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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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