Product Updates

FII flows will halve next year: Neelkanth Mishra Flows from overseas investors are likely to slow down substantially next year, says foreign brokerage Credit Suisse. The Indian markets, however, could deliver up to 30% returns in the next two years led by corporate earnings growth. Neelkanth Mishra, managing director-equity research, Credit Suisse says the sharp drop in crude oil prices isn't very positive for the Indian market. Explaining the market outlook for 2015, Mishra said that the Indian market is an "island of stability" considering what is happening in the rest of the world. Edited excerpts from a press briefing by Credit Suisse on 2015 outlook: On impact of declining oil prices: The decline in oil prices is due to weak world demand. Nifty and oil have positive correlation. In 20 years, you will struggle to find negative correlations between Indian markets and oil. Weak oil prices will hurt India's exports. So the benefit of $35 billion to the CAD on account...

Sebi looks to clear the way for e-IPOs - Livemint Mumbai: India's capital market regulator is set to propose a raft of changes in existing norms to clear the way for initial public offerings (IPOs) in the electronic mode, or e-IPOs, which will likely result in wider investor participation in first-time share sales and lead to better price discovery. The primary market advisory committee (PMAC) under the Securities and Exchange Board of India (Sebi) proposes to give brokers and depository participants (DPs) greater powers and authorize them to upload bids for IPO shares from investors on a real-time basis after accepting applications with the required payments, said two people familiar with PMAC discussions. At present, applications for IPOs can be uploaded on a real-time basis only through ASBA (application supported by blocked amount); only self-certified syndicate banks are authorized to manage and offer ASBA, which allows application money to stay in an investor's b...

Ride choppy markets with MF triggers With markets notching record highs every other day, but select economy indicators still subdued, safeguard your gains before a correction Undecided whether to sell stock market investments after the market run-up or looking to enter but awaiting a correction. There are mutual fund tools you can use to avoid being glued to the market indices and enter or exit investments based on your personal preference. A mutual fund trigger option lets you invest at a pre-set level, for instance, invest Rs 25,000 when the market falls by 5-10%. Even redemptions can be timed by setting a trigger at a desired level. Fund houses such as Axis Mutual Fund, Birla, HDFC, DSP BlackRock, ICICI Prudential, IDFC, Mirae Asset Managers Principal, Reliance, Tata, Quantum and UTI offer the trigger facility. These triggers help you build a profit discipline and ensure you don't get carried away when markets are on a euphoric ride. A market expert not willing to...

SAIL's Rs 1,700-cr disinvestment successful Five per stake sale in Steel Authority of India (SAIL) by the government, the first leg of this financial year's disinvestment programme, received an encouraging response from investors on Friday. The Rs 1,700-crore offer for sale (OFS) was subscribed more than two times, while the portion reserved for retail investors — those investing up to Rs 2 lakh — was subscribed nearly three times. Experts said the success of the SAIL offering would boost the confidence of the government, which has set a record Rs 58,425-crore gross disinvestment target for this financial year to help bridge its fiscal deficit. According to investment banking sources, Life Insurance Corporation of India invested as much as Rs 700 crore, about 40 per cent of the issue. Other prominent investors included State Bank of India (Rs 150-200 crore), United India Insurance (Rs 15 crore) and ICICI Bank (Rs 100 crore). The issue also saw participation from Hong...

See reversal of interest rates irrespective of what RBI does: Madan Sabnavis, CARE Ratings I believe that banks should be in a position to take a decision on interest rates irrespective of what the RBI does.  In a chat with ET Now, Madan Sabnavis, Chief Economist, CARE Ratings, speaks on the RBI policy and rate cuts. Excerpts: ET Now: We have seen key banks cut deposit rates. The point that there could be a transmission across banks even before the RBI blinks, what is the tendency of that happening before the next credit policy review? Madan Sabnavis: No, in fact, this is a very interesting development which has taken place because if you look at real impact of, say, the repo rate being cut on in terms of your overall cost of funds, it is a very small amount actually. Therefore, I believe that banks should be in a position to take a decision on interest rates irrespective of what the RBI does. So today what we are actually seeing is that banks are being guided more b...

Sebi may clamp down on mutual fund upfront fees; concerned over mis-selling due to high commissions Sebi is uneasy over the high commissions mutual funds paid distributors in the last six months to sell new fund offers (NFOs), which resulted in mis-selling. MUMBAI: Capital market regulator Securities and Exchange Board of India (Sebi) may soon put restrictions on upfront commission paid by mutual funds to distributors, said four people familiar with the matter. The regulator is framing rules that could result in mutual funds shifting to a predominantly trail-fee model, where distributors are paid in a staggered manner till the time their clients remain invested in a scheme. Sebi is uneasy over the high commissions mutual funds paid distributors in the last six months to sell new fund offers (NFOs), which resulted in mis-selling. In October, Association of Mutual Funds of India (AMFI), the industry trade body, voluntarily agreed that these asset managers would move to a trail c...

SAIL Offer for Sale @ Rs. 83 – December 2014 With its first divestment candidate this financial year, the government today fixed Rs. 83 as the base floor price for SAIL offer for sale (OFS) which is scheduled to be carried out on the stock exchanges today. Targeting Rs. 43,425 crore in divestment proceeds this fiscal year, the government has decided to sell its 5% stake in the company i.e. 20.65 lakh shares. At Rs. 83 a share, it seems that the government will be able to raise a minimum of Rs. 1,714 crore from this sale. Currently, the government holds about 80% stake in the company. Before we consider the factors to decide whether we should invest in this OFS or not, lets first check the basic details of this offer. Shares on Sale - The government will be selling 20,65,26,264 shares in the offer for sale, out of which 10% shares i.e. 2,06,52,626 shares have been reserved for the retail investors. Offer Price - Share price of SAIL closed at Rs. 85.25 on the NSE today. Th...

Sebi bars over 90 entities linked to Moryo group Business Standard The Securities and Exchange Board of India (Sebi) on Thursday barred over 90 entities connected to Moryo Industries from accessing capital markets; making it one of a holistic action by Sebi against large number of entities in one order. In the interim order the markets regulator observed that the Moryo industries, its promoters and other related entities indulged in fraudulent and manipulative market transactions to create artificial volumes by trading in the scrip. In the ex-parte order Sebi, Whole Time Member, Rajeev Kumar Agarwal, also observed that the Moryo Group misused the stock exchange platform to reduce the income tax dues. "Moryo Group has misused the stock exchange system to generate fictitious long term capital gains (LTCG) to convert their unaccounted income into accounted one with no payment of taxes as LTCG is tax exempt. I prima facie find that the above modus operandi helped the conc...

US Fed officials stress data over dates as rate rise case builds Washington: US Federal Reserve (Fed) officials are signalling more confidence in the economy that moves them nearer to raising interest rates, and are stressing the liftoff is linked to data rather than dates to avoid unsettling markets. Fed vice-chairman Stanley Fischer said on Tuesday that the central bank was getting closer to replacing a vow to hold rates low for a "considerable time" with guidance that tighter monetary policy will hinge on the economy's performance. The Federal Open Market Committee (FOMC) is embarking on a critical phase in its seven-year battle with a financial crisis, a recession and a sub-par recovery. If the economy keeps improving, officials will need to signal to investors that they'll raise the federal funds rate without sending bond yields higher and slowing growth. "FOMC members are a little bit challenged by the fear that they don't want to rattle marke...

Mumbai: The Reserve Bank of India (RBI) on Wednesday enhanced the maximum balance that can be made available in a prepaid instrument (PPI) to Rs.1 lakh from Rs.50,000. The central bank also permitted gift cards with a validity of three years, up from the current one year. Also, two new card categories have been introduced; one, those issued to family members from fully know-your-customer (KYC) compliant bank accounts; and two, cards for visiting foreign nationals and non-resident Indians (NRIs). PPIs include prepaid cards, mobile wallets, Internet wallets and paper vouchers. The norms for PPIs have been changed "based on a comprehensive internal review and the feedback received from the entities currently authorized to issue prepaid payment instruments," RBI said. With the change in norms, a fully KYC-compliant individual can now load up to Rs.1 lakh in a prepaid instrument. Additionally, such customers can transfer funds from their accounts to a prepaid instrument i...

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Mutual fund houses gearing up for new breed of retirement linked mutual funds Mutual fund houses – Axis and SBI have filed draft offer documents with SEBI to launch their retirement linked mutual funds having some unique features like insurance coverage, annuity etc. Axis MF's Retirement Planning Fund, an open ended mutual fund retirement linked plan, will invest in equity and debt. The scheme will offer two plans – compulsory lock-in and no lock-in. While compulsory lock-in can be redeemed only after an investor attains 60 years of age, no lock-in plan can be redeemed at any point of time; however, it will be subject to an exit load for three years. The scheme comes with features like life insurance coverage and annuity. The fund house will provide term life insurance coverage to its unit holders who have not turned 60. Interestingly, the fund house will pay premium from the fund's expense ratio. The annuity will be offered to investors who have turned 60. This is a v...

Debt MFs turn attractive as rate likely early next year With the Reserve Bank of India (RBI) hinting that the interest rate easing might start early-2015, debt mutual fund schemes is likely to see increased investor interest. Some fund managers are even expecting the returns of equity and debt to even converge over the next six- to 12-month period. The benchmark 10-year government bond closed at 7.96 per cent, a level last seen in August last year. Experts say bond yields are expected to continue with their downward trajectory taking comfort from monetary policy statement that "a change in the monetary policy stance is likely early next year." Fund managers are advising investors to continue with the existing debt investments. They say increasing the portion of debt component in their portfolio would be prudent as the equity market returns could taper in 2015 following a sharp 35 per cent gains this year. Along with capital appreciation, experts say, certain de...

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India's market capitalisation crosses Rs 100 trillion The Indian stock market on Friday achieved an important landmark by crossing Rs 100 trillion ($1.66 trillion) in market capitalisation. The feat was achieved when the benchmark BSE Sensex jumped 383 points, or 1.34%, to life high of 28,822.37. On closing basis, however, the value of listed companies on the BSE closed just shy of the Rs 100 trillion-mark. A sharp 35% rally in benchmark indices coupled with new paper issuances have helped India cement its position in the league table of top stock markets worldwide. India's market cap has soared Rs 29 trillion, or 42%---most in the world-- so far in 2014. The journey from Rs 50 trillion market cap to Rs 100 trillion took around seven years. "It has taken India and BSE 140 years to reach this milestone of Rs 100 lakh crores market capitalisation. However given India's potential, India should be able to achieve multiple times Rs 100 lakh crore market capit...

Mumbai: Telcos, supermarkets, and even companies that run electronic wallets (or other prepaid instruments) can open so-called payments banks in the country, with the Reserve Bank of India (RBI) releasing rules for such entities. The move is aimed at providing basic savings, deposit, payment, and remittance services to people who currently do not have a bank account, including millions of migrant workers. Fifty per cent of Indians don't have bank accounts. The central bank also released rules for small banks, which will provide loans to small businesses and marginal farmers. Draft guidelines for both were released on 17 July. While the final norms are similar to those suggested in the draft rules, the central bank has expanded the scope of the business for such entities and given them more leeway in the manner in which deposits raised by them are deployed. In the case of payments banks, entities ranging from telecom companies and prepaid payment instrument issuers (PPIs...

Mumbai: Monte Carlo Fashions Ltd (MCFL) has fixed price band of Rs.630-645 per equity share to raise around Rs.350 crore through an offer for sale by promoters group and private equity (PE) firm Samara Capital. The company is making an IPO of 54,33,016 equity shares of face value of Rs.10 each for cash at a price band of Rs.630 to Rs.645 per equity share through an offer for sale by selling shareholders. The offer constitutes 25% of the post offer paid-up equity share capital of the company. The issue opens on 3 December and closes on 5 December. Post IPO, the promoters will have up to 64% stake, public would be 25%, and Samara Capital would retain 11% stake in the company, Monte Carlo Fashion chairman Jawahar Lal Oswal told reporters. In June 2012, Samara Capital, a Mauritius-based India focused private equity firm, through its affiliate, KIL, acquired a stake in MCFL and currently holds 18.51% of the pre-offer capital of the company. The company is also considering particip...

China top market for FIIs in Asia, India second New Delhi: Foreign institutional investors (FIIs) warmed up to Asian equities in November as the region recorded net inflows of $5.3 billion, out of which India attracted $1.4 billion, says a report by HSBC. According to the global financial services firm, after two consecutive months of sell-offs, FIIs have warmed up to Asian equities and all markets have received positive flows in November. Among Asian economies, China regained the top position as the 'most loved' market, pushing India down to second position in the region, while Thailand was placed at the third spot, it said. Till 24 November, the region recorded net inflow of $5.3 billion and though all markets received positive flows, Taiwan and India received the major chunk of funds with inflows of $2.3 billion and $1.4 billion, respectively. So far this year, the total FII inflows to Asian equities stood at $38.7 billion. "We are overweight on Indonesia, C...

Mumbai: The Reserve Bank of India (RBI) on Tuesday clamped down on Indian firms raising funds overseas and routing them to India through certain types of structures. In a notification, RBI noted that some Indian firms access overseas markets for debt funds through overseas subsidiaries and associates and later route those funds back to their Indian operations. One of the ways this has been done is through investment in rupee bonds floated by the Indian company. Taking note of such instances, RBI clarified that Indian companies are not allowed to "issue any direct or indirect guarantee or create any contingent liability or offer any security in any form for such borrowings by their overseas holding/associate/subsidiary/group companies except for the purposes explicitly permitted in the relevant regulations." RBI further added that funds raised by an overseas subsidiary, associate or group company cannot be used in India unless it conforms to the general or specific p...

Sebi tightens P-note rule to curb black Moneycontrol Bureau With FII inflows through the participatory note (P-note) route hitting an 80-month high of Rs 2.65 lakh crore in October, Sebi has tightened rules relating to issuance of P-notes, also known as offshore derivative instruments. It is widely suspected P-notes are a conduit for bringing black money parked abroad, back into India. P-notes are offshore derivative instruments issued by Sebi-registered FIIs to overseas investors who do want to register with Sebi for reasons legitimate or devious. The registered FII buys shares/derivatives on behalf of the unregistered players, and issues P-notes (a receipt of sorts) since the ownership of those shares/derivatives cannot be transferred to the unregistered players Under the new rules, a Sebi-registered foreign portfolio investor (FPI) can now issue P-notes only to those entities based in countries where the securities regulator and central bank are members of globally reco...

                                                                                   Scheme Valid only for AMC Empolyee / Relatives       Form Download Call Back Series Send Whatsup – 98916445052           -- SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offeri...

All NRI investments in mutual funds are considered under T15 Two years ago, mutual fund (MF) houses started to incentivize distributors from smaller towns with extra commissions to attract more inflows. The idea was to promote MFs in non-metro areas as well, and that MFs, as an investment vehicle, should not just be available in large towns or to urban dwellers. Therefore, based on inflows, cities are classified into two categories—top-15 (T15) and beyond the top 15 (B15). But if the investor is a non-resident Indian (NRI), she is automatically considered a T15 investor, even if her address falls in a B15 area. WHAT'S THE LOGIC? To understand why an NRI's investment is meant to be location-agnostic when it comes to remunerating her distributor, we need to understand the purpose of a B15 commission. MFs as an investment instrument have not spread much. Around 80% of total MF inflows across India have come from the large metros such as Mumbai, Delhi, Ahmedabad and Banga...

Mumbai: Foreign portfolio managers have pumped in almost $40 billion in Indian stocks and debt this year on expectations that economic growth will quicken and interest rates will be cut as lower oil prices cool inflation, making India the most attractive destination among emerging markets and in Asia excluding Japan. Net foreign portfolio investments into debt and equities reached $39.38 billion, according to the latest official data available on Friday. National Securities Depository Ltd releases data with a one-day lag. The last time India saw such strong inflows was in 2010 when net investments had added up to $39.38 billion for the full year. Foreign portfolio inflows into India are the second highest in the Asian region after Japan. China does not release exact data of foreign inflows. "The entire environment has shifted towards improved policy environment, better decision-making, improving growth and declining inflation. The mix of growth inflation is getting better,...