Reveal ULIP commission: IRDA to insurers

Insurance regulator IRDA has asked life insurers to make public the commission they pay to agents for unit-linked products from investors money, absence of which has been decried by mutual funds as a disadvantage. 

"...it has been decided to disclose the commission or brokerage payable to an agent or broker explicitly...from enhanced transparency view point," the Insurance Regulatory and Development Authority (IRDA) said in a circular. 

The move comes at a time when IRDA is engaged in a public and legal battle with market regulator Sebi over who controls unit-linked products. 

Insurance companies, by and large, welcomed the decision saying the new rule, effective from July one this year, will bring about more transparency by providing prospective policy holders clear information about the amount that has been collected from them as brokerage or commission. 

Mutual Fund industry watchers said now it is up to the investors to decide which product to choose from. 

Axis Mutual Fund Managing Director Rajiv Anand said, "Talking about mutual funds we have got complete transparency when it comes to the cost or purchase of a mutual fund product. 

Now it's up to the consumers to choose from various products in the market." 

Insurance industry experts said the IRDA move will enable investors to better assess various products. 

Commenting on IRDA's move, Metlife India Insurance company Managing Director Rajesh Relan said, "It is essential that investors are fully aware of the key components of the product pricing, which includes mortality charges and the commission." 

"We are maturing as an industry and IRDA's decision will further help establish insurance products as a viable long-term investment option," he said. 

The IRDA-Sebi turf war was triggered, apparently after the Mutual Funds industry complained to Sebi that huge commissions paid by ULIPs to agents put them at a disadvantageous position. Agents push ULIPs, rather than MFs as they get huge commission from these insurance products. 

Sebi had banned entry load paid by investors while purchasing mutual funds schemes. These funds earlier used to pay commission to agents from the entry load. 

The ban on entry load virtually dried-up the source of commission for mutual fund agents, forcing them to shift to selling ULIPs. 

However, IRDA too had earlier capped the commission charges on fund management between 2.25 per cent to three per cent of earnings from these schemes. 

About 7.03 crore Ulip polices involving a total premium of Rs 90,645 crores were in force in 2008-09. As many as 16.7 lakh policies were sold with a premium of Rs 44,611 crores during April-February 2009-10. 

On the other hand, mutual funds have Assets Under Management of over Rs seven lakh crore. 

Aviva India CEO and MD T R Ramachandran said, "With the overall cap on charges, earlier this year, ULIPs have become even more transparent and favourable for customers. We welcome this announcement by the regulator on disclosure of commissions as this will increase customer confidence." 

As the row between mutual funds and ULIPs deepened, Sebi earlier this month sent notices to 14 life insurers and later banned them from further raising money from ULIPs, unless they register themselves with it. 

However, IRDA asked insurers to ignore the Sebi order and continue with business as usual.

Amid the conflicting orders, the Finance Ministry persuaded the two regulators to jointly seek legally binding order from court over their jurisdiction over ULIPs. Till then, status quo ante was restored. 

Sebi later asked insurers not to issue fresh ULIPs after April nine, when its first order was issued.

Big drop for crude

Prices end lower as euro zone problems persist 

Crude oil prices ended lower at Nymex on Tuesday, 27 April 2010. Downgrade of Greek and Portuguese debt by Standard & Poor's led to ignition of euro zone problems once again refueling demand concerns of crude in coming months. 

On Tuesday, crude-oil futures for light sweet crude for June delivery closed at $82.44/barrel (lower by $1.76 or 2.1%). During intra day trading, crude fell to a low of $82.07. Last week, crude ended higher by 0.5%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 2.9%. 

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 153% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

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

Ratings agency Standard & Poor's cut Portugal's debt two notches to A- and Greece's debt three notches to junk, a territory usually associated with the lowest ring of emerging markets. Portugal's and Greece's ratings downgrade comes on top of months of worry over Greece's fiscal position and concerns that other countries in the periphery of the euro zone might also be suffering from the same ailments. 

Other energy products followed crude oil lower on Tuesday. Gasoline for May delivery declined a penny, or 0.6%, to settle at $2.32 a gallon. 

On Tuesday, natural gas for May delivery lost 5 cents, or 1.1%, to end at $4.21 per million British thermal units. 

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

At the MCX, crude oil for May delivery closed lower by Rs 44 (1.2%) at Rs 3,692/barrel. Natural gas for May delivery closed at Rs 194.6, higher by Rs 0.7 (0.4%).

Precious metals end mixed

Gold shines but silver turns pale 

Precious metal prices ended mixed on Tuesday, 27 April 2010 at Comex. Downgrade of Greek and Portuguese debt by Standard & Poor's led to ignition of euro zone problems once again. Gold ended higher but silver dropped. However, a strong dollar restricted yellow metals' gains. 

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 June delivery ended at $1,162.2 an ounce, higher by $8.20 (0.7%) an ounce on the New York Mercantile Exchange. Earlier during the day, it rose to a high of $1,165.3. Last week, gold ended higher by 1.5%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 5.9%. 

On Tuesday, May Comex silver futures ended lower by 22 cents (1.2%) at $18.11 an ounce. Last week, silver lost 2.9%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.5%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.7%. Portugal's and Greece's ratings downgrade comes on top of months of worry over Greece's fiscal position and concerns that other countries in the periphery of the euro zone might also be suffering from the same ailments. 

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

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

At the MCX, gold prices for June delivery closed higher by Rs 165 (0.98%) at Rs 16,937 per ten grams. Prices rose to a high of Rs 16,950 per 10 grams and fell to a low of Rs 16,726 per 10 grams during the day's trading. 

At the MCX, silver prices for May delivery closed Rs 171 (0.61%) lower at Rs 27,559/Kg. Prices opened at Rs 27,717/kg and fell to a low of Rs 27,504/Kg during the day's trading.

Asian markets bleed as Greek wounds hurt

Stocks drop across the world after Greece's debt gets downgraded to junk and Portugal's ratings are slashed 

Asian stocks stumbled today as the Greek tragedy continued to act as the Achilles heel for the global markets. There are serious worries on the finances of the other troubled nations in Eurozone now and the current recovery in the world economy is feared to slow down amid worsening conditions on the sovereign debt front. Concerns about Europe, which remains the largest market for Asian exports, increased after Standard & Poor's, the rating agency, downgraded Greece's debt to junk status yesterday and hit Portugal's rating with a two-notch cut. 

Europe may have to turn to the dreadful option of on debt selling in case the worst fears regarding PIIGS come true. The European and American markets fell sharply overnight on the same concerns, with the Dow Jones industrial average dropping 1.9 % to 10,991.99, its worst loss in three months. Commodity prices and Euro declined sharply today, leading to a broad pressure on resources. In a bid to stem the panic in Greece, the country's security regulator has temporarily banned short selling on the Athens stock exchange until June 28. The market has lost around 25% of its value in the last five weeks. 

The Japanese stocks plunged following these cues. Weak closing in European and US markets in the previous session and negative trading across other markets in Asian region also impacted market sentiment, with almost all the stocks ended in negative territory. Traders preferred to adopt a wait-and-watch approach ahead of national holiday tomorrow and FOMC meeting later in the day in the U.S. The benchmark Nikkei 225 Index plunged 287.87 points, or 2.6 %, to 10,925, while the broader Topix index of all First Section issues fell 19.99 points, or 2.0%, to 978.

On the economic front, a report released by the Ministry of Economy, Trade and Industry revealed that retail sales in the country surged up 4.7% year-on-year in March, coming in at 12.286 trillion yen. That marked the third straight month of increase, and it beat forecasts for a 3.7 % annual increase following the 4.2 % expansion in February.

The Australian market ended in negative territory, reacting to the downgrading of sovereign credit ratings of Greece and Portugal. Weak closing on Wall Street in the previous session and an unexpected increase in consumer inflation for the quarter and lower commodity prices also weighed on market. The benchmark S&P/ASX200 Index declined 57.20 points, or 1.17 % to close at 4,823, while the All-Ordinaries Index ended flat at 4,854, representing a loss of 59.10 points, or 1.20 %.

A report released by the Australian Bureau of Statistics revealed that consumer prices in the country rose at a stronger than expected pace during the first three months of the year, which may force the central bank to hike the cash rate again when its policy board meets next week. The data comes close on the heels of the release of the producer price inflation report, which also showed a bigger than expected increase in prices. According to the report, consumer price index gained 2.9% year-on-year in the March quarter. This follows a 2.1% increase in prices in the December quarter.

China's key stock index edged down 0.3 % to a fresh six-month closing low, although bank and property shares stabilized after sliding on Tuesday on concerns over lenders' fundraising plans and further steps to curb property speculation. The Shanghai Composite Index ended the day at 2,900.3 points, extending the index's 2.1 % drop the previous session on a media report of a possible share issue by China Construction Bank. Stocks in Hong Kong's dropped 1.2 %. 

In other markets, South Korea's Kospi index fell 1.2% to 1,728.25 while New Zealand's NZX 50 ended down 0.3% and Philippine stocks lost 0.7%.

In Mumbai, the key benchmark extended losses for the second straight day as world stocks reeled from rating downgrades on Greece and Portugal. The BSE 30-share Sensex was provisionally down 285.27 points or 1.61%, off close to 240 points from the day's high and up close to 60 points from the day's low. Metal and realty stocks led the decline. All the sectoral indices on BSE were in the red. Index heavyweight Reliance Industries (RIL) slumped more than 4%, extending recent losses triggered by disappointment from Q4 result. India's largest mobile services provider by sales Bharti Airtel dropped in volatile trade as Q4 net profit fell. 

Light sweet crude oil futures for June delivery have a range bound session today but the undertone was primarily bearish on an across the board sell off in the world stocks. The counter edged up above $82 per barrel but turned lower soon and was last seen quoting at $82.27 a barrel in electronic trading, down $0.23 per barrel from previous close at $82.44 a barrel in New York on Tuesday.

Birla Sun Life MF Declares Dividend For Pure Value Fund

Record date for dividend is 30 April 2010 

Birla Sun Life Mutual Fund has announced the declaration of dividend on the face value of Rs. 10 per unit under dividend option of Birla Sun Life Pure Value Fund. The record date for dividend has been fixed as 30 April 2010. 

The quantum of dividend will be 10% (Rs.1 per unit) as on the record date. The NAV of the scheme was at Rs. 15.8356 as on 22 April 2010. 

Birla Sun Life Pure Value Fund is an close ended diversified equity Scheme with a maturity of three years. Upon Maturity, the scheme shall automatically be converted into an open ended scheme, which has the investment objective to generate income by investing predominantly in equity and equity related securities by following value investing strategy.

Mutual funds extend selling spree in April 2010

Net outflow of Rs 1638 crore this month so far 

Mutual funds sold shares worth a net Rs 28.80 crore on Monday, 26 April 2010, compared to purchases of Rs 1.80 crore on Friday, 23 April 2010. 

The net sales of Rs 28.80 crore on 26 April 2010 was a result of gross purchases Rs 418.90 crore and gross sales Rs 447.70 crore. The BSE 30-share Sensex rose 51.08 points or 0.29% to 17,745.28 on that day. 

Mutual funds have sold shares worth a net Rs 1638 crore this month (till 26 April 2010), extending last month's selling spree. Mutual funds had dumped equities worth a net Rs 4082.30 crore in March 2010.

Escorts Mutual Fund has declared dividend's

Growth Plan 

 

Record date for dividend is 4 May 2010 

Escorts Mutual Fund has declared dividend on the face value of Rs. 10 per unit under dividend option of Escorts Growth Plan. The record date for dividend is 4 May 2010. 

The quantum of dividend will be Rs 2.00 per unit as on the record date. The scheme recorded NAV of Rs 14.8990 per unit as on 26 April 2010. 

Escorts Growth Plan has the investment objective to generate capital appreciation by investing predominantly in a well diversified portfolio of equity shares with growth potential. 

Balanced Fund 

Record date for dividend is 4 May 2010 

Escorts Mutual Fund has declared dividend on the face value of Rs. 10 per unit under dividend option of Escorts Balanced Fund. The record date for dividend is 4 May 2010. 

The quantum of dividend will be Rs 2.00 per unit as on the record date. The scheme recorded NAV of Rs 14.0055 per unit as on 26 April 2010. 

Escorts Balanced Fund has the investment objective to generate long term capital appreciation and current income from a portfolio of equity and fixed income securities.

Tax Plan 

Record date for dividend is 4 May 2010 

Escorts Mutual Fund has declared dividend on the face value of Rs. 10 per unit under dividend option of Escorts Tax Plan. The record date for dividend is 4 May 2010. 

The quantum of dividend will be Rs 1.00 per unit as on the record date. The scheme recorded NAV of Rs 11.6336 per unit as on 26 April 2010. 

Escorts Tax Plan has the investment objective to generate capital appreciation by investing predominantly in a well diversified portfolio of equity shares with growth potential. 

Opportunities Fund 

Record date for dividend is 4 May 2010 

Escorts Mutual Fund has declared dividend on the face value of Rs. 10 per unit under dividend option of Escorts Opportunities Fund. The record date for dividend is 4 May 2010. 

Escorts Opportunities Fund will distribute up to Rs 0.0981 per unit under dividend option on record date of 4 May 2010. The NAV for dividend option was at Rs 10.3108 per unit as on 26 April 2010. 

Escorts Opportunities Fund has the investment objective to generate long term capital appreciation by predominantly moving investments in a portfolio of equity and equity related securities amongst different sectors, present or future, expected to show high earnings such as technology sector, media sector, entertainment sector, communications Sector, fmcg sector, pharmaceuticals sector, cyclical sector, real estate sector, space sector, cybercity sector etc.

Precious metals add more glitter

Prices rise on strong demand hopes 

Precious metal prices ended higher on Wednesday, 21 April 2010 at Comex. Better than expected earning reports in most cases pointed towards higher demand for 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 June delivery ended at $1,148.8 an ounce, higher by $9.6 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 2.5%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 4.8%. 

On Wednesday, May Comex silver futures ended higher by 25 cents (1.4%) at $18.11 an ounce. Last week, silver lost 3.7%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 5.9%. 

Among earning reports at Wall Street, Boeing, McDonald's and United Technologies - all bested earnings expectations for the latest quarter. Fellow Dow component AT&T also reported an upside earnings surprise. Apple reported an upside earnings surprise after the prior session's close. 

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

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

At the MCX, gold prices for June delivery closed higher by Rs 101 (0.6%) at Rs 16,728 per ten grams. Prices rose to a high of Rs 16,759 per 10 grams and fell to a low of Rs 16,621 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 317 (1.2%) higher at Rs 27,531/Kg. Prices opened at Rs 27,230/kg and rose to a high of Rs 27,560/Kg during the day's trading.

Crude ends marginally lower

Prices drop as crude and gasoline inventories rise 

Crude oil prices ended marginally lower at Nymex on Wednesday, 21 April 2010. Prices dropped after energy department reported unexpected rise in crude and gasoline inventories for last week. Better than expected earning reports at Wall Street tried to curtail crude's losses. 

On Wednesday, crude-oil futures for light sweet crude for June delivery closed at $83.68/barrel (lower by $0.17 or 0.2%). Last week, crude ended lower by 1.2%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 4.2%. 

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 155% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

On Wednesday, EIA reported larger-than-expected jumps in oil and gasoline inventories for last week. The report detailed that crude oil inventories rose 1.9 million barrels in the week ended 16 April. Gasoline stockpiles rose 3.6 million barrels versus expectations of a 100,000-barrel gain. Distillate stockpiles added 2.1 million barrels, also above expectations of 840,000 barrels. 

Among earning reports at Wall Street, Boeing, McDonald's and United Technologies - all bested earnings expectations for the latest quarter. Fellow Dow component AT&T also reported an upside earnings surprise. Apple reported an upside earnings surprise after the prior session's close. These earning reports tried to put a brake on crude's drop.

Among other energy related products on Wednesday, June heating oil closed up 2 cents, or 1.1%, to $2.23 a gallon. 

On Wednesday, natural gas for June delivery fell 2 cents, or 0.6%, to $4.04 per million British thermal units, and the front-month May contract slid 2 cents, or 0.5%, to $3.96 per million British thermal units. 

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

At the MCX, crude oil for April delivery closed lower by Rs 13 (0.34%) at Rs 3,740/barrel. Natural gas for April delivery closed at Rs 178.1/mmbtu, higher by Rs 1.9 (1.07%).

Primary article inflation at 14.14%

Growth in food and non-food prices 

The WPI for primary article for the week ended 10 April 2010 rose by 0.6% to 289.7 from 288.0 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at 14.14% for the week ended 10 April 2010 as compared to 13.88% for the previous week and 6.42% during the corresponding week 11 April 2009. 

The index for 'Food Articles' group rose by 0.7% to 293.3 from 291.4 for the previous week due to higher prices of fruits & vegetables (3%), fish-marine (2%) and condiments & spices, arhar and moong (1% each). However, the prices of wheat and eggs (1% each) declined. 

The index for 'Non-Food Articles' group rose by 0.5% to 255.4 from 254.1 for the previous week due to higher prices of groundnut seed and castor seed (3% each) and raw silk, sunflower and copra (1% each). However, the prices of gingelly seed (5%) and linseed (1 %) declined.

The index of fuel and power group rose by 0.1% to 363.2 from 362.7 for the previous week due to higher prices of light diesel oil, petrol and high-speed diesel oil (1% each).However, the prices of furnace oil (1%) declined. 

The annual rate of inflation calculated on point-to-point basis stood at 12.45% as compared to 12.43% for the previous week and -5.75 % during the week ended 11 April 2009.

FIIs step up buying

Inflow of Rs 264.70 crore on 21 April 2010 

Foreign institutional investors (FIIs) bought shares worth a net Rs 264.70 crore on Wednesday, 21 April 2010, much higher than Rs 32.50 crore on Tuesday, 20 April 2010. 

FII inflow of Rs 264.70 crore on 21 April 2010 was a result of gross purchases Rs 2738.40 crore and gross sales Rs 2473.70 crore. There was an inflow of Rs 267.30 crore into secondary equity markets which was a result of gross purchases Rs 2737.20 crore and gross sales Rs 2469.90 crore. The BSE Sensex rose 11.98 points or 0.07% to 17,472.56 on that day. 

There was an outflow of Rs 2.60 crore in the category 'primary market & others', which was a result of gross purchases Rs 1.20 crore and gross sales Rs 3.80 crore. 

FII inflow in April 2010 totaled Rs 5,249.10 crore (till 21 April 2010). FIIs had bought equities worth Rs 19,928.20 crore in March 2010. FII inflow in the calendar year 2010 totaled Rs 25,893.50 crore (till 21 April 2010). 

There are a total of 1,704 foreign funds registered with the Securities & Exchange Board of India (Sebi).

DSP BlackRock MF Launches Focus 25 Fund

DSP BlackRock Mutual Fund announced the launch of DSP BlackRock Focus 25 Fund. This is an open ended equity growth scheme investing largely in companies, which are amongst the top 200 companies by market capitalisation. The portfolio will limit exposure to companies beyond the top 200 companies by market capitalization to 20% of the net asset value. The Scheme will normally hold equity and equity-related securities including equity derivatives, of upto 25 companies. The scheme will open for subscription from 23 April 2010. 

The scheme will have a concentrated portfolio adopting a highly flexible investment approach. Concentrated portfolios are often the result when managers seek to sharpen the focus with regard to stock selection and therefore stock weightage in the portfolio. 

What is rationale for launching a fund with this strategy?

 

In a market which has risen significantly over the last one year, there has been significant performance divergence not only among sectors but also amongst stocks within these sectors. This highlights the fact that besides sector selection, stock selection is extremely important. 

A significant percentage of risk paring on account of diversification can be achieved with relatively fewer stocks, provided they are not of a similar type. While adding more stocks increases the degree of diversification, the ability of the scheme to generate relatively higher returns recedes as the number of stocks in the portfolio increases. 

Equity schemes managed by us have delivered consistent long term performance which is a testimony to the stock selection skills of our investment team. The concentrated portfolio will enable the fund manager to sharpen his focus with regard to stock selection & portfolio construction and allows investors to benefit from the fund manager's stock selection ability. 

Speaking to media Mr. S. Naganath said “We are pleased to announce the launch of DSP BlackRock Focus 25 Fund and believe that this fund will appeal greatly to investors who are seeking a concentrated equity portfolio. 

Scheme Features

 

The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. 

The scheme will allocate 65% to 100% of assets in equity and equity related securities, which are amongst the top 200 companies by market capitalization. It would further allocate up to 35% of assets in debt securities, money market securities and cash & cash equivalents. 

Growth and dividend reinvest options are available under the scheme. 

Minimum investment amount is Rs 5000 and in multiples of Re 1 thereafter. 

Entry load charge will be nil for the scheme. The exit load charge will be 1% for holding period less than 12 months and nil for holding period above & up to 12 months. 

The schemes performance will be benchmarked against BSE Sensex. 

The scheme will be managed by Apoorva Shah.

Birla Sun Life Asset Management Company appoints head for its offshore asset management business

Birla Sun Life Asset Management Company, the mutual fund arm of the Aditya Birla Financial Services Group (ABFSG), a leading financial conglomerate in India, has appointed Anuradha (Anu) Sahai as the Chief Executive Officer of Aditya Birla Sun Life Asset Management Company Pte Ltd., Singapore, as part of its plans to expand its asset management business outside India. As a first step, she will lead their focus to raise offshore investments into India.

In her new role, Ms Anu Sahai will lead business strategy for overall growth of ABSLAMC, Singapore, a wholly owned subsidiary of Birla Sun Life Asset Management Company Limited, which is a Joint Venture Asset Management company between Sun Life of Canada and Aditya Birla Nuvo. She will also help Birla Sun Life Asset Management Company realize its goal of being a world-class global Asset Management company. Anu will report to the CEO of Birla Sun Life Asset Management Company, India. 

“Given the large opportunity to attract monies into India, the Aditya Birla Financial Services Group is looking to establish a footprint outside India and Ms Anu Sahai's wide experience and knowledge of the global investment markets would be a great asset in establishing ABSLAMC (Singapore) as a trusted and leading player in Asia as well as globally. Her deep insights and strong relationships honed over the last 18 year with investors will help in launching appropriate products and services for these markets and customers. ” said Mr. A. Balasubramanian, CEO, Birla Sun Life Asset Management Company Limited. 

Anu Sahai is an accomplished professional with over 18 years of global investment experience across alternative and traditional asset classes in the US and Asia. She was the founder of Anew Capital Management LLC and Portfolio Manager of the Anew India Opportunity Master Fund, a multi-strategy India fund. She received a Rising Hedge Fund Stars of 2008 award from Institutional Investor. Anu has had successful stints in the financial services industry, including with ING Investment Management, where she managed equities, high yield and convertibles portfolios. Anu is a renowned speaker at many conferences across the globe for her insights into the Indian market as well as a specialist on the Indian/Asian convertible bond market. 

Commenting on her new role, Ms Sahai said, “I am delighted to take over this new role and look forward to spreading the India story and the Birla Sun Life AMC offerings to newer markets, while creating value for investors and stakeholders. She further added, “The immediate plan is to leverage our strong India investment capability. We will collaborate closely with our group companies and our joint venture partner to leverage synergies and opportunities within and outside India. Our intent is to build a recognizable global brand.” ABSLAMC is intending to apply for a Capital Markets license from the Monetary Authority of Singapore to carry out fund management activities under the Securities and Futures Act.

FIIs in selling mode

Outflow of Rs 475.70 crore on 19 April 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 475.70 crore on Monday, 19 April 2010, as against an inflow of Rs 363.70 crore on Friday, 16 April 2010. 

FII outflow of Rs 475.70 crore on 19 April 2010 was a result of gross purchases Rs 1747.60 crore and gross sales Rs 2223.30 crore. There was an outflow of Rs 475.50 crore from secondary equity markets which was a result of gross purchases Rs 1746.70 crore and gross sales Rs 2222.20 crore. The BSE Sensex fell 190.50 points or 1.08% to 17,400.68 on that day.

There was an outflow of Rs 0.20 crore in the category 'primary market & others', which was a result of gross purchases Rs 0.90 crore and gross sales Rs 1.10 crore. 

FII inflow in April 2010 totaled Rs 4951.80 crore (till 19 April 2010). FIIs had bought equities worth Rs 19928.20 crore in March 2010. FII inflow in the calendar year 2010 totaled Rs 25,596.20 crore (till 19 April 2010). 

There are a total of 1,706 foreign funds registered with the Securities & Exchange Board of India (Sebi).

FIIs in selling mode

Outflow of Rs 475.70 crore on 19 April 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 475.70 crore on Monday, 19 April 2010, as against an inflow of Rs 363.70 crore on Friday, 16 April 2010. 

FII outflow of Rs 475.70 crore on 19 April 2010 was a result of gross purchases Rs 1747.60 crore and gross sales Rs 2223.30 crore. There was an outflow of Rs 475.50 crore from secondary equity markets which was a result of gross purchases Rs 1746.70 crore and gross sales Rs 2222.20 crore. The BSE Sensex fell 190.50 points or 1.08% to 17,400.68 on that day.

There was an outflow of Rs 0.20 crore in the category 'primary market & others', which was a result of gross purchases Rs 0.90 crore and gross sales Rs 1.10 crore. 

FII inflow in April 2010 totaled Rs 4951.80 crore (till 19 April 2010). FIIs had bought equities worth Rs 19928.20 crore in March 2010. FII inflow in the calendar year 2010 totaled Rs 25,596.20 crore (till 19 April 2010). 

There are a total of 1,706 foreign funds registered with the Securities & Exchange Board of India (Sebi).

RBI raises CRR, repo and reverse repo rate by 25 bps each

GDP growth forecast placed at 8.0% for 2010-11 

Reserve Bank of India (RBI) has announced the Annual Monetary Policy Statement for 2010-11. It has raised the repo rate, the rate at which it lends short term funds to scheduled banks, by 25 bps to 5.25%. Meanwhile, the reverse repo rate, the rate at which RBI borrowing funds from banks or absorb addition liquidity from the banking system, has also been hiked by 25 bps to 3.75%. 

Further, RBI has also increased the CRR, the percentage of aggregate deposits that banks has to park with RBI, by 25 bps to 6.0%. 

The RBI had already raised CRR by 75 bps on last policy review announced on 29 January 2010. On 19 March, RBI had suddenly announced the hike in repo and reverse repo rate by 25 bps each. 

In its report on ‘Macroeconomic and Monetary Developments in 2009-10' released ahead of today's policy meet, on 19 April 2010, RBI had said, “While recovery in private demand needs to be stronger to reinforce the growth momentum, already elevated headline inflation suggests that the weight of policy balance may have to shift to containing inflation, since high inflation itself will dampen recovery in growth'. 

On balance, under the assumption of a normal monsoon and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand, for policy purposes the baseline projection of real GDP growth for 2010-11 is placed at 8.0% with an upside bias.

Mutual funds continue selling

Outflow of Rs 119.50 crore on 19 April 2010 

Mutual funds (MFs) sold shares worth a net Rs 119.50 crore on Monday, 19 April 2010, lower than Rs 283.90 crore on Friday, 16 April 2010. 

The net outflow of Rs 119.50 crore on 19 April 2010 was a result of gross purchases Rs 411.30 crore and gross sales Rs 530.80 crore. The BSE Sensex fell 190.50 points or 1.08% to 17,400.68 on that day. 

MFs sold shares worth net Rs 1946.10 crore in April 2010 (till 19 April 2010). MFs had sold shares worth net Rs 4,082.30 crore in March 2010.

Base metals hammered

Prices drop on economic concerns and strong dollar

 

Copper prices ended lower at Comex on Friday, 16 April 2010. Negative news regarding Goldman Sachs rocked Wall Street and all commodities tumbled on Friday. The strong dollar added further woes. The stronger than expected report on the housing sector failed to push prices higher. 

At USA, copper futures for July delivery ended lower by 8.55 cents (2.4%) at $3.5355 a pound on Friday. For the week, prices lost 1.5%. In March, copper gained 7.5%. Copper gained about 6% for the first quarter, buoyed by data from the U.S. and other countries reinforced expectations that the global economic recovery was on track. On a year to date basis, in 2010, copper is higher by 4.6%. 

Prices have almost doubled in the past twelve months due to higher imports from China. Copper ended FY 2009 higher by 140%. 

On Friday, at LME, copper for delivery in three months ended lower by $185 (2.3%) at $7,760. Prices had crossed the $8,000 mark for first time since 2008 last Tuesday, 6 April. On 3 July, 2008, prices had touched an all time intra day high of $8,940. 

Copper slid early after the government in China raised minimum rates on mortgage loans and down payments for second homes, saying 'more forceful' steps are needed to cool speculation after property prices rose at a record pace in March. The metal also fell as the dollar advanced as much as 0.5% against a basket of six major currencies, including the euro, curbing purchases of commodities as alternative assets. 

Wall Street was stunned on Friday after news hit the wires that the U.S. Securities and Exchange Commission has filed a civil suit accusing Goldman Sachs and one of its vice presidents of defrauding investors in connection with a mortgage derivative. As per reports, a key focus of these worries may be Paulson & Co., which is enmeshed in a SEC lawsuit againstGoldman Sachs but hasn't been charged. The hedge fund giant is one of the world's biggest investors in gold. If Paulson investors try to redeem from the firm's hedge funds, the firm might be forced to unwind some of its gold positions, pressuring prices. 

Among economic reports for the day, the Commerce Department in US reported on Friday, 16 April 2010 that housing starts in US rose 1.6% in March to a seasonally adjusted 626,000 annualized units. The figure was stronger than the 610,000 expected. In addition, February starts were revised higher to 616,000 from the 570,000 previously reported. This was up 1.1% from the prior month. The initial estimate had been a 5.9% drop. As a result of the revisions, starts have risen for three straight months and are now at their highest level since November 2008. 

Also, the preliminary Consumer Sentiment Survey for April from the University of Michigan came in at 69.5, which was not only below the 75.0 that had been widely expected, but it was also the worst reading since November. 

Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user. 

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%. 

Among other metals traded in the LME on Friday, lead ended 1% lower at $2,365 a ton and zinc ended 1% lower at $2,495.5 a ton. Nickel ended 2.8% lower at $26,800. Aluminum ended 0.5% lower at $2,468 a ton.

FIIs continue buying

Inflow of Rs 363.70 crore on 16 April 2010 

Foreign institutional investors (FIIs) bought shares worth a net Rs 363.70 crore on Friday, 16 April 2010, slightly higher than Rs 343.10 crore on Thursday, 15 April 2010. 

FII inflow of Rs 363.70 crore on 16 April 2010 was a result of gross purchases Rs 2519 crore and gross sales Rs 2155.30 crore. There was an inflow of Rs 334.30 crore into secondary equity markets which was a result of gross purchases Rs 2481.90 crore and gross sales Rs 2147.60 crore. The BSE Sensex fell 48.08 points or 0.27% to 17,591.18 on that day. 

There was an inflow of Rs 29.40 crore in the category 'primary market & others', which was a result of gross purchases Rs 37.10 crore and gross sales Rs 7.70 crore. 

FII inflow in April 2010 totaled Rs 5,427.50 crore (till 16 April 2010). FIIs had bought equities worth Rs 19,928.20 crore in March 2010. FII inflow in the calendar year 2010 totaled Rs 26,071.90 crore (till 16 April 2010). 

There are a total of 1,706 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Weekly Scenario: Poor Market Performance Drags down Equity Funds Return

Equity Funds were not able to maintain their positive momentum as poor market sentiments had spoiled the party during the one week period ended 16 April 2010. 

ULIPS controversy and speculation that RBI will further tighten monetary policy also caused worry for the investors. There were fears that a controversy with regard to unit linked insurance plans (Ulips) will adversely impacts inflows into Ulips which are a major source of inflows into equities. On 9 April 2010, Sebi banned 14 private life insurance companies from raising funds through Ulips without its approval. But on the other hand, debt funds remained a safer avenue for investments during the week as it gained more than equity funds. 

The key market indicator Sensex and Nifty fell 1.91% and 1.85% respectively during the one week period ended 16 April 2010. BSE MidCap and BSE Small-Cap were able to limit their loss to 0.87% and 0.52%. Among the sector indices BSE Infotech gained the maximum of 3.21%, BSE Consumer Durable surged 2.27% and BSE Realty climbed 1.46%. Apart from these sector indices others witnessed loss. In the equity funds, Infotech Funds gained a maximum of 2.78%, FMCG Funds was the next biggest gainer with 0.13%. Profit booking in large cap stocks had dragged the key indices.

In the Debt Fund category Floating Rate Income Funds – Long Term climbed the maximum of 0.11%. It was followed by Short Term Income Funds and Floating Rate Income Funds – Short Term with 0.09% each. Gold ETF gained 0.37% and Arbitrage Fund gained 0.19% during the one week period ended 16 April 2010.

Equity Funds

Pharma Funds

Pharma Funds category average return fell 0.47% for one week period ended 16 April 2010. Out of 4 schemes, only 3 outperformed the category average. UTI Pharma & Healthcare Fund emerged as the top-performer on the return front. The fund posted a growth of 0.73% over the one week period SBI Magnum SFU – Pharma Fund was the worst performer in the category with a fall in return of 0.99% for the one week time period.

Banking Funds

Funds from the Banking Funds category witnessed a fall in average return by 3.03% over the one week period ended 16 April 2010. All the 7 schemes witnessed loss during the one week period. Sahara Banking & Financial Services Fund had a minimum loss of 2.12% while JM Financial Services Sector Fund had a maximum loss of 3.80%.

Tax Savings Funds 

Tax savings mutual funds also known as equity linked savings schemes (ELSS) witnessed a fall in category return by 1.14% over week period as on 16 April 2010. Escorts Tax Plan and Quantum Tax Savings Fund were the 2 schemes to witness surge in NAV while the others faced fall in NAV. Escorts Tax Plan surged by 1.22% and Quantum Tax Savings Fund climbed 0.21%. LICMF Tax Plan and Axis Tax Saver Fund were the worst performers with a fall of 2.16% and 1.97% respectively.

Index Funds

The Index Fund category average return fell by 1.83% for the week end. All the schemes in this category witnessed erosion in NAV. Benchmark S&P CNX 500 Fund and ING Nifty Plus were able to limit their losses to 1.51% and 1.66%.

FMCG Funds 

FMCG Funds category average return is 0.13% for the week end period, which has underperformed the BSE FMCG Sector which gained 0.31% during the week. Franklin FMCG Fund jumped 0.38%, ICICI Pru FMCG Fund climbed 0.32% during the week. While SBI Magnum SFU – FMCG Fund saw erosion in NAV by 0.30%.

Infotech Funds 

Funds from the Infotech Fund category posted an average return of 2.78% over the one week period ended 16 April 2010. The performance of this category has bettered the performance of the previous week. Out of 5 funds, 2 bettered the category average. ICICI Pru Technology Fund surfaced as the best performer in this category. In terms of NAV performance, the fund's NAV grew by 3.57% over the one week period. All the schemes in this category registered positive growth. Birla Sun Life New Millennium Fund was the least performer in this category with 2.04% over one week period ended 16 April 2010.

Infrastructure Funds

The average return of equity infrastructure funds declined by 1.59% over the one week period ended 16 April 2010. The NAV of all the schemes had witnessed erosion. Tata Infrastructure Fund slipped the maximum by 2.45% and Taurus Infrastructure Fund had a lower erosion of NAV by 0.07%.

Midcap Funds

Equity midcap fund category was able to limit their fall to 0.64% for the week ended 16 April 2010. SBI Magnum Midcap Fund is the top performer in this category with 5.11%. It was followed by SBI Magnum SFU - Emerging Businesses Fund, IDFC Premier Equity Fund - Plan A, DSP BR Small And Mid Cap Fund were the once with positive returns of 0.68%, 0.15% and 0.08% respectively. Worst performers in this category were Sundaram BNP Paribas Select Midcap and Sundaram BNP Paribas S.M.I.L.E Fund with a fall in return of 1.89% and 1.33% respectively.

Largecap Funds

Equity large fund category witnessed a loss of 1.47% for the week ended 16 April 2010. Escorts Growth Plan is the top performer in this category with 2.09%. It was followed by Quantum Long-Term Equity Fund with 0.21%. Worst performers in this category were Sahara Growth Fund and SBI BlueChip Fund with a loss of 2.32% and 2.29% returns respectively.

  Exchange Traded Fund (ETFs)

Gold ETFs

Gold ETF category generated an average return of 0.37% during the week ended 16 April 2010. Religare Gold Exchange Traded Fund, Kotak GOLD ETF, UTI-Gold Exchange Traded Fund, Gold BeES witnessed the highest appreciation of NAV by 0.38%.

Other ETFs:

The other ETF category lost 1.88% during the week ended 16 April 2010. Liquid BeES being the only debt ETF gained 0.08%. Bank BeES and Reliance Banking Exchange Traded Fund lost 3.14% and 3.13% respectively to be the worst performers in this category.

Hybrid Funds

Balanced Fund: Equity Oriented

Equity oriented balanced fund category average slipped down 0.88% during the week end period. Escorts Balanced Fund and Benchmark Equity & Derivatives Opportunities Fund were top performers during the week end period with 1.03% and 0.09%. LICMF Unit Linked Insurance Scheme and JM Balanced Fund were the worst performers with a fall of 1.82% and 1.60% respectively. 

Balanced Fund: Debt Oriented

Debt oriented balanced fund category average return dipped 0.06% for the one week ended 16 April 2010. Escorts Opportunities Fund emerged as the top-performer on the return front. The fund posted a growth of 1.54% over the one week period. LICMF Children Fund was the worst performer in the category with a fall in return of 1.21% for the one week time period.

Arbitrage Fund

Arbitrage Fund scaled up 0.19% over one week period ended 16 April 2010. All the schemes in this category posted positive return during the week end period. ICICI Pru Equity & Derivative Income Optimizer emerged as the top-performer on the return front. The fund posted a growth of 1.04% over the one week period. SBI Arbitrage Opportunities Fund was the worst performer in the category with a return of 0.07% for the one week time period.

Debt Funds

Gilt Funds 

Gilt Funds – Short Term category fell 0.01% and Gilt Funds – Medium & Long Term category fell 0.09% during the week. ICICI Pru Gilt Fund - Treasury and UTI G-Sec Fund - STP topped the Gilt Funds – Short Term category with 0.10% and 0.06% respectively. All the schemes under Gilt Funds – Medium & Long Term category witnessed loss in NAV for the one week period.

Income Funds 

The income funds category climbed 0.06% during the week ended 16 April 2010. IDFC SSIF - MTP - Plan A rose up 0.21% and Birla Sun Life Medium Term Plan climbed up 0.14%. It was followed by SBI Magnum Income Fund (0.13%) and Birla Sun Life short Term Opportunities (0.11%) among others. HDFC Income Fund and Tata Income Fund had seen erosion of NAV by 0.15% and 0.10% respectively during the week end period 16 April 2010.

Short Term Income Funds

Short Term Income Funds category average has grown by 0.09% during the week ended 16 April 2010. JPMorgan India Short Term Income Fund climbed up 0.19% and IDFC SSIF - STP scaled up 0.16% among others during the week. SBI Magnum NRI Investment Fund - STP and Bharti AXA Short Term Income Fund ended at the bottom of the category with 0.02% and 0.04%.

Floating Rate Income Funds

Floating Rate Income Funds – Short Term and Long Term category climbed up 0.09% and 0.11% respectively over one week period. Escorts Floating Rate Fund and SBI Magnum Floating Rate Plan-STP were the top performers with 0.10% and 0.09% respectively in Floating Rate Income Funds – Short Term. ICICI Pru Long Term Floating Rate Plan C and ICICI Pru Long Term Floating Rate Plan B were the top performers with 0.19% and 0.17% in Floating Rate Income Funds – Long Term.

Ultra Short Term Fund & Liquid Fund

Ultra Short Term Fund & Liquid Fund categories climbed up 0.08% each during the one week period ended 16 April 2010. JM Money Manager Fund - Super Plus Plan and DWS Treasury Fund - Investment Plan scaled up the maximum of 0.12% under Ultra Short Term Fund. Birla Sun Life Floating Rate - Short Term scaled up the maximum of 0.16% under Liquid Funds.

Mutual funds offload stocks worth Rs 1835.50 crore in April 2010

Outflow of Rs 292.90 crore on 16 April 2010 

Mutual funds (MFs) sold shares worth a net Rs 292.90 crore on Friday, 16 April 2010, lower than Rs 228.90 crore on Thursday, 15 April 2010. 

The net outflow of Rs 292.90 crore on 16 April 2010 was a result of gross purchases Rs 528.50 crore and gross sales Rs 821.40 crore. The BSE Sensex fell 48.08 points or 0.27% to 17,591.18 on that day. 

MFs sold shares worth net Rs 1835.50 crore in April 2010 (till 16 April 2010). MFs had sold shares worth net Rs 4,082.30 crore in March 2010.

SEBI nod must for new ULIP

A day after Finance Minister Pranab Mukherjee said that unit linked insurance plan (ULIP) sales can go on for now, capital markets regulator Securities and Exchange Board of India (SEBI) on Tuesday passed another order according to which SEBI's April 9 order, restraining sale of ULIPs, will remain applicable on new ULIPs launched after April 9.

"SEBI has decided to keep in abeyance, till further notice, the enforcement of the above directions with respect to the ULIP schemes," SEBI's quasi-judicial order said. "However, with respect to any new ULIP schemes launched after April 9, the directions mentioned in the said order will be enforced as indicated therein."

Insurers are hurting. "On an average, life insurance companies launch three to four new ULIPs every year and this will impact our fund raising and continuous activity in the market," said a senior official at an insurance company on condition of anonymity.

SEBI on Friday had passed a quasi-judicial order restraining 14 life insurance players from receiving money from investors for any product that has an investment component attached to it till the time they get registered with it.

The next day, insurance regulator Insurance Regulatory and Development Authority (IRDA) directed insurance companies to ignore the order and go ahead with the sale of ULIPs.

While IRDA and insurance companies continue to resist SEBI's quasi-judicial order, Mukherjee on Monday said that he expects all financial sector regulators to work towards the goal of no load model for the entire financial sector.

Earlier, the government-appointed High Level Co-ordination Committee on Capital Markets (HLCCM) headed by Dhirendra Swarup, former chairman, Pension Fund regulatory and Development Authority (PFRDA) submitted a report to the finance ministry, where it recommended eliminating upfront commission in a phased manner by April 2011.

Mukherjee on Monday strengthened that idea. "SEBI decision to make mutual fund advisor an agent of customer other than that of the company whose products they sell would go long way in protecting the small investor," he said.

"India could set global model for a no-load fee model for entire financial sector to ensure fair deal to all market participants. I hope all financial sector regulators would work towards this."

source: HT