Mirae Asset launches Mirae Asset Emerging Bluechip Fund

NFO period from 24 May –22 June 2010 

Mirae Asset Emerging Bluechip Fund is an open ended equity scheme. The new issue opened for subscription from 24 May 2010 till 22 June 2010. The NFO price for the fund is Rs 10 per unit. The scheme will re-open for continuous sales and repurchase on or before 21 July 2010. 

The investment objective of the scheme is to generate income and capital appreciation from a diversified portfolio predominantly investing in Indian equities and equity related securities of companies which are not part of the top 100 stocks by market capitalization and have market capitalization of atleast Rs 100 Crore at the time of investment. 

The scheme offers two options growth and dividend option. The dividend option further offers dividend payout, and dividend reinvestment facility. 

The minimum application amount under the regular plan is Rs 5000 and in multiples of Re 1 thereafter. 

The fund house seeks to raise a minimum subscription amount of Rs. 10 lakh during its New Fund Offer period. 

The fund will not charge an entry load. While, the scheme will charge 1% as exit load, if redeemed within 1 year from the date of allotment and nil, if redeemed after 1 year from the date of allotment. 

The scheme will invest up 60%-100% in Indian Equities and Equity related securities of companies, which are not part of the top 100 stocks by market capitalization and have market capitalization of atleast Rs 100 crore at the time of investment carrying high risk profile. 0%-35% in other Indian equities and equity related securities carrying high risk and 0%-35% in money market and debt instruments carrying low to medium risk. 

The scheme will be benchmarked against CNX MIDCAP Index. 

Mr. Gopal Agrawal, Head – Equity and Mr. Neelesh Surana, Senior Fund Manager (Equity) will jointly manage the fund.

UTI MF Declares Dividend For Wealth Builder Fund

Record date for dividend is 3 June 2010 

UTI Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of UTI Wealth Builder Fund. The record date for dividend has been fixed as 3 June 2010. 

The quantum of dividend will be 10% (Rs 1.00 per unit) as on the record date. The scheme recorded NAV of Rs. 13.9100 as on 27 May 2010. 

UTI Wealth Builder Fund is an close-ended equity scheme with a maturity period of 5 years with automatic conversion into an open-ended scheme upon maturity of the scheme. The investment objective of the scheme is to achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments.

FIIs step up selling

Outflow of Rs 1421.60 crore on 25 May 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 1421.60 crore on Tuesday, 25 May 2010, higher than Rs 881.90 crore on Monday, 24 May 2010. 

The net outflow of Rs 1421.60 crore on 25 May 2010 was a result of gross purchases Rs 1753.40 crore and gross sales Rs 3174.90 crore. There was an outflow of Rs 1421.80 crore from secondary equity markets which was a result of gross purchases Rs 1753.20 crore and gross sales Rs 3174.90 crore. The BSE Sensex fell 447.07 points or 2.71% to 16,022.48 on that day.

There was an inflow of Rs 0.30 crore in the category 'primary market & others'. 

FII outflow in May 2010 totaled Rs 9910 crore (till 25 May 2010). FIIs had bought equities worth Rs 9900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 20,095.80 crore (till 25 May 2010). 

There are a total of 1,711 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Mutual funds in selling mode

Outflow of Rs 432.80 crore on 25 May 2010 

Mutual funds (MFs) sold shares worth a net Rs 432.80 crore on Tuesday, 25 May 2010 as against an inflow of Rs 82.70 crore on Monday, 24 May 2010. 

The net outflow of Rs 432.80 crore on 25 May 2010 was a result of gross purchases Rs 605.50 crore and gross sales Rs 1038.30 crore. The BSE Sensex fell 447.07 points or 2.71% to 16,022.48 on that day. 

MFs sold shares worth netRs 848.20 crore in May 2010 (till 25 May 2010). MFs had sold shares worth net Rs 1410.40 crore in April 2010.

Revised draft of DTC to be ready by June-end

The government will finalize the revised draft of the Direct Taxes Code (DTC) by next month, Union revenue secretary Sunil Mitra said. It will then gather feedback from the public on the revised DTC, aimed at simplifying the tax structure. 

"It will be open for public viewing and comments for 15 days and then the final draft will be prepared," Mitra said at an interactive session here on Monday organised by the Bengal National Chamber of Commerce Industry (BNCCI). 

While the government came out with the first draft of DTC in August last year, it was supposed to be finalised by end of this month. 

According to the Union revenue secretary, the draft DTC will be tabled during the monsoon session of Parliament and is likely to become a law by the next budget session. "The trend in advance corporate tax collection is good. It is also buoyant in case of the indirect taxes like excise and customs duty. We have set a target of Rs 7.5 lakh crore of tax revenue (both direct and indirect) for 2010-11 and it will be revised if required. The total collection in 2009-10 was around Rs 6.31 lakh crore," he said. 

Mitra said the Centre will compensate states for any loss in revenue after GST is rolled out.

Volatile crude ends higher

Crude ends nine days of losing streak 

After nine consecutive sessions of drop, crude oil prices ended higher at Nymex on Monday, 24 May 2010. Prices rose despite a strong dollar but oscillated between red and green for entire day. Prices rose today as traders thought that last week's selling of commodities leading to lower prices was overdone. 

On Monday, crude-oil futures for light sweet crude for July delivery closed at $70.21/barrel (higher by $0.17 or 0.2%). During intra day trading, prices rose to a high of $70.96. Last week, crude shed 2.2%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 5.4%. 

Prices have shed almost 22% since it hit a high of $86.5 during first week of April this year. Prices are also 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. 

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.9%. 

Among other energy products on Monday, gasoline for June delivery added a penny, or 0.5%, to $1.9708 a gallon. 

Natural gas for June delivery retreated 2 cents, or 0.5%, to $4.0170 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 June delivery closed lower by Rs 25 (0.75%) at Rs 3,299/barrel. Natural gas for May delivery closed at Rs 187.4, lower by Rs 2.7 (1.4%).

Good gains for precious metals

Prices rise despite strong dollar 

Precious metals bounced back and ended considerably higher on Monday, 24 May 2010 at Comex. Prices rose despite a strong dollar. Prices rose today as traders thought that last week's selling of commodities leading to lower prices was overdone. 

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 Monday, gold for June delivery ended at $1,194 an ounce, higher by $17.9 (1.5%) an ounce on the New York Mercantile Exchange. Gold for June delivery had settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February. 

Last week, gold ended lower by 4.2%. For the month of April, gold ended higher by 6%. 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 8.8%. 

On Monday, July Comex silver futures ended higher by 35 cents (2%) at $18 an ounce. Last week, silver ended lower by 8.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 4.5%.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.9%. 

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 163 (0.9%) at Rs 18,165 per ten grams. Prices rose to a high of Rs 18,185 per 10 grams and fell to a low of Rs 17,968 per 10 grams during the day's trading. 

At the MCX, silver prices for July delivery closed Rs 287 (1%) higher at Rs 28,719/Kg. Prices opened at Rs 28,540/kg and rose to a high of Rs 28,765/Kg during the day's trading.

FII outflow crosses Rs 8400 crore in May 2010

Outflow of Rs 881.90 crore on 24 May 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 881.90 crore on Monday, 24 May 2010, lower than Rs 1476.80 crore on Friday, 21 May 2010. 

The net outflow of Rs 881.90 crore on 24 May 2010 was a result of gross purchases Rs 2301.20 crore and gross sales Rs 3183 crore. There was an outflow of Rs 911.20 crore from secondary equity markets which was a result of gross purchases Rs 2271.80 crore and gross sales Rs 3183 crore. The BSE Sensex rose 23.94 points or 0.15% to 16,469.55 on that day. 

There was an inflow of Rs 29.40 crore in the category 'primary market & others'. 

FII outflow in May 2010 totaled Rs 8488.40 crore (till 24 May 2010). FIIs had bought equities worth Rs 9900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 21,517.40 crore (till 24 May 2010). 

There are a total of 1,712 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Mirae launches Emerging Bluechip Fund

Mirae Mutual Fund (MF) has announced the launch of its Mirae Asset Emerging Bluechip Fund which is an open-ended equity fund.

Primarily a mid-cap fund, it will invest up to 100 per cent in Indian equities of companies that are not part of the top 100 stocks by market capitalisation, but have a market capitalisation of at least Rs 100 crore at the time of investment. It will invest up to 35 per cent in other Indian equities. The fund may also invest up to 35 per cent in debt. 

Arindam Ghosh, CEO, Mirae Asset Global Investments (India), said,: "With the launch of this fund, we are expanding our portfolio by offering a mid-cap equity fund. This fund will give investors the opportunity to participate in the growth story of today's emerging companies which have the potential to become market leaders in the future. We believe that today's mid-cap stocks have the potential to be tomorrow's large-caps. The right amount of mid-caps in the portfolio can help investors optimise their risk-adjusted returns.”

The fund has been benchmarked to the CNX Midcap Index. The fund offers both growth and dividend options.

The minimum application amount will be Rs 5,000. One per cent exit load will be applicable if an investor exits the fund within one year. 

The new fund offer (NFO) will open on May 24, 2010 and close on June 22, 2010.

Sahara MF Declares Dividend For Midcap Fund

Record date for dividend is 28 May 2010 

Sahara Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Sahara Midcap Fund. The record date for the declaration of dividend is 28 May 2010. 

The quantum of dividend will be 40% (Rs 4.00 per unit) on the record date. The scheme recorded NAV of Rs 18.6693 as on 21 May 2010. 

Sahara Mid-Cap Fund is an open ended growth fund, which has the investment objective to achieve long term capital growth at medium level of risks by investing primarily in Mid-Cap stocks.

FIIs step up selling

Outflow of Rs 1476.80 crore on 21 May 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 1476.80 crore on Friday, 21 May 2010, higher than Rs 710.70 crore on Thursday, 20 May 2010. 

The net outflow of Rs 1476.80 crore on 21 May 2010 was a result of gross purchases Rs 1827.80 crore and gross sales Rs 3304.60 crore. There was an outflow of Rs 1474.30 crore from secondary equity markets which was a result of gross purchases Rs 1827.80 crore and gross sales Rs 3302.10 crore. The BSE Sensex fell 74.07 points or 0.45% to 16,445.61 on that day.

There was an outflow of Rs 2.50 crore in the category 'primary market & others'. 

FII outflow in May 2010 totaled Rs 7606.50 crore (till 21 May 2010). FIIs had bought equities worth Rs 9900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 22399.20 crore (till 21 May 2010). 

There are a total of 1,714 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Birla Sun Life Mutual Fund declares dividend

Record date for dividend is 28 May 2010 

Birla Sun Life Mutual Fund has announced 28 May 2010 as the record date for declaration of dividend under the dividend option of Birla Sun Life long Term Advantage Fund. The fund house has decided to distribute 10% or Re 1.00 as dividend on face value of Rs 10 per unit. The scheme recorded NAV of Rs 12.89 per unit as on 20 May 2010. 

Birla Sun Life long Term Advantage Fund is a close ended diversified equity scheme with a maturity of 5 years. Upon maturity the scheme shall automatically be converted into an open ended scheme. The scheme aims at providing long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related securities.

HSBC MF Declares Dividend For Equity Fund

Record date for dividend is 28 May 2010 

HSBC Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of HSBC Equity Fund. The record date for dividend has been fixed as 28 May 2010. 

The quantum of dividend will be Rs 1.50 per unit as on the record date. The scheme recorded NAV of Rs 26.2278 per unit as on 20 May 2010. 

HSBC Equity Fund is an open ended diversified equity scheme with the investment objective to generate long term capital growth from an actively managed portfolio of equity and equity related securities.

Kotak Mahindra Mutual Fund declares dividend

Record date for dividend is 28 May 2010

Kotak Mahindra Mutual Fund has announced 28 May 2010 as the record date for declaration of dividend under the dividend option of Kotak Opportunities. The fund house has decided to distribute Re 1.00 as dividend on face value of Rs 10 per unit. The scheme recorded NAV of Rs 14.374 as on 19 May 2010. 

Kotak Opportunities is an open ended growth scheme with the investment objective to generate capital appreciation from a diversified portfolio of equity and equity related securities.

Mutual funds in buying mode

Inflow of Rs 287.60 crore on 21 May 2010 

Mutual funds (MFs) bought shares worth a net Rs 287.60 crore on Friday, 21 May 2010, lower than Rs 462.40 crore on Thursday, 20 May 2010. 

The net inflow of Rs 287.60 crore on 21 May 2010 was a result of gross purchases Rs 1071.60 crore and gross sales Rs 784 crore. The BSE Sensex fell 74.07 points or 0.45% to 16,445.61 on that day. 

MFs sold shares worth net Rs 498.10 crore in May 2010 (till 21 May 2010). MFs had sold shares worth net Rs 1410.40 crore in April 2010.

Irda slams insurers for paying banks crores

The Insurance Regulatory & Development Authority (Irda) has come down heavily on insurance companies for the way they are conducting referral arrangements with banks, leading to a higher premium being charged to the policyholder. 

Typically, under the referral arrangement, a bank provides an insurance company with physical infrastructure at certain branches to generate leads for sale of the latter’s products.

The bank gets compensated depending on the amount of premium the insurance company is able to connect, though it does not close the sale itself, but merely generates the lead. The sale has to be closed by a qualified insurance agent from the company. 

The insurance regulator is putting in place draft guidelines on streamlining the referral fee structures, which have escalated the already rising costs of insurers. 

“It was noticed during the market inspection that some of the life insurers are also entering into referral arrangements with a variety of non-banking referral entities. Many insurers had in fact entered into referral arrangements with individuals,” A K Giridhar, executive director Irda said.   

“So far as referral fee is concerned, it is observed that several different practices are being followed by the insurers, which are resulting in high cost of acquisition, thereby pushing up the premiums for the policyholders,” he said.

“In view of a lack of guidelines on the fee limits in case of non-banking entities and individuals, the insurers at the moment enjoy unfettered freedom. In their over-enthusiasm to rope in banks as referrals, some insurers are seen to pay upfront fees/ advances amounting to crores of rupees. It has been noticed on some occasions that the parties have included extraneous clauses in their agreements. In the absence of standardization, each of the agreements is at present being scrutinized to check for any unacceptable clauses,” Irda noted.

In certain cases, the regulator noticed that though the fee paid was within limits, it was “being staggered over a few years rather than being paid in lump sum after the sale. Insurers claim that they are linking the payment of fee in subsequent years to the receipt of renewal premiums. This is questionable in view of the limited role envisaged for the referrals,” the regulator said.

For starters, the institution of referral providers is widespread in the insurance sector across regimes and has a crucial role in distribution of insurance products. Referral providers facilitate the expansion of insurers among segments that otherwise may not be readily accessible to them through their own channels of distribution. 

While in certain cases the referral activity is limited to provision of data of their clients, in many cases it includes introduction of clients, provision of office space for the employees of insurer, display of publicity material, etc... basically, everything except the final sale. Since the activities of a referral provider stop short of selling, they normally do not require a regulatory licence. 

Banks are much sought after by insurers since they are not only in possession of data of a large number of clients, but also generally in know of their personal details such as their financial status, which is of crucial importance to the insurers. 

Once the recommendations from various stakeholders in the insurance industry is complete, it would be placed before the Insurance Advisory Committee and the Irda board.

source: DNA

Precious metals turn pale

Prices drop in tandem with equities and oil 

Precious metals ended lower on mixed on Wednesday, 19 May at Comex. Prices fell as traders anticipated that recent rally in precious metals last week was overdone. Prices also fell in tandem with US equities and other commodities. 

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 $1,193.1 an ounce, lower by $21.5 (1.8%) an ounce on the New York Mercantile Exchange. Today's session at Wall Street was clouded by Germany's temporary ban on the naked short-selling of several derivatives and instruments. A sliding U.S. stock market and further losses for oil took a toll on gold as investors sold bullion to cover margin calls in stocks and other commodities. Gold for June delivery had settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February. 

Last week, gold ended higher by 1.5%. For the month of April, gold ended higher by 6%. 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 8.7%. 

On Wednesday, July Comex silver futures ended lower by 79 cents (4.2%) at $18.08 an ounce. Last week, silver ended higher by 4.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 2.6%. 

Today's trading once again saw some renewed strength in the euro. Though the euro made its best single-session gain against the greenback in nearly one year, the lack of any new developments in Europe led many to believe that the bounce was little more than a relief rally that squeezed short sellers. In turn, stocks showed little sustained reaction to the euro's climb. 

Among economic data for the day, The Labor Department in US reported on Wednesday, 19 May 2010 that consumer prices in the U.S. fell 0.1% on a seasonally adjusted basis in April as energy, housing, auto and apparel prices declined. It was the first decline in the consumer price index since March 2009. The consumer price index is up 2.2% in the past year. The core CPI, which excludes food and energy prices to get a better view of underlying inflation, was unchanged in April, lowering the year-over-year increase in core inflation to 0.9%, the lowest rate since January 1966. 

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 10 (0.05%) at Rs 18,018 per ten grams. Prices rose to a high of Rs 18,291 per 10 grams and fell to a low of Rs 17,976 per 10 grams during the day's trading. 

At the MCX, silver prices for July delivery closed Rs 493 (1.7%) lower at Rs 28,762/Kg. Prices opened at Rs 29,220/kg and fell to a low of Rs 28,590/Kg during the day's trading.

Crude fails to register gains

Crude ends lower for sixth straight day 

Crude oil prices tried to hold on to its gains but failed and ended modestly lower at Nymex on Wednesday, 19 May 2010. Prices slipped as traders continued to mull over the pace of euro zone's recovery and its impact on the currencies, especially on the euro. It also questioned the demand for oil in coming months. 

On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $72.48/barrel (lower by $0.22 or 0.3%). With today, prices fell for seventh straight session. Last week, crude shed 4.6%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 1.9%. 

Prices have shed almost 18% since it hit a high of $86.5 during first week of April this year. Prices are also 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 134% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

The EIA reported today that there was an increase of 200,000 barrels in crude-oil stockpiles for last week against an expected rise of 950,000 barrels in crude supplies. The decrease for gasoline by 300,000 barrels came in slightly below expectations. The refinery utilization rate rose to 85.9%. Due to this report, crude tried its level best to register gains but failed at the end. 

Today's trading once again saw some renewed strength in the euro. Though the euro made its best single-session gain against the greenback in nearly one year, the lack of any new developments in Europe led many to believe that the bounce was little more than a relief rally that squeezed short sellers. In turn, stocks showed little sustained reaction to the euro's climb. 

Among economic data for the day, The Labor Department in US reported on Wednesday, 19 May 2010 that consumer prices in the U.S. fell 0.1% on a seasonally adjusted basis in April as energy, housing, auto and apparel prices declined. It was the first decline in the consumer price index since March 2009. The consumer price index is up 2.2% in the past year. The core CPI, which excludes food and energy prices to get a better view of underlying inflation, was unchanged in April, lowering the year-over-year increase in core inflation to 0.9%, the lowest rate since January 1966. 

Among other energy products, reformulated gasoline for July delivery declined 3 cents, or 1.4%, to settle at $2.0094 a gallon. Natural gas for June delivery retreated 18 cents, or 4.2%, to end at $4.1580 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 June delivery closed higher by Rs 21 (0.6%) at Rs 3,376/barrel. Natural gas for May delivery closed at Rs 194.2, lower by Rs 5.3 (2.6%).

Primary articles group inflation recedes to 16.19%

Food inflation at 16.49% 

The index for primary articles group declined by 0.1%. The annual rate of inflation, calculated on point-to-point basis, stood at 16.19% for the week ended 8 May 2010 over 16.76% for the previous week ended 1 May 2010 and over 6.67% during the corresponding week ended 9 May 2009. 

The fall in primary articles index was due to 0.4% fall in index of non food articles along with marginal fall in the index of food articles. 

The index for 'Non-Food Articles' group declined by 0.4% to 282.1 (Provisional) from 283.1 (Provisional) for the previous week due to lower prices of raw rubber (7%), linseed (2%) and castor seed (1%). However, the prices of raw jute (2%) moved up. Annually the group inflation rose 18.68% in the week ended 8 May 10, lower than 21.24% in the previous week.

The index for 'Food Articles' group declined marginally to 293.9 (Provisional) from 294.0 (Provisional) for the previous week due to lower prices of wheat (2%) and fish-inland, maize and gram (1% each).However, the prices of urad and moong (2% each) and fruits & vegetables and tea (1% each) moved up. However, annual wholesale food prices inflation rose 16.49% in the week ended 8 May 10, higher than 16.44% in the previous week. 

The index for fuel, power, light and lubricants group remained unchanged at its previous week's level of 365.3 (Provisional). The annual rate of inflation, calculated on point to point basis also remained unchanged at 12.33% (Provisional) for the week ended 8 May 10.

FII outflow crosses Rs 5400 crore in May 2010

Outflow of Rs 1473.70 crore on 19 May 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 1473.70 crore on Wednesday, 19 May 2010, much higher than Rs 439 crore on Tuesday, 18 May 2010. 

The net outflow of Rs 1473.70 crore on 19 May 2010 was a result of gross purchases Rs 2433.30 crore and gross sales Rs 3907 crore. There was an outflow of Rs 1461.60 crore from secondary equity markets which was a result of gross purchases Rs 2433 crore and gross sales Rs 3894.50 crore. The BSE Sensex fell 467.27 points or 2.77% to 16,408.49 on that day. 

There was an outflow of Rs 12.10 crore in the category 'primary market & others', which was a result of gross purchases Rs 0.30 crore and gross sales Rs 12.40 crore. 

FII outflow in May 2010 totaled Rs 5419 crore (till 19 May 2010). FIIs had bought equities worth Rs 9900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 24,586.70 crore (till 19 May 2010). 

There are a total of 1,714 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Large Cap Equity Funds –Stabilises the Portfolio

Large cap funds have the ability to limit the downside risk during the volatile market scenario 

Investors opting to invest into equity diversified funds often get tempted by the high returns generated by the midcap equity funds, but their returns are highly volatile. On the other hand, large cap equity funds which invest into large cap firms provide stability to the investors' portfolio because their returns are relatively less volatile to the movement of the equity markets. When the markets tend to do well, the returns of large cap funds may not increase as rapidly as midcap funds, neither fall as badly when market reverses. Investing in this category of funds for a longer term not only provides equity exposure but also limits the risk arising from the volatile market. In the prevailing market volatility, a large-cap exposure may be well advised, as such stocks might provide better revenue and earnings visibility compared to mid sized and smaller companies. Such stocks may also be the first to turn around in the event of a market recovery. Large cap equity diversified funds often known for investment into well researched stocks invests into fundamentally sound scripts, which reduces volatility and stabilize the returns. Large cap funds have the ability to limit the downside risk during the volatile market scenario. 

Analysis has been carried out to find the top performing large cap equity funds based on 3 year return. The key findings from the analysis of the top performing funds is that, they have shown consistency by delivering returns above their benchmark over 1 year, 3 year and 5 year time period. Moreover, their corpus has surged for the period from May 2009 to April 2010. 

On the other hand, among the 38 large cap funds according to Capital Market classification, there are 13 funds with corpus excess of Rs 1000 crore as at the end of March 2010, which is a clear indication that the inflows from investors over a period of time had led to surge of corpus of the funds. HDFC Top 200 Fund had the maximum corpus of Rs 6858.84 crore and Escorts Growth Plan had the lowest corpus of Rs 4.13 crore as at the end of March 2010. The average return from this category of fund is 54.41%, 9.74% and 22.11% over one, three and five year time period. 30 schemes in this category have outperformed the broad market indicator BSE Sensex over 3 year time period. 

HDFC Top 200 Fund

HDFC Top 200 Fund is the biggest fund in the category and at the same time it has been the top performing fund over 3 year time period with a return of 17.77%. The investment strategy of the scheme is to primarily restrict the equity portfolio to the BSE 200 index scripts to reduce the risks while maintaining steady growth. The scheme has consistently outperformed its benchmark index "BSE 200" over 1 year, 3 year and 5 year time period. HDFC Top 200 Fund has beaten its benchmark by 10.47%, 9% and 8.23% over 1 year, 3 year and 5 year time period. It had been allocating 94.65% on average into equity instruments over one year period (May 2009 to April 2010). The scheme which had a corpus of Rs 3314.58 crore in May 2009 has increased to Rs 7219.50 crore in April 2010. This scheme has been a long term return generator for its investors. At the same time the scheme has a long term track record by being into existence for the past 13 years. This fund may be more suitable for investors who value consistent performance rather than high absolute returns..

Templeton India Growth Fund 

Templeton India Growth Fund has shown consistency by delivering returns above its benchmark "BSE Sensex" over 1 year, 3 year and 5 year time period. It has been able to outpace its benchmark by 27.41%, 10.02% and 3.80% over 1, 3 and 5 year time periods. This scheme adopts a long term disciplined approach to investing and use value investing philosophy. The fund had been allocating 91.59% on an average into equity instruments over one year period (May 2009 to April 2010). The scheme which had a corpus of Rs 339.80 crore in May 2009 has increased to Rs 586.53 crore in April 2010. 

HDFC Equity Fund 

HDFC Equity Fund one of the large cap focused fund of HDFC Mutual Fund has delivered return above its benchmark "S&P CNX 500" over long term time period. It is evident from 1 year, 2 year and 3 year returns as the scheme has outperformed the benchmark index by 30.22%, 9.10% and 9.35% over the period said above. In order to provide long term capital appreciation, the scheme invests predominantly in growth companies. It had been allocating 97.37% on average into equity instruments over one year period (May 2009 to April 2010). The scheme which had a corpus of Rs 3780.85 crore in May 2009 has increased to Rs 6187.09 crore in April 2010. 

Outlook

Large Cap Equity Funds look at long term capital appreciation by investing into growth oriented stocks. Moreover, they focus on outperforming their benchmark over long term period. The good thing about large cap funds is that they can form the core holding of any portfolio, someone who is averse to taking risks (a very small percentage of the portfolio can be invested in large cap funds) to another who is open to an aggressive tilt. So if an investor dosent has exposure to a large cap funds, they can certainly consider it. And, if investors have no equity exposure at all, it would be a wise thing by start investing into large cap equity funds. Preferably a systematic investment plan can be adopted to generate good returns over a long period. Though the large-cap category is known to offer better protection to investors in the downturn, there are exceptions to this rule. Investors who are more aggressive might get dissatisfied with the returns in comparison with midcap funds or any other thematic fund. Adding large cap equity funds would add stability to the investor's portfolio from volatility from the equity markets, over a long period of time.

IDFC MF Introduces Additional SIP

With effect from 20 May 2010 

IDFC Mutual Fund has announced the introduction of Additional Systematic Investment Plan (SIP) facilities for all the schemes in which SIP facility is available, with effect from 20 May 2010. The facilities are: 

Perpetual SIP: Under this SIP facility the investor need not mention the maximum installment. The SIP shall end on 31 December 2099 automatically. In case there is no mention of the number of installments, the SIP shall be registered under the Perpetual SIP facility. 

Differential SIP: Under this facility the investor has a choice of registering the SIP in such a manner that the 1st SIP Installment will be higher than the subsequent installments. 

In case of existing folio's there is no requirement of registering the 1st installment, all 6 installments shall be considered as SIP transactions. Also, for all the SIP facilities the minimum investment amounts/minimum no. of installments shall be applicable.

Crude ends lower for sixth straight day

Prices erase earlier gains as dollar spikes up 

Crude oil prices ended substantially lower at Nymex on Tuesday, 18 May 2010. Prices erased earlier gains after the euro continued its backslide against the dollar. Prices fell as tomorrow's weekly inventory report is expected to show another piling of crude inventories. Prices slipped as the dollar rose substantially and traders continued to mull over the pace of euro zone's recovery and its impact on the currencies, especially on the euro. Prices rose earlier on the back of stronger than expected economic data. 

On Tuesday, crude-oil futures for light sweet crude for June delivery closed at $69.41/barrel (lower by $0.67 or 1%). With today, prices fell for sixth straight session. Last week, crude shed 4.6%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 1.6%. 

Prices have shed almost 17% since it hit a high of $86.5 during first week of April this year. Prices are also 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 135% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

Clouds of uncertainty hanging over Europe dissipated a bit today as Greece said that it received 14.5 billion euros in loans from the European Commission and that its short-term financing needs are covered. 

The news saw some renewed strength in the euro. However, the euro soon resumed its backslide. Its downturn steepened following news that Germany will ban naked short selling of certain financial stocks, credit default swaps, and government bonds. The euro dropped a sharp 1.5% to a fresh four-year low that was just above 1.2200 per dollar. In the currency market today, the Dollar Index spiked 1.1% to a fractionally improved 52-week high.

Among economic data for the day, The Commerce Department in US reported on Tuesday, 18 May 2010 that U.S. housing starts increased for the second straight month in April but building permits fell sharply. Hitting an 18-month high, housing starts rose an estimated 5.8% to a seasonally adjusted annual rate of 672,000 from an upwardly revised 635,000 in March. April's starts marked the highest level of new construction since October 2008, when the financial crisis worsened. Starts of single-family homes rose 10.2% in April to a 593,000-unit annual rate, the highest since August 2008. 

However, building permits fell 11.5% to a seasonally adjusted annual rate of 606,000, the lowest in six months. Permits for single-family homes, also dropped, down 10.7% to a 484,000 annual rate. Housing starts are up 40.9% compared with the record low in April 2009, but they're down about 70% from the peak in 2006. Building permits are up 15.9% compared with a year earlier. 

Separately, the Labor Department in US reported on Tuesday, 18 May 2010 that wholesale prices fell slightly in April as the cost of energy and food eased. The main producer price index fell 0.1%, seasonally adjusted. The more closely followed core rate, which excludes volatile energy and food prices, rose 0.2%. Over the past 12 months, wholesale prices have risen 5.5%, on an unadjusted basis. Yet the core rate has risen only 1% in the past year. 

Last week, The International Energy Agency lowered by 220,000 barrels a day its forecast for global oil demand for 2010. Oil demand is estimated to grow from 2009 by 1.9%, equating to 1.6 million barrels a day, to 86.4 million barrels a day. 

In contrast, the U.S. Energy Information Agency had raised its outlook for global oil demand to 1.6 million barrels per day in 2010, slightly higher than the 1.5 million barrels-a-day projection made last month. Separately, The Organization of the Petroleum Exporting Countries had also said last week it was raising its estimate for global oil demand for 2010. OPEC expects global oil demand to grow by 950,000 barrels a day to 85.38 million barrels a day. It previously expected growth of 900,000 barrels a day. 

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 19 (0.6%) at Rs 3,199/barrel. Natural gas for May delivery closed at Rs 199.5, lower by Rs 0.9 (0.44%).

Precious metals witness mixed end

Silver shines but gold turns pale 

Precious metals ended mixed on Tuesday, 18 May at Comex. Gold prices registered drop while silver gained. Gold prices fell as traders anticipated that gold's recent striking of all time highs quite a few times last week was overdone. Strong dollar also took some shine away from yellow metal. 

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 $1,214.6 an ounce, lower by $13.5 (1.1%) an ounce on the New York Mercantile Exchange. A sliding U.S. stock market and further losses for oil took a toll on gold as investors sold bullion to cover margin calls in stocks and other commodities. During intra day trading, prices fell to $1,206.6. Gold for June delivery had settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February. 

Last week, gold ended higher by 1.5%. For the month of April, gold ended higher by 6%. 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 10.5%. 

On Tuesday, July Comex silver futures ended higher by 2 cents (0.1%) at $18.88 an ounce. Last week, silver ended higher by 4.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.8%. 

Clouds of uncertainty hanging over Europe dissipated a bit today as Greece said that it received 14.5 billion euros in loans from the European Commission and that its short-term financing needs are covered. 

The news saw some renewed strength in the euro. However, the euro soon resumed its backslide. Its downturn steepened following news that Germany will ban naked short selling of certain financial stocks, credit default swaps, and government bonds. The euro dropped a sharp 1.5% to a fresh four-year low that was just above 1.2200 per dollar. In the currency market today, the Dollar Index spiked 1.1% to a fractionally improved 52-week high.

Among economic data for the day, The Commerce Department in US reported on Tuesday, 18 May 2010 that U.S. housing starts increased for the second straight month in April but building permits fell sharply. Hitting an 18-month high, housing starts rose an estimated 5.8% to a seasonally adjusted annual rate of 672,000 from an upwardly revised 635,000 in March. April's starts marked the highest level of new construction since October 2008, when the financial crisis worsened. Starts of single-family homes rose 10.2% in April to a 593,000-unit annual rate, the highest since August 2008. 

However, building permits fell 11.5% to a seasonally adjusted annual rate of 606,000, the lowest in six months. Permits for single-family homes, also dropped, down 10.7% to a 484,000 annual rate. Housing starts are up 40.9% compared with the record low in April 2009, but they're down about 70% from the peak in 2006. Building permits are up 15.9% compared with a year earlier. 

Separately, the Labor Department in US reported on Tuesday, 18 May 2010 that wholesale prices fell slightly in April as the cost of energy and food eased. The main producer price index fell 0.1%, seasonally adjusted. The more closely followed core rate, which excludes volatile energy and food prices, rose 0.2%. Over the past 12 months, wholesale prices have risen 5.5%, on an unadjusted basis. Yet the core rate has risen only 1% in the past year.

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 lower by Rs 252 (1.4%) at Rs 18,008 per ten grams. Prices rose to a high of Rs 18,250 per 10 grams and fell to a low of Rs 17,916 per 10 grams during the day's trading. 

At the MCX, silver prices for July delivery closed Rs 138 (0.5%) lower at Rs 29,255/Kg. Prices opened at Rs 29,301/kg and fell to a low of Rs 28,930/Kg during the day's trading.

FIIs continue selling

Outflow of Rs 439 crore on 18 May 2010 

Foreign institutional investors (FIIs) sold shares worth a net Rs 439 crore on Tuesday, 18 May 2010, lower than Rs 1031.60 crore on Monday, 17 May 2010. 

The net outflow of Rs 439 crore on 18 May 2010 was a result of gross purchases Rs 2143.20 crore and gross sales Rs 2582.20 crore. There was an outflow of Rs 414.10 crore from secondary equity markets which was a result of gross purchases Rs 2141.40 crore and gross sales Rs 2555.50 crore. The BSE Sensex rose 40.20 points or 0.24% to 16,875.76 on that day.

There was an outflow of Rs 25 crore in the category 'primary market & others', which was a result of gross purchases Rs 1.80 crore and gross sales Rs 26.80 crore. 

FII outflow in May 2010 totaled Rs 3945.30 crore (till 18 May 2010). FIIs had bought equities worth Rs 9,900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 26,060.40 crore (till 18 May 2010). 

There are a total of 1,714 foreign funds registered with the Securities & Exchange Board of India (Sebi).

How to select a fund?

There are over 700 mutual fund schemes running in India today and about 35 different companies that run these funds. So, how will you choose which fund to invest in? 

Goals. Are you investing to fulfill a short-term or a long-term goal? Or, are you investing just because you over heard in your office cafeteria that you should invest in a certain fund? Not all mutual funds serve the same purpose, so you should know why you are investing.

If you want capital appreciation for your child's education 20 years from now, it is better to invest in an equity fund rather than a bond or money market funds. Equity funds are definitely high on risk, but they have the potential to generate higher returns over 20 years compared with a debt fund. However, if you want to save and protect your capital for funding your child's education in two years, then you a more conservative fund like a bond or money market fund should be your choice. A short time period does not give you the flexibility to take on a lot of risk. 

Time horizon. This is one of the most critical factors while penciling on a mutual fund scheme. Ideally, an equity fund should be held for at least 3-5 years because equities are long-term investment vehicles. Debt or money market funds, on the other hand, can be invested in for shorter periods of time. 

Promoter of the fund. A lot of new companies are starting fund houses. Many of them will not be as successful as the ones that already have a successful track record built over the past 5-10 years. Therefore, it is advisable to do some homework before selecting a mutual fund scheme. One should not give in to the marketing tactics of a company or a scheme. Invest in funds that have been launched by companies that have a track record and are not new into the Indian market. 

Past performance. Many investors look at the past performance of a fund or fund house and assume that the fund will continue to generate the same return in the future as well. This is not always true. Therefore, do not invest in a fund just because it has done well in the recent past. Look at various factors like fund managers, the objective of the scheme, its portfolio and comparison with peers before making the final choice. Invest in funds that have done well across market cycles and investment cycles.

Gold Turns Down As Equities Move Up

International gold futures turned higher in the mid London trades today as the gains in the US and European equities diminished demand for the safe metal. 

US Stock futures pointed to a higher open on Monday as investors sought to put European debt crisis concerns behind them, even as the euro fell to a four-year low. Futures for the S&P 500 were down by 1.7 points at 1137 and were 3.27 points above fair value. Futures for the Nasdaq were up by 2.5 points.

COMEX June gold futures are down 0.1 cent at $ 1227.7 per ounce. The counter had earlier hit the days high of $ 1242.8.

At 8:30 a.m. ET, the Federal Reserve Bank of New York issues its monthly survey of New York manufacturers for a read on regional business conditions.

At 9 a.m. ET, the U.S. Treasury Department releases its March Treasury International Capital report, which market-watchers look to for a read on foreign demand for U.S. debt and assets.

MCX June benchmark futures are trading up nearly Rs 35 at Rs 18199 per 10 grams. The counter traded in the range of Rs 18424 - 18175 levels. The traders may sell in on break of Rs 18160 levels with target of Rs 18040.

Crude tumbles

Prices sink as dollar stings 

Crude oil prices ended substantially lower at Nymex on Friday, 14 May 2010. Prices fell as the dollar rose substantially and traders continued to mull over long-term implications of the European Union's rescue package for Greece and its impact on the currencies, specially on the euro. Better than expected economic data failed to charge up prices. 

On Friday, crude-oil futures for light sweet crude for June delivery closed at $71.61/barrel (lower by $2.79 or 3.8%). For the week, crude shed 4.6%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 4.7%. 

Prices are 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 137% 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 Friday, the euro dropped once again against the dollar and reached the lowest level since October 2008. The dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 1%. 

Among economic data for the day, the Commerce Department reported on Friday that U.S. retail sales rose a seasonally adjusted 0.4% to $366.4 billion in April, the seventh straight increase and the 12th gain in the past 13 months, led by strong sales at hardware stores and garden center. Excluding a 0.5% increase in auto sales, sales rose 0.4% to $303.5 billion. The figures were better than expected. 

As per the report, sales were mixed across retail sectors last month, with a strong 6.9% gain at hardware stores and garden centers outweighing falling sales at mall-type stores. Sales at hardware stores had increased 7.8% in March. 

In the latest weekly inventory report, the EIA reported earlier during the week an increase of 1.95 million barrels in the nation's oil inventories for last week, slightly above expectations. The biggest surprise was a decrease in gasoline inventories by 2.8 million barrels, whereas market was expecting a small increase. Stockpiles of distillates, which include diesel and heating oil, rose by 1.4 million barrels. The refinery utilization rate dropped more than expected to 88.4%. Meanwhile, inventories at Cushing, Okla., the delivery point for Nymex futures, rose by 784,000 barrels to a record high on 37 million barrels. 

During the week, on Thursday, The International Energy Agency lowered by 220,000 barrels a day its forecast for global oil demand for 2010. Oil demand is estimated to grow from 2009 by 1.9%, equating to 1.6 million barrels a day, to 86.4 million barrels a day. 

In contrast, earlier this week, the U.S. Energy Information Agency raised its outlook for global oil demand to 1.6 million barrels per day in 2010, slightly higher than the 1.5 million barrels-a-day projection made last month. Separately, The Organization of the Petroleum Exporting Countries had also said on Tuesday it was raising its estimate for global oil demand for 2010. OPEC expects global oil demand to grow by 950,000 barrels a day to 85.38 million barrels a day. It previously expected growth of 900,000 barrels a day. 

Among other energy products on Friday, natural gas for June delivery pared down some losses to end 3 cents off, or 0.6%, to $4.31 per million British thermal units. Reformulated gasoline for June delivery declined 6 cents, or 2.9%, to $2.1308 a gallon. 

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.

FIIs resume selling

Outflow of Rs 204.90 crore on 14 May 2010

Foreign institutional investors (FIIs) sold shares worth a net Rs 204.90 crore on Friday, 14 May 2010, as against an inflow of Rs 85.90 crore on Thursday, 13 May 2010. 

The net outflow of Rs 204.90 crore on 14 May 2010 was a result of gross purchases Rs 2262.60 crore and gross sales Rs 2467.60 crore. There was an outflow of Rs 348.90 crore from secondary equity markets which was a result of gross purchases Rs 2177.50 crore and gross sales Rs 2466.40 crore. The BSE Sensex fell 271.27 points or 1.57% to 16994.60 on that day. 

There was an inflow of Rs 144 crore in the category 'primary market & others', which was a result of gross purchases Rs 145.20 crore and gross sales Rs 1.20 crore. 

FII outflow in May 2010 totaled Rs 2474.70 crore (till 14 May 2010). FIIs had bought equities worth Rs 9900 crore in April 2010. FII inflow in the calendar year 2010 totaled Rs 27,531 crore (till 14 May 2010). 

There are a total of 1,714 foreign funds registered with the Securities & Exchange Board of India (Sebi).