MASTER MIND FINNASSET

Monday, August 02, 2010

Crude nears $79 mark

Prices pare earlier losses in tandem with US equities

Crude oil prices managed to pare their earlier losses on Friday, 30 July 010 at Nymex and ended higher for the day. Prices rose in tandem with US equities which managed to shed most of their earlier losses in the course of the day and finish near the unchanged mark at the end.

On Friday, crude oil futures for light sweet crude for September delivery closed at $78.95/barrel (higher by $0.59 or 0.8%). For the week, crude ended marginally higher.

For the month of July, crude ended higher by 4.5%. Before this, in June, oil prices shed 2.7%. Crude ended second quarter of CY 2010 lower by 9.3%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 0.5%.

The Commerce Department in US reported on Friday that U.S. economy expanded at an annualized rate of 2.4% in the second quarter, but that was a bit below the 2.5% that had been widely expected and down from the first quarter's upwardly revised 3.7% growth rate. It was also well below the average 4.4% increase over the past six months. Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.

Disappointing GDP data had stocks down more than 1% in the early going, but for the second straight session they fought their way higher only to struggle near the neutral line.

Earlier during the week, EIA reported an increase of 7.3 million barrels of crude stockpiles for the week ended 23 July against an expected increase of 2.3 million barrels. The EIA also reported an increase of 100,000 barrels for stockpiles of gasoline and 900,000 barrels for distillates. Market had predicted weekly increases of 1.1 million barrels for gasoline and 1.8 million barrels for distillates.

Among other energy products on Friday, reformulated gasoline for September delivery added 2 cents, or 1%, to settle at $2.12 a gallon. Gasoline prices rose 3% in July.

Also, on Friday, natural gas for September delivery added 10 cents, or 2%, to settle at $4.92 per million British thermal units. Natural-gas futures had a winning July, hitting a 6.5% gain for the month.

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.

Bullion metal prices stay steady for the week

Gold registers worst monthly drop in seven months

Bullion metal prices ended higher on Friday, 30 July 2010 at Comex. A weaker than expected second quarter GDP report increased the appeal of precious metals as an alternate investment.

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. Recently, the embattled euro has played stronger role in moving prices rather than dollar fluctuation. Bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

On Friday, gold for December delivery ended at $1,183.9 an ounce, higher by $12.7 (1.1%) on the New York Mercantile Exchange. For the week, gold ended lower by a mere 0.3%.

Gold ended the month of July lower by 5%. It was the worst monthly loss for gold since December 2009. Before this, it ended June higher by 2.5%. For the second quarter, gold ended up by 12%, its seventh consecutive quarterly gain. For the first quarter of this year, gold rose by 1.7%. On a year to date basis, gold is higher by 8.9%.

On Friday, September Comex silver futures ended higher by 39 cents (2.2%) at $18 an ounce. For the week, silver ended almost unchanged. For the month of July 2010, silver shed 3.7%. For the second quarter, silver ended higher by 3.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.2%.

Data showed that U.S. economy expanded at an annualized rate of 2.4% in the second quarter, but that was a bit below the 2.5% that had been widely expected and down from the first quarter's upwardly revised 3.7% growth rate. It was also well below the average 4.4% increase over the past six months.

Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.

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.

FII inflow crosses Rs 17000 crore in July 2010

Inflow of Rs 1040.20 crore on 30 July 2010

Foreign institutional investors (FIIs) bought shares worth a net Rs 1040.20 crore on Friday, 30 July 2010, compared to a massive inflow of Rs 4438.40 crore on Thursday, 29 July 2010.

The net inflow of Rs 1040.20 crore on 30 July 2010 was a result of gross purchases Rs 3394.40 crore and gross sales Rs 2354.20 crore. There was an inflow of Rs 309.90 crore into secondary equity markets which was a result of gross purchases Rs 2663.50 crore and gross sales Rs 2353.60 crore. The BSE Sensex fell 123.71 points or 0.69% to 17,868.29 on that day.

There was an inflow of Rs 730.30 crore in the category 'primary market & others', which was a result of gross purchases Rs 730.90 crore and gross sales Rs 0.60 crore.

FII inflow in July 2010 totaled Rs 17657.60 crore. FIIs had bought equities worth Rs 10508.40 crore in June 2010. FII inflow in the calendar year 2010 totaled Rs 48734.90 crore (till 30 July 2010).

There are a total of 1,730 foreign funds registered with the Securities & Exchange Board of India (Sebi).

IRDA to releases draft norms on health insurance policies soon

Insurance regulator IRDA has announced that it will soon come out with draft norms that define terms like critical illness and hospitalization cost, among others, a move that will reduce the scope for disputes between insurers and hospitals.

The Chairman of the IRDA has said that the Insurance Regulatory and Development Authority (IRDA) would lay down a standard definition for major critical illnesses under health insurance, which would reduce confusion between Third Party Administrators (TPAs), insurers and policyholders.

Gross premium collection rises 28.4% for non-life insurers in June 2010

Non-Life Insurers records 21.8% growth in premium during April-June 2010

Gross premium underwritten by non-life insurers increased 28.4% to Rs 3353.6 crore in June 2010 compared with Rs 2611.9 crore in June 2009. The four public sector players witnessed 27.0% growth in premium income to Rs 1990.1 crore, while 14 private non-life insurers posted 30.4% increase in premium income to Rs 1363.5 crore in June 2010 over June 2009. The premium collection of non-life insurers has increased 21.8% to Rs 10751.6 crore in April-June 2010.

Among the public sector non-life insurers, New India and National Insurance have recorded strong growth in premium income at 29.3% to Rs 623.0 crore and 28.3% to Rs 485.9 crore, respectively in June 2010. Meanwhile, United India and Oriental witnessed 24.6% and 25.0% increase in premium underwritten to Rs 461.0 crore and Rs 420.2 crore, respectively, in June 2010.

Among the major private non-life insurers, the premium income of ICICI Lombard and Bajaj Allianz increased 54.8% to Rs 342.0 crore and 8.3% to Rs 227.6 crore, respectively. The premium collection of IFFCO-Tokio also increased 5.3% to Rs 149.3 crore, but that of Reliance General dipped 11.2% to Rs 152.5 crore, recording fall for second month in June 2010. However, the premium income of Tata AIG and Royal Sundaram increased 43.5% to Rs 78.6 crore and 36.2% to Rs 90.5 crore, respectively in June 2010.

Cholamandalam MS and Future Generali witnessed 18.4% and 52.5% increase in premium collection to Rs 78.0 crore and Rs 44.3 crore, respectively. The premium income of Shriram General and Bharti Axa Surged 172.1% to Rs 49.8 crore and 183.9% to Rs 37.6 crore. Meanwhile, premium collection of Universal Sompo zoomed 257.2% to Rs 27.8 crore in June 2010. Further, The SBI General and Raheja QBE, newer players, recorded a premium collection of Rs 1.2 crore and Rs 0.4 crore in June 2010.

The five specialized insurance players in the field of export credit, health and agriculture have recorded 20.0% increase in premium income to Rs 236.6 crore in June 2010 and 27.1% surge to Rs 720.8 crore in April-June 2010. Among the specialized institutions, Star Health & Allied Insurance posted 30.0% increase in premium collection to Rs 97.7 crore, while premium collection for Apollo Munich Health galloped 133.1% to Rs 11.1 crore. Premium income of ECGC increased 9.7% to Rs 74.5 crore, while that of Agriculture Insurance rose 0.6% to Rs 52.0 crore in June 2010. Max Bupa Health, which started operation in March 2010, has earned the premium income of Rs 1.3 crore in June 2010.

During April-June 2010, the premium collection of ICICI Lombard and Bajaj Allianz has increased 25.7% and 13.1%, respectively, while that of IFFCO-Tokio and Tata-AIG climbed up 13.3% and 23.8%, respectively. The premium collection of HDFC ERGO, Future Generali, Bharti Axa and Shriram zoomed 76.4%, 74.5%, 210.3% and 124%, respectively during

April-June 2010. The premium collection of four state owned players such as New India, National Insurance, United India and Oriental increased 20.9%, 27.2%, 22.5% and 17.3%, respectively during April-June 2010. However, the premium income of Reliance General declined 23.0% in April-June 2010.

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