FIIs step up buying

Inflow of Rs 1518 crore on 25 March 2011 

Foreign institutional investors (FIIs) bought shares worth a net Rs 1518 crore on Friday, 25 March 2011, substantially higher than an inflow of Rs 345.50 crore on Thursday, 24 March 2011. 

The net inflow of Rs 1518 crore on 25 March 2011 was a result of gross purchases Rs 3329.90 crore and gross sales Rs 1812 crore. There was an inflow of Rs 1518.20 crore into the secondary equity markets which was a result of gross purchases Rs 3328.80 crore and gross sales Rs 1810.60 crore. The BSE Sensex had jumped 464.90 points or 2.53% to settle at 18,815.64 on that day. 

There was an outflow of Rs 0.20 crore from the category 'primary market & others', on 25 March 2011, which was a result of gross purchases Rs 1.10 crore and gross sales Rs 1.30 crore.

FII inflow in March 2011 totaled Rs 3872.20 crore (till 25 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 5526.50 crore (till 25 March 2011). 

FII had bought equities worth Rs 133266 crore in the calendar year 2010. In dollar terms the net equity inflow in 2010 totaled $29.36 billion, compared to an inflow of $17.45 billion in 2009. The annual inflow in 2010 was at record level. 

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

Birla Sun Life MF Declares Dividend For Tax Relief 96 Fund

Record date for dividend is 31 March 2011 

Birla Sun Life Mutual Fund has announced 31 March 2011 as the record date for the declaration of dividend on the face value of Rs 10 per unit under dividend option of Birla Sun Life Tax Relief 96 Fund. 

The quantum of dividend will be Rs 4 per unit as on the record date. The scheme recorded NAV of Rs 79.29 per unit as on 24 March 2011. 

Birla Sun Life Tax Relief 96 Fund is an open ended equity linked savings scheme with a lock-in of 3 years from the date of allotment. It has the investment objective of long term growth of capital through a portfolio with a target allocation of 80% equity, 20% debt and money market securities.

Weekly Scenario: Equity Funds Closed The Week With Smart Gains

Indian equity market closed the week with smart gains, mainly on institutional support and firm cues from the global arena. Despite escalating turbulences in the Middle East nations, positive vibes came from the introduction of GST bill and the Banking bill in parliament. 

Meanwhile, reports that billionaire investor Warren Buffet intends to use the huge cash pile of his flagship firm Berkshire Hathaway to acquire companies in India raised the sentiments. However the food inflation increased to 10.05% (y-o-y) compared to 9.42% seen previous week. 

The BSE Sensex surged 936.83 points or 5.24% to 18,815.64 during the week ended 25 March 2011.The BSE Mid-cap index gained 3.25% to 6,721.56 and the Small-cap index advanced 2.61% to 8,001.63. All the sectoral indices on the BSE were in the positive terrain.

Among the major categories in equity fund, Index Funds and Large Cap Funds were the highest gainers by 4.94% and 4.30% respectively over the one week period ended 25 March 2011. It was followed by Tax Saving Funds by 4.11%, Multi Cap Funds by 4.04% and Mid Cap Funds by 3.15% 

Among the debt fund categories, Gilt Fund – Medium & Long Term gained the highest by 0.21%, followed by Gilt Funds – Short Term and Income Funds by 0.17% each, Floating Rate Income Funds – Long Term, Ultra Short Term Funds & Floating Rate Income Funds – Short Term by 0.16% each, Liquid Funds by 0.15% and Short Term Income Funds by 0.14%. 

Equity Diversified Funds

 

Large Cap Funds: The Large Cap category clocked an average return of 4.30% for the week ended 25 March 2011. Out of 50 funds considered, 27 outperformed the category average. L&T Hedged Equity Fund emerged as the top performer by gaining by 5.18%. It was followed by JM Equity Fund which gained 5.09%, BNP Paribas Equity Fund and Birla Sun Life Top 100 Fund which climbed up 5.07% each. Escorts Growth Plan and Tata Equity Management Fund ended at the bottom this category gaining by 1.55% and 2.75% respectively. 

Mid Cap Funds: Funds from Mid Cap category posted an average return of 3.15% over the one-week period ended 25 March 2011. Out of 43 funds, 23 bettered the category average. JM Mid Cap Fund was the top performer, which gained by 4.41%, followed by HSBC Midcap Equity Fund which climbed 4.35% and Reliance Regular Savings Fund - Equity rose 4.24% among others. Axis Midcap Fund and Religare Mid N Small Cap Fund ended at the bottom of this category gaining by 1.20% and 1.91% respectively. 

Multi Cap Funds: The Multi Cap category clocked an average return of 4.04% for the week ended 25 March 2011. Out of 73 funds considered, 43 outperformed the category average. Birla Sun Life India GenNext Fund and IDFC Equity Fund - A were the top performers, which gained 5.19% each, followed by ICICI Pru Focused Bluechip Equity Fund which climbed 5.06% among others. Edelweiss Absolute Return Fund and Sahara Star Value Fund were the schemes to deliver lower returns in this category gaining by just 0.82% and 1.79% respectively. 

Tax Savings Funds

 

Funds from Tax Savings category posted an average return of 4.11% over the one-week period ended 25 March 2011. Out of 36 funds, 20 bettered the category average. L&T Tax Saver Fund was the top performer, which gained by 4.99%, followed by Baroda Pioneer ELSS ‘96 which climbed 4.98% and Bharti AXA Tax Advantage Fund rose 4.83% among others. Escorts Tax Plan and Canara Robeco Equity – Tax Saver ended at the bottom of this category gaining by 2.04% and 2.98% respectively. 

Index Funds

 

The Index Fund category clocked an average return of 4.94% for the week ended 25 March 2011. Out of 28 funds considered, 23 outperformed the category average. JM Nifty Plus Fund, HDFC Index Fund-Nifty Plan and Birla Sun Life Index Fund were the top performer, which gained by 5.25% each, followed by UTI-Master Index Fund which climbed 5.22% among others. ICICI Pru Nifty Junior Index Fund and IDBI Nifty Junior Index Fund ended at the bottom of this category gaining by 2.85% and 2.99% respectively. 

Hybrid Funds

 

Funds from Equity Oriented Balanced category posted an average return of 2.83% over the one-week period. Out of 30 funds, 18 bettered the category average. UTI-CCP Advantage Fund and JM Balanced Fund were the highest gainer in this category with their NAV appreciating by 4.09% and 3.78% respectively. 

Funds from Debt Oriented Balanced category posted an average return of 1.39% over the one-week period. Out of 15 funds, 7 bettered the category average. LICMF Childrens's Fund and UTI-CRTS were the highest gainer in this category with their NAV appreciating by 3.19% and 2.22% respectively. 

source: NAV India

Mutual funds continue buying

Inflow of Rs 79.20 crore on 25 March 2011 

Mutual funds (MFs) bought shares worth a net Rs 79.20 crore on Friday, 25 March 2011, lower than an inflow of Rs 158 crore on Thursday, 24 March 2011. 

The net inflow of Rs 79.20 crore on 25 March 2011 was a result of gross purchases Rs 667.60 crore and gross sales Rs 588.40 crore. The BSE Sensex had jumped 464.90 points or 2.53% to settle at 18,815.64 on that day. 

MFs bought shares worth net Rs 751.70 crore in March 2011 (till 25 March 2011). Mutual funds had bought equities worth a net Rs 1427.10 crore in February 2011.

Mirae Asset Global Investments launches its India-China Consumption Fund

NFO open from 9 March 2011 to 23 March 2011 

Mirae Asset Global Investments (India) Pvt. Ltd., announced the launch of Mirae Asset India-China Consumption Fund, an open ended equity oriented scheme. 

The scheme, the first of its kind in India, will focus on sectors/ companies benefiting from consumption-led demand that is driving the world's fastest growing economies, India and China. The new fund will open on 9th March 2011 and close on 23rd March 2011. During the New Fund Offer period, units of the scheme will be offer at Rs 10 per unit. 

Mirae Asset India-China Consumption Fund will pursue a flavor of Indian and Chinese consumer stocks, providing Indian investors with the opportunity to benefit from the long term structural growth trends in consumption and consumption led sectors like Financials, Healthcare, Utilities, Telecom, Consumer Discretionary, Consumer Staples, Automobile, Retail etc. in these two nations. Commenting on the launch, Mr. Arindam Ghosh, CEO, Mirae Asset Global Investments (India) Pvt. Ltd. said, “Domestic consumption is the primary driver of the strong growth seen in India and China in the recent years. Going forward, the consumption theme will be the engine of sustainable growth made possible by higher per capita income, disposable surplus and growing urbanization. India and China are at the inflexion point of the Consumption J-curve with India's strong propensity to consume basic goods & services and China's strong demand for luxury goods. 

In terms of asset allocation, the fund will seek to invest 65 - 90% of its assets in Indian equities and equity related securities of companies that are likely to benefit either directly or indirectly from consumption led demand. The fund will also invest 10 - 35% of its portfolio in Chinese equities and equity related securities of companies that are likely to benefit either directly or indirectly from consumption led demand. The fund may take up to 25% exposure in money market instruments (including CBLO)/debt securities instruments in India and/or units of debt/liquid schemes of domestic mutual funds. 

The scheme will use a customized benchmark index that constitutes MSCI India Consumption Index (65%) and MSCI China Consumption Index (35%). 

The scheme offers regular plan with dividend and growth option. Dividend option offers payout and reinvestment facilities. Facilities like Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP) are available in the scheme. 

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

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period. Exit load charge will be 1% if redeemed within 1 year (365 days) from the date of allotment. 

The investments in India under the scheme will be managed by Mr. Gopal Agrawal, Dy. CIO & Head – Equity and Mr. Neelesh Surana, Sr. Fund Manager (Equity). Mr. Basavraj Shetty will be the dedicated fund manager for overseas investments.

Franklin Templeton MF to Introduce Franklin Templeton Family Solutions Facility

With effect from 14 March 2011 

Franklin Templeton Mutual Fund has announced the introduction of new facility know as Franklin Templeton Family Solutions (FS) with effect from 14 March 2011. FS facility is offered to encourage investors to plan for their investments based on life goals. 

Family solutions are a unique investment solution that helps investors plan for their life goals like retirement, child's future and wealth creation. 

To invest under the FS facility, investor will need to undertake a questionnaire called the “Family Solutions Planner” that asks for basic details along with specific question on the goals for which the investor wants to plan. Based on the inputs provided by the investor and after considering his/her portfolio style in light of these inputs, a set of schemes of Franklin Templeton Mutual Fund and the amount of investment towards the goal would be recommended for investment.

Franklin Templeton Launches Family Solutions in India

Franklin Templeton Investments (India) has announced the launch of Franklin Templeton Family Solutions. This is a pre-packaged investment solution positioned at investors seeking convenient ways to plan for their financial goals and would appeal to investors who want to take advantage of the time-tested model of asset allocation while planning their financial strategy. It helps Indian investors plan and invest for their life goals such as retirement and children along with long term wealth creation. 

On the rationale for launching the new initiative, Mr. Harshendu Bindal, President, Franklin Templeton India said, “The changing nature of the financial markets has resulted in an increased focus on investment concepts such as financial planning, and the importance of asset allocation. For achieving life goals, investors are beginning to recognize the need to have a long term perspective and move towards a solution based approach from a product based approach. On the other hand, in the new regulatory environment, smaller distributors need the option of a simple asset allocation solution that they can recommend in a cost effective manner to their wider audience base. Family Solutions caters to this need from both investors and distributors. The various features make it an ideal investment avenue for retail investors and distributors seeking a singular solution for all their investment needs.” 

Elaborating further, he added “This investment solutions package simplifies the investment process for investors who currently have to invest in a range of mutual funds to achieve their life goals. It gives them a ready-made asset allocation that is customized to suit their profile and needs. Moreover, it makes the investment process much easier for investors, on account of it's various features such as profiling questionnaire, a single form to capture all long term investment goals. Also it has unique features such as a customized account statement giving the details of the goals, investment details and easy monitoring through a financial advisor.” 

The Family Solutions Planner will be available on the fund house website and through most financial advisors. It is a software tool that helps one use various details such as goals, expected inflation, rate of return and formulate a plan to achieve the goal. Three funds are recommended in each portfolio based on the portfolio style (ultra conservative, conservative, moderate, aggressive, highly aggressive) and is investor specific.

Mutual funds in selling mode

Outflow of Rs 51.20 crore on 10 March 2011 

Mutual funds (MFs) sold shares worth a net Rs 51.20 crore on Thursday, 10 March 2011, as against an inflow of Rs 180.90 crore on Wednesday, 9 March 2011. 

The net outflow of Rs 51.20 crore on 10 March 2011 was a result of gross purchases Rs 257.10 crore and gross sales Rs 308.20 crore. The BSE Sensex had lost 141.97 points or 0.77% to settle at 18,327.98 on that day. 

MFs bought shares worth net Rs 395.50 crore in March 2011 (till 10 March 2011). Mutual funds had bought equities worth a net Rs 1427.10 crore in February 2011.

AMFI appoints HDFC MF's Milind Barve as Chairman

Mutual fund industry body AMFI has named HDFC Asset Management Company Managing Director Milind Barve as its new chairman, a position which fell vacant after incumbent U K Sinha became chief of market regulator Sebi. 

At the same time, the Association of Mutual Funds in India (AMFI) has named Sundeep Sikka, CEO of Anil Ambani group's mutual fund arm Reliance Capital Asset Management Co, as its new Vice-Chairman. 

Earlier in September 2010, AMFI had named U K Sinha, then chief of UTI Mutual Fund, as its Chairman and Barve as its Vice-Chairman. 

However, the leadership team at AMFI had to undergo a change after Sinha assumed charge as Sebi Chairman on February 18. 

Barve and Sikka would hold office of Chairman and Vice-Chairman, respectively, till the next Annual General Meeting of AMFI, which is expected to take place in September.

New rules soon for wealth managers - RBI, Sebi to get more powers

A new set of rules are underway for an estimated $1-trillion wealth management industry and banking regulator the Reserve Bank of India (RBI) and capital market watchdog the Securities and Exchange Board of India (Sebi) may be made jointly responsible for implementing these regulations and keeping a watch for any violations.

The government has pooled in its various regulatory resources to frame a comprehensive rule-book for wealth management practices by seeking inputs for the same from RBI, Sebi and other financial sector regulators, a senior official said.

Given the size of the industry and therefore a higher risk of large-scale frauds or manipulations, the new rules could comprise of Sebi and RBI being given powers to impose strict penalties, he added.

While the RBI and Sebi would be primarily responsible for compliance of the rules, help would be sought from other regulators, namely commodity regulator FMC, insurance watchdog IRDA and pension fund regulator PFRDA, whenever needed, the official with one of the regulators said.

The proposed regulations are currently being given the final touches and would be soon announced by the government, he added. The new set of rules are being framed under the aegis of Financial Stability and Development Council (FSDC), a high-level regulatory body chaired by Finance Minister that was set up by the government in December 2010 in place of erstwhile High Level Coordination Committee on Financial Markets.

The FSDC has held its two meetings so far — first in December 2010 and another one earlier this year — and the issue of the proposed wealth management regulations was discussed on both the occasions. Besides, a sub-committee of FSDC held its first meeting last week, which was chaired by RBI Governor D Subbarao and was attended by Sebi Chairman U K Sinha among other regulators and Finance Ministry officials.

This Sub-Committee also discussed the regulatory issues relating to wealth management and private banking businesses undertaken by the banks.

The need for new norms was felt after an estimated Rs 400-crore fraud allegedly perpetuated by a relationship manager at a Gurgaon branch of Citibank and initial probe into the matter pointing towards various loopholes in existing regulations.

Subsequently, the government had roped in all the financial sector regulators to formulate the all-encompassing and stricter wealth management guidelines, given the huge surge in the size of assets managed by them.

Although there are no official figures for it, the size of wealth management industry is pegged at about $1 trillion — nearly double the size a couple of years ago.

 

RBI allows IRFs on 91-day T-Bills

The Reserve Bank of India has allowed interest rate futures (IRFs) trading on 91-day Treasury Bills (T-Bills). 

“We have decided to introduce interest rate futures on 91-day Treasury Bills issued by the Government of India,” the central bank said in a release on Monday. 

“The 91-day T-Bill is a liquid short-term instrument. Hence, trading in futures on T-bills will give an indication about the interest rate trend at the short of the curve,” said G A Tadas, managing director with IDBI Gilts, a public-sector bond house. 

In 2009, RBI allowed IRF trading on 10-year government securities. 

“This means we will now have futures at both long and short ends of interest rate curve,” said the head of trading with a foreign bank. 

“However, to get clarity on the interest rate curve, futures trading should be available on more instruments, with varying maturities across the curve. It would help build a mature market for interest rate futures,” the official said. 

The central bank has allowed cash settlement in futures on T-Bills. 

“The contract shall be cash-settled in Indian rupees,” said the release. This feature was not available in futures on the 10-year gilt. Instead, the contract was settled by physical delivery, resulting in the dull offtake of the instrument. 

Since the time of inception, volumes have remained thin in IRFs on 10-year gilt as they were considered illiquid by market players. Thus, the introduction of IRFs on Treasury Bills will help develop the market. The central bank had also issued directions regarding the same. 

The final settlement price of the contract shall be based on the weighted average price or yield obtained in the weekly auction of the 91-Day Treasury Bills on the date of expiry of the contract.

Fixed Maturity Plans (FMPs) which are attracting huge inflows in the last few months, might once again be able to declare indicative yields (returns),at least in a range, if market regulator Securities and Exchange Board of India (Sebi) gives the go ahead. Mutual Fund industry body, Association of Mutual Funds in India (Amfi) plans to take up the matter with new Sebi chief, UK Sinha. 

 

In 2009, Sebi had instructed all fund houses to stop declaring indicative yields on FMPs and had made it compulsory for these schemes to be listed on the stock exchanges. Industry players feel that, Sebi should allow them to declare indicative yields as many fund houses are anyways informally declaring yields to their distributors. 

FMPs are passively managed income schemes, which invest in corporate and government debt papers, thereby earning interest, which is then given back to investors on its closure. They are so called because they have a fixed tenure ranging from three months to three years and are close-ended in nature. A senior official from the leading fund house on condition of anonymity said, “there are many investors who won’t invest until one tells them about its return giving. So now there are many distributors who are secretly telling yields and selling the products.” 

According to some market participants, Amfi is taking up the issue when they meet the new Sebi chief for the first time. “We hope Sebi might look in the matter; it is very difficult to convince a retail investor without giving them yields. We are just asking regulator to allow us to indicate yields in some range, which will be useful for us in selling the product.” 

However Amfi official declined to comment on the issue. In the month of January alone over 12,700 crore were raised from 48 FMPs 

Dhirendra Kumar, CEO of Value Research says, “For the regulator, giving indicating yields (for FMPs) hints at protection of capital, which is actually not the case with FMPs (afterall, there could be default on bond repayments). Also post 2008 crises, with industry facing severe liquidity crises, regulator has taken several steps to prevent an encore.”

My Comments -

I agree word to word from Dhirendra Kumar. Such regulations are vital so that none of the investor is duped. FMPs no doubt are better products than the FDs from taxation point of view, if one falls in 20% or 30% Income Tax bracket. 

What is more important for an investor is to do proper financial planning not solely returns? If an investor will stop running solely for returns ,things would be a lot different & better.

FIIs step up buying

Inflow of Rs 625.50 crore on 4 March 2011 

Foreign institutional investors (FIIs) bought shares worth a net Rs 625.50 crore on Friday, 4 March 2011, higher than an inflow of Rs 280.90 crore on Thursday, 3 March 2011. 

The net inflow of Rs 625.50 crore on 4 March 2011 was a result of gross purchases Rs 2695 crore and gross sales Rs 2069.50 crore. There was an inflow of Rs 631.90 crore into the secondary equity markets which was a result of gross purchases Rs 2694.60 crore and gross sales Rs 2062.70 crore. The BSE Sensex had lost 3.31 points or 0.02% to settle at 18,486.45 on that day. 

There was an outflow of Rs 6.40 crore from the category 'primary market & others', on 4 March 2011, which was a result of gross purchases Rs 0.40 crore and gross sales Rs 6.70 crore.

FII inflow in March 2011 totaled Rs 1304.20 crore (till 4 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 8094.30 crore (till 4 March 2011). 

FII had bought equities worth Rs 133266 crore in the calendar year 2010. In dollar terms the net equity inflow in 2010 totaled $29.36 billion, compared to an inflow of $17.45 billion in 2009. The annual inflow in 2010 was at record level. 

There are a total of 1,709 foreign funds registered with the Securities & Exchange Board of India (Sebi).

HDFC MF Declares Dividend for HDFC Top 200

Record date for dividend is 10 March 2011 

HDFC Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of HDFC Top 200, an open ended growth scheme. The record date for dividend has been fixed as 10 March 2011. 

The quantum of dividend will be Rs 4 per unit. The scheme recorded NAV of Rs 48.173 per unit as on 3 March 2011. 

HDFC Top 200 has the investment objective to generate long term capital appreciation from a portfolio of equity and equity-linked instruments primarily drawn from the companies in BSE 200 index.

Franklin Templeton Announces Tax-Free Dividend in Templeton India Equity Income Fund

Record date for dividend is 11 March 2011 

Franklin Templeton Mutual Fund has announced a tax-free dividend of Rs.0.70 per unit (Face Value of Rs.10), in its open end equity fund - Templeton India Equity Income Fund. All investors registered in the Dividend Plan as on 11 March 2011 will receive this tax-free dividend. Pursuant to payment of dividend, the NAV of the scheme would fall to the extent of payout and statutory levy (as applicable). 

The record date for the dividend is 11 March 2011 and any purchases on or before this date will be eligible for the dividend. Under the dividend reinvestment plan, the dividend declared will be reinvested in the Fund at the NAV of 14 March 2011 and unitholders will be allotted additional units for the dividend amount. 

Templeton India Equity Income Fund was launched in May 2006 as an open fund and currently manages around Rs.1095 crores of assets for over 201,500 investors. Since its inception, it has been able to deliver good performance, through its focus on high dividend yield stocks in India and emerging markets.

Sundaram MF Declares Dividend For Balanced Fund

Record date for dividend is 11 March 2011

Sundaram Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Sundaram Balanced Fund. The record date for dividend has been fixed as 11 March 2011. 

The quantum of dividend will be Rs 6.00 per unit as on the record date. The scheme recorded NAV of Rs 16.6899 per unit as on 4 March 2010. 

Sundaram Balanced Fund is an open-end hybrid scheme. The investment objective of the scheme is to generate capital appreciation and current income, through a judicious mix of investments in equities and fixed income securities.

Weekly Scenario: Equity Funds Gain

Renewed FII buying along with short covering post the Union Budget helped Indian equity markets bounce back from recent lows and close the week ended 4 March 2011 on a strong note. Market sentiments were also boosted by some easing in international oil prices. Mid and Small cap stocks continued to underperform large caps. Among the major categories in equity funds, Index Funds and Large Cap Funds were the highest gainers by 4.22% and 4.08% respectively over the one week period ended 4 March 2011. It was followed by Tax Saving Funds by 3.62%, Multi Cap Funds by 3.57% and Mid Cap Funds by 2.98% 

Indian bond markets gained as the fiscal deficit and borrowing projections for FY12 came in below market expectations. Further easing in primary article inflation index levels also aided sentiment. Among the debt fund categories, Gilt Fund – Medium & Long Term gained the highest by 0.27%, followed by Gilt Funds – Short Term by 0.22%, Income Funds by 0.20%, Floating Rate Income Funds – Long Term by 0.18%, Short Term Income Funds by 0.17%, Floating Rate Income Funds – Short Term, Ultra Short Term Funds and Liquid Funds by 0.15% each. 

Equity Diversified Funds

 

Large Cap Funds: Among the schemes in the large cap funds, JM Equity Fund gained the maximum of 4.80%, followed by Morgan Stanley Growth Fund which climbed by 4.64%, BNP Paribas Equity Fund and L&T Hedged Equity Fund jumped 4.55% each among others. Escorts Growth Plan and Reliance NRI Equity Fund ended at the bottom this category gaining by 1.87% and 2.66% respectively. 

Mid Cap Funds: HSBC Midcap Equity Fund was the top performer, which gained by 5.15%, followed by Sundaram Equity Multiplier which climbed 4.43% and JM Mid Cap fund rose 4.40% among others. Axis Midcap Fund and ICICI Pru Emerging S.T.A.R Fund ended at the bottom of this category gaining by 0.30% and 1.08% respectively. 

Multi Cap Funds: Bharti AXA Equity Fund was the top performer, which gained 5.03%, followed by Bharti AXA Equity Fund - Eco which climbed 5% and Axis Equity Fund rose 4.75% among others. Edelweiss Absolute Return Fund and Birla Sun Life India Opportunities Fund – B were the schemes to deliver lower returns in this category gaining by just 0.09% and 1.78% respectively. 

 

Tax Savings Funds

 

Bharti AXA Tax Advantage Fund - Eco and Bharti AXA Tax Advantage Fund were the top performers with a return of 4.98% and 4.96% respectively during one week period. Among the other schemes in the category, L&T Tax Saver Fund rose 4.80%, Axis Tax Saver Fund climbed 4.49% and Baroda Pioneer ELSS ‘96 surged 4.33%. Escorts Tax Plan and ICICI Pru Tax Plan were the schemes to deliver lower returns in this category gaining by just 1.67% and 1.98% respectively. 

Index Funds

 

The NAV of Index Fund category advanced by 4.22% over one week period with Principal Index Fund being the top gainer with a return of 4.42%. It was followed by Tata Index Fund - Sensex Plan and LICMF Index Fund - Nifty Plan with 4.41% each. HDFC Index Fund-Sensex Plus Plan and ICICI Pru Nifty Junior Index Fund ended at the bottom of this category posting weekly returns of 3.11% and 3.64% respectively. 

Sector Funds

 

Banking Funds category gained 5.06%, with JM Financial Services Sector Fund gaining 5.75% and Sundaram Financial Services Opportunities gaining by 5.24% among others. Sahara Banking & Financial Services Fund ended at the bottom of this category with a return of 4.59%. 

FMCG Funds category gained 4.08% over one week period ended 4 March 2011. SBI Magnum SFU - FMCG Fund and ICICI Pru FMCG Fund were the top gainer in this category. Their NAV appreciated by 5.03% and 3.74% respectively over one week period. 

NAV of Pharma Funds category advanced 1.63%, with UTI-Pharma & Healthcare Fund ending the week as the biggest gainer with an increase in NAV by 2.01%; it was followed by Reliance Pharma Fund which gained 1.74%. 

Infotech Funds category gained 1.60% over one week period ended 4 March 2011. SBI Magnum SFU – Infotech Fund was the top gainer with a return of 1.95%. 

Hybrid Funds

 

UTI-CCP Advantage Fund and ING Balanced Fund were the highest gainer in equity oriented balanced fund category with their NAV appreciating by 3.51% and 3.29% respectively. Principal SMART Equity Fund, ICICI Pru Equity & Derivative – Wealth Optimizer and ICICI Pru Child Care Plan-Gift Plan were the worst performer in this category gaining by 1.46%, 1.51% and 1.63% respectively. 

LICMF Children's Fund was the highest gainer in debt oriented balanced fund category as its NAV appreciated by 2.42%. Tata Young Citizens Fund was the next highest gainer by 1.84%. Escorts Income Bond and DWS Money Plus Advantage Fund were the worst performers in this category gaining by 0.11% each.

Mutual funds in selling mode

Outflow of Rs 3.70 crore on 4 March 2011 

Mutual funds (MFs) sold shares worth a net Rs 3.70 crore on Friday, 4 March 2011, as against an inflow of Rs 46.50 crore on Thursday, 3 March 2011. 

The net outflow of Rs 3.70 crore on 4 March 2011 was a result of gross purchases Rs 512.80 crore and gross sales Rs 516.50 crore. The BSE Sensex had fallen 3.31 points or 0.02% to settle at 18,486.45 on that day. 

MFs bought shares worth net Rs 455.70 crore in March 2011 (till 4 March 2011). Mutual funds had bought equities worth a net Rs 1427.10 crore in February 2011.

Sebi proposes XBRL reporting system for mutual funds

Sebi has proposed a new reporting system for mutual funds based on XBRL technology -- a globally accepted standardised business reporting tool that enables easy dissection of bulk documents without delay.
The Securities and Exchange Board of India (Sebi), which regulates fund houses, has issued a draft structure of the proposed XBRL (eXtensible Business Reporting Language) system for all the regulatory filings to be made by mutual funds.

XBRL technology enables the computers read and divide the information provided in the filings under various heads and thus makes it easy to find any relevant details and to identify any irregularities.

Sebi has been working to put in place a unified regulatory filing system for all listed companies and market entities in a standardised format based on XBRL technology.

To start with, Sebi is likely to make the new business reporting mechanism mandatory for mutual funds and then expand this system to other segments in phases.

"SEBI intends to set up a comprehensive reporting, filing and dissemination system for filing of information reports in XBRL by listed entities, registered intermediaries and other entities," a senior official said.

The new system, called SUPER-D (Sebi Unified Platform for Electronic Reporting - Dissemination), is being developed in such a way that it is capable to manage simultaneous filing of 500 documents on normal days and have peak-period capacity to handle 15,000 simultaneous filings.

Besides disseminating the information on real-time basis to investors and others, the XBRL technology-based new system will also help Sebi itself as also other regulatory and investigative agencies in monitoring any irregularities in the affairs of companies and market intermediaries.

In addition to mandatory regulatory filings, including financial statements, the entities would have to use the new XBRL-based platform for all their reporting purposes to the regulator, the official added.

The system would also help in analysing the data for research and regulatory purposes and would have provision for automated report generation for regulatory purposes.

Once the system is put in place, all listed companies, as also market entities like foreign and domestic institutions and brokerages would need to make all their regulatory filings, including financial reporting and other disclosures, to the new unified platform in a common standardised format.

Currently, BSE and NSE have a XBRL-based financial reporting platform for listed companies for all their filings and the system helps the investors get real-time access.

Maintain Persistency or lose license: IRDA to Agents

The Insurance Regulatory and Development Authority (IRDA) has introduced a new regulatory norm for life insurance agents wherein they (agents) face the risk of losing their licenses if half their policies sold lapse within three years. 

Life insurance agents will now have to ensure that 50% of the policies they sell till March 2014 do not lapse, beyond which they will have to maintain a persistency of 75% for the remaining policies, according to the new norm. From July 2011, all agents will have to adhere to the new persistency norm.

Moreover, in order to move one step forward and be vigilant, IRDA has also directed that employees of insurance companies cannot engage their relatives as agents in the same insurance company. However, as a relief agents would be eligible to take over orphan policies and be entitled to receive 50% of the deferred commission, which the original agent was eligible for. A policy becomes orphaned when its original agent quits the company and is not serviced by anyone. 

Insurance agents, in order to earn high commissions sell various insurance policies to individuals dangling the carrot of tax benefit. But later policyholders struggle to meet their premium obligations for various reasons - one being mis-selling. This thus has led to an industry average lapse of around 30%, due to which customers lose and companies gain (as the policyholder is not refunded any premiums in most cases). In our opinion the initiative taken by IRDA is a disciplinary one, and it would instill insurance products being promoted in a wise manner to serious customers, and would ensure better service being provided by insurance agents, hopefully.

Persistency Ratio : A ratio which reveals the percentage of policies that continue paying premium over the premium paying term. The higher the ratio the better it is.

No tax return filing for salary income till 5 Lakh

Salary earners having an income of less than Rs 5 lakhs will not have to file tax returns from this year, a finance ministry official said.
"Salaried people, may be up to Rs 5 lakh...they need not file the (income tax) return," CBDT chairman Sudhir Chandra told reporters at the customary post-Budget press conference.  

The exemption from filing tax returns come into effect from the assessment year 2011-12.

In case such a salary earner has income from other sources like dividend, interest etc. and does not want to file returns, he will have to disclose such income to his employer for tax deduction, Chandra said.

The government, he said, is working out a scheme and will notify it "very soon".

The Form 16 issued to salaried employees will be treated as Income Tax Return, he added.

FIIs allowed to invest $20 b more in bonds of infrastructure cos

In keeping with its thrust on infrastructure development and also deepening the corporate debt market, the Centre has hiked the foreign institutional investors (FII) investment limit in corporate bonds to $40 billion. 

It represents an increase of $20 billion over the earlier limit of $20 billion under this window.

The additional limit of $20 billion will be available to FIIs only for investments in corporate bonds issued by companies in the infrastructure sector, the Finance Minister, Mr Pranab Mukherjee, said in his Budget speech. 

Also, the investments would have to be made in bonds with residual maturity of over five years. 

This move would in effect take the overall limit for FII investment in corporate bonds of companies in the infrastructure sector to $25 billion. 

Prior to this announcement, the total FII investment limit in corporate bonds was pegged at $20 billion, including a $5-billion sub-limit for bonds with a residual maturity of over five years and issued by companies in the infrastructure sector. 

Meanwhile, Mr Mukherjee today announced that FIIs would also be permitted to invest in unlisted bonds with a minimum lock-in period of three years. This is being allowed as most of the infrastructure companies are organised in the form of special purpose vehicles, it was pointed out. 

However, the FIIs will be allowed to trade among themselves during the lock-in period.

To enable higher FII investment flows into the corporate debt market, the Centre had in January 2009, at the peak of the financial crisis, raised the FII investment cap in corporate bonds to $15 billion from $6 billion. 

This limit was further hiked by $5 billion in September 2010 but with a rider that this incremental limit be invested in securities with a residual maturity of over five years issued by companies in the infrastructure sector. 

 

This move was intended to ensure greater participation of FIIs on a longer term basis and also enable the flow of long-term resources to the infrastructure sector.

FM allows foreign access, gives MFs reason to smile

The Indian mutual fund industry, reeling under strict regulatory norms related to commissions and disclosures, has finally got a reason to smile. Finance Minister Pranab Mukherjee, while presenting the Union Budget 2011-12, has allowed fund houses to tap foreign nationals for investing in equity schemes. 

“To liberalise the portfolio investment route, it has been decided to permit Sebi-registered mutual funds to accept subscriptions from foreign investors who meet the KYC (Know Your Customer) requirements for equity schemes,” Mukherjee said while presenting the Budget in Parliament. “This would enable Indian mutual funds to have a direct access to foreign investors and widen the class of foreign investors in the Indian equity market, he added.

It is widely believed that the move would lead to a lot of mid-sized foreign funds and wealthy individuals looking at the Indian equity market more seriously. According to the current norms, foreign investors need to first register with the Securities and Exchange Board of India (Sebi) before investing in the domestic equity markets. As a result, mid-sized and smaller funds which did not have a significant India allocation chose alternative investment avenues, including offshore funds and participatory notes (PNs). Going forward, they just need to comply with the KYC norms and start investing. 

Experts feel the government’s initiative could prove to be a “game-changer” for the Indian fund industry, as this would pave the way for large global investors to invest directly into mutual fund schemes.