL MIP Blended Index.

The scheme would be managed by K Ramkumar (for Debt Portfolio) & Satish Ramanathan (for Equity Portfolio).

Crude slips further

Prices drop due to rise in gasoline inventories and demand concerns

Crude oil prices dropped on Wednesday, 27 January 2010. Prices dropped due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand for crude in coming months. Buildup in gasoline inventories for last week also aided in slipping crude oil prices.

On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $73.67/barrel (lower by $1.04 or 1.4%). During intra day trading, prices rose to a high of $75.14. Last week, crude ended lower by 4.7%. On a year to date basis till date, crude is lower by 8.4%.

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. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 52.5% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

The Energy department reported in its weekly inventory report today that crude-oil supplies for the week ended 22 January 2009 fell 3.9 million barrels.Gasoline inventories rose 2 million barrels. Distillate supplies rose 400,000 barrels. Market was expecting crude and gasoline stockpiles to show an increase of 2 million and 1.7 million barrels respectively.

In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose marginally. The dollar gained almost 0.4% against the euro.

Last week, in the latest report, the Organization of the Petroleum Exporting Countries said that world oil demand is forecast to grow by 800,000 barrels a day this year to average 85.1 million barrels a day, representing no major change from last month's forecast.

Paris based, IEA, left its forecasts for global oil demand for 2010 virtually unchanged in its latest monthly report last week. It forecasts demand of 86.3 million barrels a day in 2010, up 1.7%, or 1.4 million barrels a day higher than 2009.

Among other energy products on Wednesday, March gasoline closed at $1.9474 a gallon, down 3 cents, or 1.5%. Heating oil for March delivery sank 3 cents, or 1.8%, to $1.9267 a gallon.

Also on Wednesday, natural gas futures for March delivery closed down 21 cents, or 3.8%, to $5.224 per million British thermal units, ahead of Thursday's inventories report.

At the MCX, crude oil for February delivery closed Rs 32 (0.92%) lower at Rs 3,445/barrel. Natural gas for February delivery closed lower by Rs 18.7 (7.1%) at Rs 243.9/mmbtu.

Bullion metals shed glaze

Prices drop on demand concerns from China

Precious metal prices ended lower on Wednesday, 27 January 2010. Prices dropped due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand of metals in coming months.

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 April delivery ended at $1,085.7 an ounce, lower by $13.8 (1.3%) an ounce on the New York Mercantile Exchange. Last week, prices ended lower by 2.4%. Year to date in FY 2010, gold prices are lower by 0.8%.

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.

On Wednesday, March Comex silver futures ended lower by 42 cents (2.5%) at $16.44 an ounce. Last week, silver ended lower by 8.1%. Year to date in FY 2010, silver has dropped by almost 2.2%.

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.

The Federal Reserve's statement on U.S. monetary policy came out in the noon hours today. After that, gold traded electronically stuck near its floor trading close. The central bank, as expected, kept its federal-funds rate unchanged on Wednesday and said it would keep them exceptionally low for an extended period.


In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose marginally. The dollar gained almost 0.4% against the euro.

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.

At the MCX, gold prices for February delivery closed lower by Rs 22 (0.13%) at Rs 16,441 per ten grams. Prices rose to a high of Rs 16,558 per 10 grams and fell to a low of Rs 16,422 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 742 (2.8%) lower at Rs 26,071/Kg. Prices opened at Rs 26,751/kg and fell to a low of Rs 26,020/Kg during the day's trading.

FIIs step up selling

Outflow of Rs 1919.80 crore on 27 January 2010

Foreign institutional investors (FIIs) sold shares worth a net Rs 1919.80 crore on Wednesday, 27 January 2010, much higher than Rs 900.40 crore on Monday, 25 January 2010.

FII outflow of Rs 1919.80 crore on 27 January 2010 was a result of gross purchases Rs 2957.10 crore and gross sales Rs 4876.90 crore. The secondary equity market sales totaled Rs 1928.80 crore, which was a result of gross purchases Rs 2947.90 crore and gross sales Rs 4876.70 crore. The BSE Sensex plunged 490.64 points or 2.92% to 16,289.82 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 9.20 crore and gross sales Rs 0.20 crore.

FII inflow in January 2010 totaled Rs 1,663.50 crore (till 27 January 2010). FII had bought equities worth Rs 11,067.20 crore in December 2009. FII inflow in the calendar year 2009 was Rs 84,258 crore.

There are a total of 1,701 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Long-term insurance cover for two-wheelers

The General Insurance Council is mooting on developing a long-term cover for two-wheelers, which will range between 3 and 10 years and bike owners will have the option of paying premiums at one go. Presently, owners get to buy covers for a year, and if it's not renewed at the end of the year, it lapses.

Third-party (TP) cover shields accident victims (other than the owner and the rider) while the own-damage (OD) portion insures the bike in case of an accident. Premium for a bike priced at Rs 50000 is about Rs 900, which includes TP as well as OD.

If there are no claims, bike owners receives a no-claim bonus on the premium to the extent of 20% in the first year and keeps on increasing by 5% for every claim-free year to a maximum of 50% discount.

Financial News Flash

Reserve Bank of India Says Inflation a `Major Concern' Amid Rising Demand India’s central bank said inflation has emerged as a “major concern” amid strengthening consumer demand, signaling the possibility of raising borrowing costs.

Tata Steel Net Income More Than Doubles on Rising Car, Construction Demand Tata Steel Ltd., India’s biggest producer, reported its first quarterly profit increase this financial year on higher demand from automakers and builders.

Sensitive Index Fluctuates; Larsen Slides on Concern Credit Costs May Rise India’s benchmark stock index was little changed, surrendering an earlier advance, on concern policy makers will increase credit costs tomorrow to contain accelerating inflation.

Infosys Benefiting From Financial Services Recovery, Gopalakrishnan Says Infosys Technologies Ltd., India’s second-largest software exporter, is benefiting from a strong rebound in the financial services industry, Chief Executive Officer Senapathy Gopalakrishnan said.

Religare Mutual Plans to Start Gold-Backed Fund to Tap Investors' Demand Religare Mutual Fund, an Indian money-manager with 158 billion rupees ($3.4 billion) in assets, plans to start a gold-backed fund in the world’s biggest user of the precious metal.

Cairn India Third-Quarter Net Beats Estimates on Higher Crude Oil Output Cairn India Ltd., operator of the nation’s biggest onshore crude oil field, reported a 23 percent increase in third-quarter profit, beating estimates, after boosting production.

BTS Plans $150 Million India Clean Energy Fund to Fuel Asian Top Economies BTS Investment Advisors, a private equity fund based in Zurich and Mumbai, plans to start a $150 million fund to invest in Indian clean energy companies amid rising interest in green power to fuel Asia’s top economies.

Rupee Rises Against Dollar on Speculation India Stock Gains to Fuel Demand India’s rupee rose against the dollar on speculation gains in regional stocks will encourage overseas investors to buy local assets.

Power Grid Corp. Gains in Mumbai on Plan to Sell 10% Stake to Fund Project Power Grid Corp. of India Ltd., the nation’s biggest electricity transmission company, rose as much as 2.3 percent in Mumbai trading on a plan to sell a stake to fund a project.

Ford Reports $2.7 Billion Annual Profit After Record Loss, Beats Estimates Ford Motor Co., the only major U.S. automaker to avoid bankruptcy last year, reported annual net income of $2.7 billion after a record 2008 loss and forecast a pretax operating profit for 2010.

Stocks, High-Yield Currencies Gain on Fed Outlook; Bonds Fall, Crude Rises Stocks rose, with the MSCI World Index snapping its longest losing streak in almost a year, and high-yielding currencies and oil gained after the Federal Reserve said the U.S. economy is in a recovery.

U.K. Government's `Huge' Bank Sales Will Surpass Thatcher's Privatizations The British government is seeking to raise more cash by selling its 71.5 billion-pound ($116 billion) stake in three crippled banks than Margaret Thatcher generated by disposing of state-owned businesses during her entire 11 years in office.

Blackstone's Schwarzman Warns of Tighter Credit After Criticism of Banks Banks may start to rein in lending, putting the economic recovery at risk, if politicians keep attacking them and regulatory uncertainty persists, Blackstone Group LP Chief Executive Officer Steven Schwarzman said.

Nokia's Quarterly Prices Rise 65%, Topping Analysts' Estimate; Shares Soar Nokia Oyj, the world’s biggest maker of mobile phones, said fourth-quarter profit rose 65 percent, beating analysts’ estimates, as it unexpectedly reclaimed market share in smartphones.

Lockheed Martin Raises 2010 Earnings Forecast Less Than Analysts Predicted Lockheed Martin Corp., the world’s largest defense company, raised its 2010 profit forecast less than analysts estimated and said fourth-quarter earnings increased less than 1 percent.

Brazil Yields to Drop as Pimco, BofA Say Traders Overestimating Rate Rises Brazilian local bond yields will plunge this year because traders are overestimating interest- rate increases in Latin America’s biggest economy, Bank of America Corp. and Pacific Investment Management Co. said.

source: Bloomberg

Religare MF Unveils Gold Exchange Traded Fund

NFO Period from 28 January to 23 February 2010 

Religare Mutual Fund has unveiled a new fund named as Religare Gold Exchange Traded Fund, an open ended gold exchange traded fund. The New Fund Offer (NFO) price for the scheme is Rs 100 per unit plus premium. The new issue is open for subscription from 28 January 2010 and closes on 23 February 2010.

The investment objective of the scheme is to generate returns that closely correspond to the returns provided by investment in physical gold in the domestic market, subject to tracking error.

The scheme would invest 90% to 100% of assets in physical gold with medium risk profile. It would further invest up to 10% of assets in debt and money market instruments with low to medium risk profile. Investments in securitized debts can be made by the Scheme up to 10% of the net assets.

The minimum application amount for retail investors is Rs 5000 and in multiples of Re. 1 thereafter. The minimum application amount for authorized participants and large investors is Rs 15 lac per application and in multiples of Re. 1 thereafter or 1 kilogram (KG) gold per application and in multiples of 1 kilogram (KG) gold thereafter. The gold should be of finesses of 995 parts per 1000, i.e. 99.5%.

In case of investors opting to switch into the scheme from existing Scheme(s) of Religare Mutual Fund (subject to completion of lock in period, if any) during the NFO period, the minimum amount is Rs 5,000 per application and in multiples of Re. 0.01 thereafter for Retail Investors and Rs 15 lac per application and in multiples of Re. 0.01 thereafter for Authorized Participants and Large Investors.

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

Entry & exit load charge are nil for the scheme.

The scheme's performance will be benchmarked against price of gold.

The units of the scheme will be listed on the Capital Market Segment of the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Ltd. (BSE) within 30 days from the closure of NFO.

Gautam Kaul will be fund manager for the scheme.

Crude ends lower

Prices recover from their intra day lows as consumer confidence improves

Crude oil prices dropped on Tuesday, 26 January 2010. Prices fell as traders mulled over China's tightening of the current monetary policies, which will lead to demand concerns for crude in coming months. Prices also fell in anticipation of buildup in crude and gasoline inventories for last week. But prices recovered from their intra day lows as consumer confidence data showed improvement for third straight time.

On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $74.71/barrel (lower by $0.55 or 0.7%). During intra day trading, prices fell to a low of $73.82. Last week, crude ended lower by 4.7%. On a year to date basis till date, crude is lower by 7%.

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. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 51% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

The Conference Board reported on Tuesday, 26 January 2010 that U.S. consumer confidence index rose to a 16-month high in January 2010. The report detailed that consumer confidence index rose to 55.9 in January from an upwardly revised 53.6 in December. Market was expecting a figure around 53.5. It's the highest reading since September 2008, when the financial crisis intensified. It was the third straight increase for consumerconfidence.

The Energy department will report the latest status on weekly inventory tomorrow. Market is expecting crude and gasoline stockpiles to show an increase of 2 million and 1.7 million barrels respectively.

Last week, in the latest report, the Organization of the Petroleum Exporting Countries said that world oil demand is forecast to grow by 800,000 barrels a day this year to average 85.1 million barrels a day, representing no major change from last month's forecast.

Paris based, IEA, left its forecasts for global oil demand for 2010 virtually unchanged in its latest monthly report last week. It forecasts demand of 86.3 million barrels a day in 2010, up 1.7%, or 1.4 million barrels a day higher than 2009.

Among other energy products on Tuesday, heating oil for February fell 1.5 cents to $1.95 a gallon. Also on Tuesday, natural gas for February slumped 23 cents to $5.49 per million British thermal units, hit by forecasts of warmer U.S. temperatures.

Bullion metals end mixed

Gold rises but silver slips

Precious metal prices ended on a mixed mode on Tuesday, 26 January 2010. Gold prices rose as consumer confidence showed increase in January. But silver prices dropped.

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 April delivery ended at $1,099.5 an ounce, higher by $2.7 (0.2%) an ounce on the New York Mercantile Exchange. Earlier during the day prices dropped. Last week, prices ended lower by 2.4%. Year to date in FY 2010, gold prices are higher by 0.5%.

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.

On Tuesday, March Comex silver futures ended lower by 28.5 cents (1.6%) at $16.86 an ounce. Last week, silver ended lower by 8.1%. Year to date in FY 2010, silver has risen by almost 0.3%.

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.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.3%.

The Conference Board reported on Tuesday, 26 January 2010 that U.S. consumer confidence index rose to a 16-month high in January 2010. The report detailed that consumer confidence index rose to 55.9 in January from an upwardly revised 53.6 in December. Market was expecting a figure around 53.5. It's the highest reading since September 2008, when the financial crisis intensified. It was the third straight increase for consumer confidence.

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.

FIIs continue selling

Outflow of Rs 900.40 crore on 25 January 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 900.40 crore on Monday, 25 January 2010, lower than Rs 2059.50 crore on Friday, 22 January 2010.

FII outflow of Rs 900.40 crore on 25 January 2010 was a result of gross purchases Rs 1628.70 crore and gross sales Rs 2529.10 crore. The secondary equity market sales totaled Rs 893.40 crore, which was a result of gross purchases Rs 1626.50 crore and gross sales Rs 2519.90 crore. The BSE Sensex fell 79.22 points or 0.47% to 16,780.46 on that day.

There was an outflow of Rs 7 crore in the category 'primary market & others', which was a result of gross purchases Rs 2.20 crore and gross sales Rs 9.20 crore.

FII inflow in January 2010 totaled Rs 3583.30 crore (till 25 January 2010). FII had bought equities worth Rs 11,067.20 crore in December 2009. FII inflow in the calendar year 2009 was Rs 84,258 crore.

There are a total of 1,702 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Financial News Flash

India Money Managers Flee Bonds for Cash on Concern Over Rates, Inflation India’s investment managers are selling bonds and putting their funds in money markets, anticipating losses in longer-term debt as inflation quickens and the budget deficit grows.

ONGC Mittal Starts Exploration Drilling in Nigerian Offshore Oil Block 279 ONGC Mittal Energy Ltd., the joint venture between India’s ONGC Videsh Ltd. and Mittal Investments, started exploration drilling in Nigeria’s deep-water Block 279.

Sensitive Index Falls Most in 3 Months on Concern Credit Will be Tightened India’s stocks slid the most in three months, taking the benchmark index to its lowest level since November, amid concern the central bank will this week tighten credit to curb accelerating inflation, curtailing profit growth.

Wipro's Vaswani Expects Software Exports from India to Grow as Much as 14% Wipro Ltd. Chief Executive Officer Suresh Vaswani said the company will sustain margins as software exports out of India are expected to grow 12 percent to 14 percent.

National Aluminium Third-Quarter Profit Declines 22% on Higher Fuel Costs National Aluminium Co., India’s second-biggest producer, posted a decline in profit for the fifth consecutive quarter as higher fuel costs muted earnings.

Essar Oil Says Deal to Acquire Three of Shell Refineries to Take More Time Essar Oil Ltd., operator of India’s second-largest non-state refiner, said a deal to buy three refineries from Royal Dutch Shell Plc will take more time. The shares declined the most in more than two months.

Rupee Falls to Three-Week Low as Importers Buy Dollars Before Month Ends India’s rupee weakened to its lowest in more than three weeks on speculation importers bought dollars to settle month-end bills.

Edelweiss Capital Agrees to Purchase India's Anagram for $35 Million Cash Edelweiss Capital Ltd. agreed to acquire Anagram Capital Ltd. for 1.64 billion rupees in an all cash transaction, Edelweiss said in a statement to the National Stock Exchange today.

Fed May Bet That Housing Comeback Will Survive End to Debt-Buying Program The Federal Reserve may take a chance the housing market can stage a comeback without its support by announcing today it will stick to the plan to end a $1.25 trillion program of mortgage-debt purchases in March.

World Stock Index Declines for a Sixth Day as Yen, U.S. Futures Advance The MSCI World Index of stocks fell for a sixth day, its longest losing streak in almost a year, on concern the global economic recovery will falter. The yen and bonds rose while industrial metals dropped.

Weber Says ECB Could Take Further Steps to Exit Stimulus in the First Half European Central Bank council member Axel Weber said the bank may take further steps in the first half of this year to withdraw liquidity from the banking system as the economy gathers strength.

Swiss Government Will Negotiate With U.S. Over Blocked UBS Bank Accounts Switzerland will work with the U.S. to save a tax settlement involving UBS AG after a Swiss court ruling jeopardized the disclosure of data on as many as 4,200 of the bank’s clients.

China Urges Banks to Examine Property Loans, Promises Reasonable Financing China’s banking regulator told lenders to step up scrutiny of property loans while pledging to satisfy “reasonable” financing needs as it seeks to control credit growth and prevent asset bubbles.

Caterpillar Net Tumbles 65%; Forecast for 2010 Trails Analysts' Estimates Caterpillar Inc., the world’s largest maker of bulldozers and excavators, said fourth-quarter earnings fell 65 percent and forecast 2010 profit that trailed analysts’ estimates.

Geithner Defends Government AIG Rescue Steps as TARP Watchdog Investigates Treasury Secretary Timothy F. Geithner defended the government’s bailout of American International Group Inc. against criticism from lawmakers and a taxpayer watchdog investigating whether information about the rescue was withheld from the public.

source: Bloomberg

Mutual funds resume selling

Sales worth Rs 157.40 crore on 25 January 2010 

Mutual funds (MFs) sold shares worth a net Rs 157.40 crore on Monday, 25 January 2010 as against an inflow of Rs 158.70 crore on Friday, 22 January 2010.

The net outflow of Rs 157.40 crore on 25 January 2010 was a result of gross purchases Rs 726.50 crore and gross sales Rs 883.90 crore. The BSE Sensex fell 79.22 points or 0.47% to 16,780.46 on that day.

MFs sold shares worth net Rs 2883.70 crore in January 2010 (till 25 January 2010). MFs sold shares worth net Rs 1761.90 crore in December 2009.

Crude accumulates more losses

Prices shed almost 5% for the week

Crude oil prices dropped significantly on Friday, 22 January 2010. Prices fell as traders mulled over China's tightening of the current monetary policies, which will lead to demand concerns for crude in coming months. Sell-off of US stocks at Wall Street also pressured to declining commodity prices.

On Friday, crude-oil futures for light sweet crude for March delivery closed at $74.54/barrel (lower by $1.54 or 2%). For the week, crude ended lower by 4.7%. On a year to date basis till date, crude is lower by 8%.

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. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 52% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

During the week, in the weekly inventory report, the EIA reported that crude inventories fell by 471,000 barrels in the week ended 15 January 2010. Market was expecting the report to show a build up of 2 million of crude inventories. The report also showed that gasoline inventories increased by 3.9 million barrels.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies stayed steady against most of its counterparts. The dollar strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans. The dollar index dropped by a mere 0.2%.

Earlier during the week, in the latest report, the Organization of the Petroleum Exporting Countries said that world oil demand is forecast to grow by 800,000 barrels a day this year to average 85.1 million barrels a day, representing no major change from last month's forecast.

Paris based, IEA, left its forecasts for global oil demand for 2010 virtually unchanged in its latest monthly report last week. It forecasts demand of 86.3 million barrels a day in 2010, up 1.7%, or 1.4 million barrels a day higher than 2009.

Among other energy products on Friday, reformulated gasoline for February delivery fell 1.3 cents to $1.97 a gallon and heating oil for February delivery dropped 4.5 cents to $1.94 a gallon.

Also on Friday, bucking the trend in energy, February natural-gas futures rose 21.5 cents, or 3.8%, to $5.82 per million British thermal units.

Bullion metals turn pale

Prices register significant weekly drop

Precious metal prices ended considerably lower on Friday, 22 January 2010. Prices fell as traders mulled over China's tightening of the current monetary policies. Sell-off of US stocks at Wall Street also pressured to declining commodity 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 Friday, gold for February delivery ended at $1,089.7 an ounce, lower by $13.5 (1.2%) an ounce on the New York Mercantile Exchange. Earlier during the day, it fell to a low of $1,081.9. For the week, it ended lower by 2.4%. Year to date in FY 2010, gold has dropped by almost 0.3%.

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.

On Friday, March Comex silver futures ended lower by 40 cents (2.3%) at $16.93 an ounce. For the week, silver ended lower by 8.1%.Year to date in FY 2010, silver has risen by almost 2.8%.

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.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies stayed steady against most of its counterparts. The dollar strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans. The dollar index dropped by a mere 0.2%.

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.

FIIs step up selling

Outflow of Rs 2059.50 crore on 22 January 2010

Foreign institutional investors (FIIs) sold shares worth a net Rs 2059.50 crore on Friday, 22 January 2010, much higher than Rs 569.60 crore on Thursday, 21 January 2010.

FII outflow of Rs 2059.50 crore on 22 January 2010 was a result of gross purchases Rs 3247.20 crore and gross sales Rs 5306.70 crore. The secondary equity market sales totaled Rs 2204.20 crore, which was a result of gross purchases Rs 3092.50 crore and gross sales Rs 5296.70 crore. The BSE Sensex fell 191.46 points or 1.12% to 16,859.68 on that day.

There was an inflow of Rs 144.70 crore in the category 'primary market & others', which was a result of gross purchases Rs 154.70 crore and gross sales Rs 10 crore.

FII inflow in January 2010 totaled Rs 4483.70 crore (till 22 January 2010). FII had bought equities worth Rs 11,067.20 crore in December 2009. FII inflow in the calendar year 2009 was Rs 84,258 crore.

There are a total of 1,701 foreign funds registered with the Securities & Exchange Board of India (Sebi).

IRDA to allow demat account for insurance policies

The Insurance Regulatory and Development Authority (Irda), the insurance industry watchdog, is planning to allow life insurers to dematerialize life insurance policies, just like company shares. So, the buyers of life insurance will now be able to save their policies in a digital form instead of having to maintain paper copies of each transaction over the life of the policy.

Insurance policies in demat form would help in expansion of the industry, lowering costs and higher transparency regarding benefit illustrations. The Life Insurance Council is expected to submit these recommendations to IRDA in the next month.

The major benefits of a demat form for insurance will be the ready disclosure of all policy-related information, covering commissions and fees paid to the company, exact benefits offered, premium payment and renewal-related dates, and terms and conditions of risks covered.

The Life Insurance Council is checking if the technology available at NSDL and CDSL, which collectively hold and manage at least 16 million, demat accounts in the country, is suitable, and if all required information related to the different types of life policies can be handled by the depository houses.

SEBI issues show cause notice to life insurers for ULIPs

The capital market regulator SEBI has asked life insurance companies, including Bharti AXA and Bajaj Allianz Life Insurance, to clarify why they did not seek its approval before offering ULIPs, which invest a fraction of fund in stock markets.

The SEBI has issued a show-cause notice to Bharti AXA Life Insurance asking whether they have permission to launch a ULIP product under the Section 12 (1B) of SEBI Act. Bajaj Allainz Life Insurance has also received the similar notice.

The notice says ULIPs (unit linked insurance products) are investment products and the insurance companies need to take approval from SEBI as well. Section 12 (1B) of SEBI Act prohibits all from carrying out investment schemes, including MFs, in securities markets, unless approved by market regulator.

Financial News Flash

State Bank of India Has Slowest Profit Growth in Three Years as Loans Slow State Bank of India, the nation’s largest, posted its weakest pace of profit growth in three years following losses on surplus funds invested in government bonds.

Mahindra Has Biggest Decline in Five Months After Profit Misses Estimates Mahindra & Mahindra Ltd., India’s largest maker of sport-utility vehicles and tractors, had its biggest decline in more than five months after posting less- than-expected third-quarter profit.

CVC's Venture Pays $771 Million to Acquire Matahari Department-Store Unit Meadow Asia Company Ltd., a unit of U.K. buyout firm CVC Capital Partners Ltd., paid 7.2 trillion rupiah ($771 million) to buy the department store unit of PT Matahari Putra Prima, Indonesia’s biggest retailer.

Overseas Investors Sell Most Indian Equities in 15 Months as Shares Drop Overseas investors sold a net 20.6 billion rupees ($446 million) of Indian stocks on Jan. 22, the biggest one-day sale in more than 15 months, as stocks dropped, according to the nation’s market regulator.

Stocks Fall, Posting Longest Losing Streak in 12 Weeks; Mahindra Declines Indian stocks fell for a fifth day, the longest losing streak in 12 weeks, as Mahindra & Mahindra Ltd.’s lower-than-expected profit underscored concerns that valuations are excessive.

Jet Airways Has First Profit in Three Quarters as Costs Slump; Shares Gain Jet Airways (India) Ltd., the nation’s biggest airline by market value, posted its first profit in three quarters after a decline in costs masked a drop in sales. The shares rose.

Bonds Decline Most in a Week Before Central Bank Meeting on Interest Rates India’s 10-year bonds fell the most in a week on speculation the central bank will act to curb money supply at its policy meeting on Jan. 29 to cool inflation.

Doosan Heavy Wins $1.09 Billion Order to Build Electricity Plant in India Doosan Heavy Industries & Construction Co. won a $1.09 billion contract from GMR Energy to build a coal-fired power plant in India, its largest overseas order since May 2007.

Mumbai to Sell Offices in Reclaimed Marshland for $94 Million on Demand Mumbai, India’s financial capital, plans to sell office space in an emerging business district at a minimum price of 4.35 billion rupees ($94 million) in a deal that may test demand for property amid an economic recovery.

Hindalco Profit Falls on Lower Copper-Refining Fees, Rising Power Costs Hindalco Industries Ltd., India’s largest aluminum producer, reported a 22 percent drop in profit in its third quarter because of rising power costs and lower copper-refining fees.

Wall Street Firms Cut Compensation, `Buckling' to Pressure From Washington Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank slashed their compensation in the fourth quarter, responding to political pressure that will probably persist as details of bonuses for their top executives emerge in coming weeks.

U.S. Futures Gain as Investors Say Drop Overdone; Dollar, Treasuries Fall U.S. stock-index futures rose and European equities pared losses as investors said last week’s global decline was overdone. The dollar and Treasuries fell.

Goldman Sachs Said to Limit London Partners' Pay, Bonuses to $1.6 Million Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, will cap the salary and bonuses of its London partners at 1 million pounds ($1.6 million) amid anger about the size of investment bankers’ pay, said a person familiar with the situation.

Bernanke Confirmation Predicted by White House, Senate Republican Leader Ben S. Bernanke will keep his job as Federal Reserve chairman, the White House and the Senate’s senior Republican predicted two days after wavering support among some Democrats helped drive stock prices lower.

Doll in Sync With Biggs Queries Roubini Exit Strategy With Davos Wise Men The bears of Davos are brandishing their claws again, even as investors declare it’s time for them to hibernate.

Corporate Bond Sales Cut in Half as Yield Spreads Widen: Credit Markets Corporate bond sales are falling

and borrowing costs are increasing for the first time in eight weeks amid investor concern the pace of economic recovery is flagging.

source: Bloomberg

Sundaram BNP Paribas MF Declares Dividend for Tax Saver Scheme

Record date for dividend is 29 January 2010 

Sundaram BNP Paribas Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Sundaram BNP Paribas Tax Saver Scheme. The record date for dividend has been fixed as 29 January 2010.

The quantum of dividend will be 20% i.e Rs 2 per unit on the face value of the unit as on the record date. All the Unit Holders whose names appear on the Register of Unit Holders of the scheme, as at the close of business hours on the said record date shall be eligible to receive dividend declared. Declaration of dividend is subject to availability of distributable surplus on the record date. The scheme recorded NAV of Rs 14.3045 as on 22 January 2010.

Sundaram BNP Paribas Tax Saver is an open end equity linked savings scheme. The investment objective of the scheme is to seek capital appreciation by investing predominantly in equities and equity related instruments.

Religare MF Declares Dividend For Banking Fund

Record date for dividend is 29 January 2010 

Religare Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Religare Banking Fund. The record date for dividend has been fixed as 29 January 2010.

The fund house has decided to distribute dividend of 25% (Re. 2.50 per unit), subject to availability of distributable surplus as on the record date. The NAV for the scheme was at Rs 14.35 as on 22 January 2010.

Religare Banking Fund is an open ended banking sector scheme with the investment objective to generate long-term capital growth from a portfolio of equity and equity related securities of companies engaged in the business of banking and financial services.

Birla Sun Life MF Declares Dividend for Midcap Fund

Record date for dividend is 29 January 2010

Birla Sun Life Mutual Fund has declared dividend on the face value of Rs 10 per unit under dividend option Plan A of Birla Sun Life Midcap Fund. The record date for the dividend is set as 29 January 2010.

The quantum of the dividend will be 25% (Re 2.50 per unit), subject to availability of distributable surplus as on the record date. The scheme recorded NAV of Rs 27.35 as on 21 January 2010.

Birla Sun Life Midcap Fund is an open ended growth scheme with the investment objective of long term growth of capital at controlled level of risk by investing primarily in ‘Mid-Cap' Stocks. The level of risk is somewhat higher than a fund focused on large and liquid stocks. Basically, the aim is to generate higher returns than a fund focused in large and liquid stocks.

Birla Sun Life MF Declares Dividend for Frontline Equity Fund

Record date for dividend is 29 January 2010 

Birla Sun Life Mutual Fund has approved the declaration of dividend on the face value of Rs 10 per unit under dividend option in Plan A of Birla Sun Life Frontline Equity Fund. The record date for the dividend is set as 29 January 2010.

The quantum of the dividend will be 20% (Re 2 per unit), subject to availability of distributable surplus as on the record date. The scheme recorded NAV of Rs 23.46 as on 21 January 2010.

Birla Sun Life Frontline Equity Fund is an open ended growth scheme with the investment objective of long term growth of capital, through a portfolio with a target allocation of 100% equity aiming at being as diversified across various industries and or sectors as its chosen benchmark index, BSE 200. The secondary objective is income generation and distribution of dividend.

Mutual funds in buying mode

Purchases worth Rs 158.70 crore on 22 January 2010 

Mutual funds (MFs) bought shares worth a net Rs 158.70 crore on Friday, 22 January 2010 as against an outflow of Rs 462.80 crore on Thursday, 21 January 2010.

The net inflow of Rs 158.70 crore on 22 January 2010 was a result of gross purchases Rs 1162.70 crore and gross sales Rs 1004 crore. The BSE Sensex fell 191.46 points or 1.12% to 16,859.68 on that day.

MFs sold shares worth net Rs 2726.20 crore in January 2010 (till 22 January 2010). MFs sold shares worth net Rs 1761.90 crore in December 2009.

Bullion metals turn duller

Prices drop as dollar rises to five month high against euro

Precious metal prices continued to shed glaze on Thursday, 21 January 2010. Prices fell as the dollar headed up strongly and the same rose to five month high against the euro.

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 February delivery ended at $1,103.2 an ounce, lower by $9.4 (0.8%) an ounce on the New York Mercantile Exchange. Earlier during the day, it fell to a low of $1,088. Last week, it ended higher by 0.4%. Year to date in FY 2010, gold has risen by almost 0.9%.

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.

On Thursday, March Comex silver futures ended lower by 37 cents (2.1%) at $17.51 an ounce. Last week, silver ended higher by 0.5%. Year to date in FY 2010, silver has risen by almost 5.1%.

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.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose on concerns that Greece and other countries might have problems repaying their loans. Thedollar also strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans.

Among economic reports expected for the day, the Conference Board in US reported on Thursday, 21 January 2010 that leading U.S. economic indicators increased 1.1% in December 2009. Also, the Philadelphia Fed said its manufacturing index slipped to 15.2 in January from 22.5 in December. The index showed shipments, new orders, and employment expanded in factories in the region, but at a slower pace than in December.

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.

At the MCX, gold prices for February delivery closed lower by Rs 151 (0.9%) at Rs 16,529 per ten grams. Prices rose to a high of Rs 16,690 per 10 grams and fell to a low of Rs 16,365 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 522 (1.9%) lower at Rs 27,247/Kg. Prices opened at Rs 27,853/kg and fell to a low of Rs 27,055/Kg during the day's trading.

Crude keeps sliding down

Prices drop despite falling inventory

Crude oil prices dropped by more than 2% once again on Thursday, 21 January 2010. Prices fell despite a drop in crude inventories for last week and as the dollar headed up strongly.

On Thursday, crude-oil futures for light sweet crude for March delivery closed at $76.08/barrel (lower by $1.66 or 2.1%). Crude ended last week lower by 5.7%. On a year to date basis till date, crude is lower by 6%.

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. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 50% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

In the weekly inventory report, the EIA reported today that crude inventories fell by 471,000 barrels in the week ended 15 January 2010. Market was expecting the report to show a build up of 2 million of crude inventories.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose on concerns that Greece and other countries might have problems repaying their loans. The dollar also strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but are port said that it had asked several banks to stop issuing loans.

Among economic reports expected for the day, the Conference Board in US reported on Thursday, 21 January 2010 that leading U.S. economic indicators increased 1.1% in December 2009. Also, the Philadelphia Fed said its manufacturing index slipped to 15.2 in January from 22.5 in December. The index showed shipments, new orders, and employment expanded in factories in the region, but at a slower pace than in December.

Earlier during the week, in the latest report, the Organization of the Petroleum Exporting Countries said that world oil demand is forecast to grow by 800,000 barrels a day this year to average 85.1 million barrels a day, representing no major change from last month's forecast.

Paris based, IEA, left its forecasts for global oil demand for 2010 virtually unchanged in its latest monthly report last week. It forecasts demand of 86.3 million barrels a day in 2010, up 1.7%, or 1.4 million barrels a day higher than 2009.

Also on Thursday, natural gas for February delivery ended up 12.4 cents at $5.62 per million British thermal units. It earlier rose to a high of $5.74, with traders anticipated a large drop due to cold weather in the U.S. The EIA reported today that gas in storage stood at 2,607 billion cubic feet in the week ended 15 January2010, a drop of 245 billion cubic feet from the prior week.

At the MCX, crude oil for February delivery closed Rs 56 (1.6%) lower at Rs 3,536/barrel. Natural gas for January delivery closed higher by Rs 4.1 (1.6%) at Rs 258.2/mmbtu.

Foreign funds step up selling

Outflow of Rs 569.60 crore on 21 January 2010

Foreign funds stepped up selling on the bourses pulling out a net Rs 569.60 crore on Thursday, 21 January 2010, compared with Rs 32.30 on Wednesday, 20 January 2010.

FII outflow of Rs 569.60 crore on 21 January 2010 was a result of gross purchases Rs 2698.60 crore and gross sales Rs 3268.10 crore. The secondary equity market sales totaled Rs 566.80 crore which was a result of gross purchases Rs 2694.70 crore and gross sales Rs 3261.50 crore. The BSE 30-share Sensex lost 423.35 points or 2.42% to 17,051.14 that day on disappointing Q3 results from frontline companies.

There was an outflow of Rs 2.80 crore in the category 'primary market & others', which was a result of gross purchases Rs 3.80 crore and gross sales Rs 6.60 crore.

FII inflow in January 2010 totaled Rs 6543.20 crore. FII had bought equities worth Rs 11,067.20 crore in December 2009. FII inflow in the calendar year 2009 was Rs 84,258 crore.

There are a total of 1,702 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Financial News Flash

Reliance Profit Beats Estimates as Natural Gas Sales Counter Refining Drop Reliance Industries Ltd., India’s biggest company by market value, reported its first profit increase in more than a year as higher natural gas sales outweighed lower earnings from processing oil.

Sensex Index Completes Biggest Weekly Decline in 12 on Credit, GDP Outlook Indian stocks fell, driving the benchmark index to its biggest weekly loss in almost three months, as Morgan Stanley said “upside risks” in growth and inflation may force the central bank to raise interest rates.

Emerging-Market Stocks Slide, Heading for Worst Weekly Fall Since October Emerging-market stocks fell, heading for their steepest weekly decline since October, as commodity prices dropped amid concern higher interest rates in China and proposed U.S. banking reforms will slow economic recovery.

Tata Steel, NMDC Sign Agreement to Acquire Mines and Build Steel Plants Tata Steel Ltd. signed an agreement with NMDC Ltd., India’s largest iron-ore producer, to acquire mines and set up steel plants, Tata, the nation’s biggest steelmaker, said in a statement to the Bombay Stock Exchange today.

Turnover on Commodity Exchanges May Rise 43% on Higher Prices, Volumes Turnover on commodity exchanges in India, the world’s biggest gold consumer, may rise 43 percent to a record this year on higher prices and volumes, the industry regulator said.

India Rules Out Curbs on Soybean Futures Trading to Cool Domestic Prices India, Asia’s biggest soybean meal exporter, ruled out curbs on futures trading in the oilseed to cool prices and stop a decline in livestock feed shipments.

Lodha Developers May Begin $605 Million Sale of Stock in India Next Month Lodha Developers Ltd. may have its initial public offering of shares as early as Feb. 8, managing director Abhisheck Lodha said.

Anil Ambani's Reliance Asset Sets up Malaysia Unit to Tap Shariah Market Indian billionaire Anil Ambani’s Reliance Capital Ltd., owner of the nation’s largest mutual fund manager by assets, set up a Malaysian unit to serve as a global hub for Shariah-compliant financial products.

Government Bonds Complete Best Week in Two Months on Interest Rate Outlook India’s 10-year bonds completed their best week in two months on speculation slowing food inflation will encourage the central bank to refrain from raising benchmark interest rates at a Jan. 29 policy meeting.

Sugar May Jump 20% in First Half on India Demand, Top Thai Exporter Says Sugar futures may climb 20 percent by June, extending the rally to the highest level since November 1980, as global demand exceeds supply, said Thai Sugar Trading Corp., the country’s top exporter.

JPMorgan, Goldman May Be Forced to Shed Buyout Units Under Obama Proposal JPMorgan Chase & Co. and Goldman Sachs Group Inc. may have to sell some private-equity businesses and stop investing in buyouts under a proposal by President Barack Obama to limit bets made by banks with their own capital.

General Electric Profit Exceeds Analysts' Estimates as Order Backlog Rises General Electric Co.’s fourth- quarter profit exceeded analysts’ estimates as the order backlog rose and the company benefited from a tax gain and cost-cutting efforts including job reductions.

Bank Stocks, Dollar Fall on Obama Plan; Emerging Markets, Greek Bonds Drop Financial stocks fell and the dollar weakened on concern President Barack Obama’s plan to rein in banks will dent U.S. earnings. Emerging-market shares dropped for a third day on speculation China will raise interest rates.

Corporate Spreads Widen, Boosting Yield for Morgan Stanley: Credit Markets The rally in corporate bonds that drove U.S. borrowing costs to two-year lows is sputtering after President Barack Obama unveiled plans to rein in trading by banks and concerns about the economy grew.

Obama's `Unilateral' Bank Plan Shows Lack of Global Coordination on Rules President Barack Obama’s plan to curb proprietary trading shows banking regulations are being implemented unilaterally, not on the global scale lenders urged, according to lawyers.

McDonald's Earnings Beat Analysts' Estimates as Global Sales Increase 2.3% McDonald’s Corp., the world’s largest restaurant company, reported fourth-quarter earnings that topped analysts’ estimates as global sales at established stores increased 2.3 percent.

Terror Attacks Anticipated in 2010 Fail to Alter Investing in Global Poll Most investors say a major terrorist attack is likely this year, though they’re not changing investment strategies as a result.

source: Bloomberg