Mutual funds to invest in derivatives segment
Mumbai: The Securities and Exchange Board of India (Sebi) is considering to allow mutual funds to invest in derivatives segment along with the Foreign Institutional Investors (FIIs).

According to Sebi chairman DR Mehta, the Sebi move is intended to give greater depth to the derivatives market which is in its infancy. "The entry of big institutional investors like MFs and FIIs will help widen and deepen the derivatives market, he said.

Mr Mehta was addressing representatives and members of the mutual funds here at the annual general meeting (AGM) of Association of Mutual Fund Industry (AMFI).

Speaking on the occasion, Mr Mehta said it would be better if all MFs operating in the industry here record their major important investment decisions. "This suggestion is not aimed at making the record keeping mandatory, but to bring uniformity and transparency in the industry" he said.

He said Sebi is also planning to make AMFI certification programme mandatory for the new agents who distribute mutual fund and debt market products.
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RBI hikes FII investment cap
Mumbai: The Reserve Bank of India (RBI) on Thursday formally announced the hike in the investment limits for foreign institutional investors (FIIs) which, it said, can go beyond 24 per cent to a maximum sectoral cap/statutory ceiling as applicable.

This hike in FII investments in companies will, however, need to have the approval of the Indian companys board of directors and its shareholders.

The RBIs move followed the finance ministers assurance to the FIIs on Wednesday that the government will raise the cap on FII investment in Indian companies.
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US Stocks drop sharply
New York: US Stocks fell sharply on Thursday on fears of severe economic repercussions following last week's terrorist attacks. The Dow Jones industrial average fell by more than 380 points, bringing its loss so far this week to more than 1,200 points.

Wall Street's losses widened as Federal Reserve Chairman Alan Greenspan acknowledged that the attacks produced a significant drop in economic activity.

But the Fed chairman also said, "I am confident that we will recover and prosper as we have in the past."

The selling was expected after a turbulent session on Wednesday, when the Dow Jones industrial average fell more than 400 points but recovered to a loss of 144.

But the market's anxiety increased on Thursday as Greenspan told Congress the attacks had disrupted the business activity in a number of ways, including a drop in consumer spending and travel and the stockmarket's four-day shutdown last week.
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