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: Indias 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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