Motilal Oswal MOSt Focused Midcap 30 Fund Floats On

NFO period is from 03 February to 17 February 2014 

Motilal Oswal Mutual Fund has launched a new fund named as Motilal Oswal MOSt Focused Midcap 30 Fund, an open ended equity scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 03 February and closes on 17 February 2014. 

The investment objective of the scheme is to achieve long term capital appreciation by investing in a maximum of 30 quality mid-cap companies having long-term competitive advantages and potential for growth. 

The scheme offers growth and dividend option (payout and re-investment) under both regular plan and direct plan. 

The scheme would allocate 65% to 100% of assets in equity and equity related instruments selected between Top 101st and 200th listed companies by market capitalization, upto 25% in equity and equity related instruments beyond the Top 200th listed company and with market capitalization not lower than the smallest company in the CNX Midcap Index with high risk profile and upto 10% in debt, money market instruments, G-Sec, Bonds, Cash and Cash equivalents etc. with low risk profile. 

The minimum application amount is Rs 5,000 and in multiples of Rs 1 thereafter. 

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 10 crore under the scheme during the NFO period. 

Entry load charge will be Nil for the scheme. 

Exit Load: If redeemed / swithched-out on of before 1 year from the date of allotment, the exit load charge will be 2%. 

If redeemed / swithched-out after 1 year from the date of allotment, the exit load charge will be Nil. 

The entire exit load (net of service tax) charged, if any, shall be credited to the scheme.
Benchmark Index for the scheme is CNX Midcap Index. 

The fund managers for the scheme are Taher Badshah (Equity component) and Abhiroop Mukherjee (Debt component).

Increasing Monthly Pension Paid to Senior Citizens under IGNOAPS

The Ministry of Rural Development is implementing the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) under which Central assistance is given towards pension @ Rs.200/- per month to persons above 60 years and @ Rs. 500/- per month to persons above 80 years belonging to a household below poverty line. The States/UTs have been urged to contribute at least an equal amount from their own resources to this Central assistance. 

A Task Force has been constituted under the Chairmanship of Member Planning Commission to prepare a proposal for a Comprehensive National Social Assistance Programme. The Task Force has considered various issues, demands and suggestions relating to pensions, including old age pension, received from various quarters and has submitted its report inter alia, recommending expanding the scope of coverage and increasing the quantum of pension.

RBI announces Cancellation of Deferred Auction of Dated Securities and Switching of G-Sec

The RBI on 05 February said that securities from 2014-15 and 2015-16 maturity buckets for face value of about Rs 27000 crore have been successfully switched to longer tenor security with an institutional investor last week. Also it has decided to cancel the deferred auction scheduled on 17 January 2014 amounting Rs 15000 crore. This would result in decrease in Government market borrowing programme for 2013-14 to that extent.

Moody's: Asian Liquidity Stress Index Continues to Rise in January

Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) rose for a second month in January, to 22.4% from 20.0% in December. 

"The index measures the percentage of high-yield companies with an SGL-4 score and increases when speculative-grade liquidity appears to decrease. The reading decreased gradually during 2013 after hitting a recent high of 28.6% in December 2012," says Laura Acres, a Moody's Senior Vice President. 

"The January increase reflects both the net addition of three companies (to 26) to the roster of those with our lowest (weakest) speculative-grade liquidity score (SGL-4) and a net increase of one (to 116) in the number of companies with speculative-grade ratings," adds Acres. 

Acres was speaking on the release of Moody's latest report on the index, entitled "Asian Liquidity Stress Index." 

The reading remains well below the record high of 37% reached during the fourth quarter of 2008 amid the global financial crisis and is just above the long-term rolling average (20%) and in line with the trailing 12 month average (22.5%) for the Asian LSI. 

The liquidity sub-index for Chinese speculative-grade companies rose for a third consecutive month, jumping to 27.0% from 22.2% in December. The increase reflects the addition of three companies with SGL-4 scores while the number of rated high-yield Chinese companies remained 63. 

China's high-yield property index rose to 23.7% from 21.1% in December as the number of companies with an SGL-4 score increased by one to 9 and the number of rated high-yield property developers remained 38. 

The Indonesian sub-index inched up to 4.0% from 3.8%, ending three months with no change. The number of SGL-4 companies was unchanged at one, but the number of speculative-grade Indonesian companies decreased by one to 25. 

The Australian index, which doesn't factor into the Asian LSI, declined for a second month, to 26.7% from 28.6% in December, as the number of speculative-grade companies rose by one to 15 and the number of those with an SGL-4 score remained four. 

Moody's had assigned speculative-grade ratings to 116 issuers in Asia (excluding Japan and Australia) covering $65.1 billion of rated debt by the end of January, up from 115 issuers and $61.7 billion of rated debt by the end of December.

Ind-Ra: Health Care Sector's Earning Drivers Leading to Continued Capex

India Ratings & Research (Ind-Ra) has a stable outlook on the health care sector and all its rated sector companies for FY15. The agency believes growth in the sector will continue to be driven by the wide gap between demand and supply in health care services. Key drivers for demand are increasing lifestyle-related health problems, the sector's immunity to economic cycles, improving health insurance penetration, increasing awareness and disposable income. The sector's growth is also likely to be boosted by continuing government initiatives and increasing medical tourism in the country. 

The industry is attracting investments towards health services (hospital beds) and the allied industries such as medical technologies, diagnostics, etc. Ind-Ra believes a majority of the investments in FY15 will continue to come from the private sector. Revenue of most health care players will grow 10%-15% yoy in FY15 due to continuous expansion in the bed capacity. However, the overall profitability of the sector might be affected due to long break-even period of new capex and high manpower costs. Ind-Ra believes credit profiles, especially of the standalone hospitals with recent bed additions, are likely to be stressed in FY15. However, larger players with multiple hospitals leading to higher economies of scale would be better placed. 

The government has made important contribution to incentivise the investments in the sector through its insurance schemes, encouraging investments in public private partnership and also qualifying hospitals (including medical colleges, paramedical training institutes and diagnostics centers) for infrastructure lending. These initiatives are likely to positively impact the occupancy levels and could also mean better lending terms in the form of concessional interest rates, longer moratorium and maturity aiding in the capex plans of health care players. The initiatives could also enhance the credit profiles of entities, especially in the initial years of the capex when optimum utilisation is yet to be achieved. 

Increasing competitive intensity and high real estate costs involved in the Tier I cities have shifted the investors' focus towards relatively lower cost, under-penetrated Tier II and Tier III cities and also towards asset-light, less capital intensive business models. Ind-Ra believes certain business models such as single specialty, hub-and-spoke, health mall and day care/ambulatory services centres will attract investors in FY15. 

What Could Change The Outlook 

Consolidation of Operations: Continuous capex in the last few years has led to a rise in borrowings for many players, impacting their credit profiles. Consolidation of operations leading to improved credit profile will be a positive for the sector Timely completion of the planned expansion along with attaining optimum occupancy rates will also lead to a positive outlook revision for both the sector and companies. 

Reducing the gap between the demand and supply of doctors and medical staff will also be a long-term positive for the sector. 

Debt-led Expansions, Commissioning Delays: Continuous debt-led capex, coupled with delays in commissioning of facilities and stressed profitability due to low occupancy could affect the outlook negatively.