After getting the go-ahead from the Reserve Bank of India (RBI), IDBI Bank is all set to apply to the Securities and Exchange Board of India (Sebi) for a mutual fund licence.
According to sources, the market regulator is planning to introduce colour forms for client registration in a bid to stop brokers from making changes after a client has filled up the form. Currently, there are boxes each for cash derivatives and debt, and investors have to indicate whether they want to trade in the cash market or futures and options. In some cases, brokers themselves click on the derivatives option without the permission of the client.
At least 14 mutual fund schemes have closed down, according to announcements made by fund houses. The reason: they had less than 20 investors in the scheme or a single investor was accounting for more than 25 per cent of the corpus. According to Sebi's guidelines, any scheme should have at least 20 investors. Also, no investor can account for over 25 per cent of the corpus.
Top Satyam executives accelerated sales of their shares in the company in close to three months before the company's aborted December 16 bid to buy two developers controlled by Ramalinga Raju's family.
Foreign pension funds are making a beeline for India despite the turmoil in global markets.
The Securities and Exchange Board of India, after receiving comments from various parties, said QIPs should be based on the average price of the shares two weeks prior to the issue.
Distressed by the falling spree of Indian equities, fund managers are looking at various avenues of diversification. At a time when emerging markets, including India, are vulnerable to global cues and are more coupled, frontier markets showless or almost no correlation. Franklin Templeton was the first to spot an opportunity and has already filed for a MENA fund (Middle East North Africa Fund), which will invest in some of the frontier markets.
Uncertainty in equity markets and a waning investor response have led to a slowdown in new demat accounts, a key gauge of retail investors' sentiment towards the market. Sluggishness in the primary market has added to the woes as a large number of investors generally tap equity markets through IPOs.
The Securities and Exchange Board of India is likely to clear the long pending application of Taurus Parsoli Ethical Fund to launch a Shariah fund by the end of this month. A go-ahead to Taurus would pave the way for other mutual fund houses to launch similar funds.
A depreciating dollar and the uncertainty in the equity markets globally are adding to the sheen of the yellow metal. With gold prices surging 20 per cent in the last two months, Gold ETFs are back in focus.
Foreign investors sold $2.8 bn stocks in the past quarter alone. FIIs trimmed their holding in the BSE 500 companies by nearly two percentage points to 17.8 per cent, bringing it back to June 2005 levels, according to a Citigroup report. FIIs pulled out shares worth $2.8 billion over the past quarter.
Industry observers said that direct investment has increased from 2 per cent to 6-7 per cent, which is a marginal rise of 5 percentage points. Many investors still prefer to invest through distributors in spite of a 2.25 per cent entry load. Inconveniences in the online process and asset management companies' (AMC) offices have kept investors from taking the direct option.
In fact, the current market scenario provides more value investment opportunities. So, it is positive for mutual funds.
Experts see company-specific transactions rather than sector-specific ones in the private equity dealings. More transactions & buyouts will result in PE firms acquiring controlling stakes in firms in 08. The PE activity will be tougher this year as it will be company-driven rather than sector-driven investing. Real estate will continue to be a focus sector followed by infrastructure. Analysts say that PE players bring a lot of value to a firm that is planning to go public.
JPMorgan Chase is planning to invest $100-150 mn a year in India. This fund will be looking at a range of sectors and would not be focused on one particular sector. It can bring in sector expertise, investment banking expertise and the other broader resources of a full-service financial institution. The new fund, Private Capital Asia, will take non-controlling stakes in mid-cap companies, exclusively in Asia. JPMorgan regards India as a supportive market for private equity.
A majority of brokerages expect the bellwether Sensex to hover at 19,000 by the end of this calendar year, according to a poll conducted by Business Standard among top local brokerage houses. The figure is significantly lower than last December when most brokerages had expected a 15 to 20 per cent return from 20,000 levels at the end of 2007. The Sensex has dropped over 25 per cent from its January peak of 20,800.
Dollar fell below 100 yen for the first time in more than 12 years forcing investors to shift money out of dollar assets. Current estimates of money in asset-tracking commodities are about $110-130 billion globally and this is expected to grow by about 30 per cent over the next year.
Equity stake, flexible terms attract talent from Wall Street firms to local peers.
According to data from AMFI (Association of Mutual Funds in India), Rs 12,079 crore (Rs 120.79 billion) came into the new schemes in January alone. In December 2007, inflows were to the tune of Rs 10,273 crore (Rs 102.73 billion).
Most investors have become wary of placing fresh bets after the benchmark Bombay Stock Exchange's Sensex lost more than 3924.19 points, or 19 per cent, this year. The Sensex meltdown has also impacted the number of investments in the growth mode because earnings growth in several sectors has been affected indicating a cooling off effect on the economy.
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