Market plays havoc with mutual fund NAVs’
Mumbai : The slump in the stock markets has seen the mutual fund industry creak under a nearly Rs 2,100-crore decline in net assets under management as of February 28.

Despite the fall in the asset under management, almost all the funds saw a net inflow in the month of February.

While the UTI saw a net inflow of Rs 54 crore during the month, bank-sponsored funds saw marginal net inflows of Rs 3 crore and private sector Indian funds witnessed net inflows of Rs 684 crore in the same month.

The industry as a whole saw net inflows of Rs 1,871 crore even as assets under management shrank. Income funds posted a net inflow of Rs 633 crore while growth funds recorded a net outflow of Rs 45 crore.
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Calcutta Stock exchange enforces HDFC guarantee
New Delhi : Deepak Parekh, chairman of HDFC Bank, confirmed reports that the Calcutta Stock Exchange had asked HDFC Bank to pay Rs 2 crore out of a total default by brokers of Rs 40 crore as part of its bank guarantee issued to the exchange.

The chairman however, reiterated that the amount was paid out of the reserves that bank had transferred to meet contingencies as per its prudent management policy.

Mr. Parekh said the bank transferred a part of its profits every month to provide for contingencies as part of a prudent management policy and this amount has reached a figure of Rs. 15 crore.

Mr. Parekh also said that the Rs 2 crore were not lost since the bank lent against securities, the broker's stock exchange membership card and a 30 per cent cash margin.

He also said a slowdown in the US economy could create opportunities for Indian IT companies as firms looked for cheaper outsourcing options.
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Zurich AMC to launch two open-ended equity schemes
Mumbai: According to Mr. SV Prasad, chief executive of Zurich Asset Management Company, the fund is launching two new open-ended schemes: Zurich India Leadership Fund and Zurich India Infotainment Fund.

The fund is said to have filed a document with the Securities Exchange and Board of India (Sebi) to that effect.

Zurich India Leadership Fund scheme would make investments in companies which are market leaders in their respective categories while Zurich India Infotainment Fund scheme would invest in companies having high growth areas of information technology, entertainment and related sectors.
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Market slump takes its toll on US-64 scheme
Mumbai: India’s biggest mutual fund, the Unit Trust of India, has seen its flagship scheme, the US-64, lose about Rs. 840 crore in the current stock market meltdown. This is on the basis of a nearly 35 per cent drop in the market capitalisation (M-cap) of new economy sector post-Budget.

This has happened since approximately 10-12 per cent of the estimated scheme corpus of Rs 20,000 crore is invested in the ICE sector alone, a sector which has seen the biggest downturn in the stock market.

To add to its problems, owing to the market debacle, the repurchase price seems much higher than its NAV, which, though not published, is expected to be around Rs. 14-15.

The US-64 still continues to have an overwhelming exposure in equities. It may be recalled that a high level of equity exposure was responsible for the US-64 crisis in 1998.

Subsequently, the Deepak Parekh committee had recommended that the scheme should scale down the equity exposure to moderate levels and that UTI should align its NAV with its sale and repurchase prices like any other scheme within three years.
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Politics takes its toll on the sensex
Mumbai: The bear phase, combined with the political problems in the country, resulted in the Bombay Stock Exchange sensex closing sharply lower on its last trading day for the week.

The only good thing that happened to the market was consistent buying from foreign institutional investors (FIIs). The market reacted sharply to fears of political instability after the Telugu Desam Party (TDP) also demanded a thorough probe into the defence deals which was exposed by Tehelka.com.

After opening weak at 3752.36, the sensex rallied during the day to finally cloae at 3,745.74. At the National Stock Exchange, the S&P CNX Nifty was down by 23.60 points to close at 1,193.55.

Dealers said, FIIs were persistent net buyers in the new economy stocks from technology, media and telecom (TMT) sectors besides select old economy counters like MTNL, ACC and some others. Domestic financial institutions also extended support by making selective purchases in small lots. However, the volume of business showed a noticeable improvement having increased to Rs 1,985 crore on Friday against Thursday's turnover of Rs 1,712 crore.
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