FM says market correction was worldwide
New Delhi: Finance minister P. Chidambaram has termed the 1000-point slide in the domestic stock market over the last few days as a "market correction", in line with a global downward trend in commodity prices and a US decision to raise treasury bond rates.

"I will put it as a correction provoked by reasons which are quite understandable. All metal prices are down and there is some impact of cement prices ... along with the increase in the US Fed rate. All markets are doing the same," he told reporters here.

The worldwide fall in metal prices was triggered off yesterday after traders began to exit the market amidst fears of over-heating. The sell of was almost in tandem with the US Federal Reserve raising its benchmark federal fund rate by a quarter per cent to 5 per cent, and dropping broad hints that it may repeat this hike next month.
The Fed rate hike has triggered a pull back by foreign funds from developing markets like India for redeployment in the now lucrative Fed bonds. According to provisional figures from Sebi, FIIs took out some Rs1,200 crore, on Thursday and Friday. According to NSE figures, foreign funds took out Rs800 crore on Monday.

Meanwhile, finance ministry officials denied that they had issued any instructions to domestic institutions to buy shares or prop up the market. The denial came with the recovery of the Sensex after a heavy initial fall on Tuesday morning. The recovery was effected after state run domestic financial institutions did some bargain hunting in blue chip shares, currently trading at their lows.
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Sebi proposes higher F&O fees for brokers
Mumbai: The Securities and Exchange Board of India (Sebi) on Tuesday proposed higher turnover fees for brokers in the cash and derivatives segments. Sebi said that it has made its proposal taking into consideration recommendations of the Anjaria Committee that was appointed to look into the matter of turnover fees.

The regulator has sought public comments on its proposal.

As per Sebi's recommendation, new brokers in the cash segment will have to pay a fee of 20 rupees per 10 million rupees of turnover. This, interestingly, is one-fifth of what the Anjaria Committee has recommended. For existing and new brokers in the derivatives segment, Sebi has proposed a turnover fee of 20 rupees per 10 million rupees, twice that is currently charged.

The Anjaria Committee has recommended increasing the fee to 50 rupees per 10 million rupees of turnover in a phased manner.
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Stock-in-trade/shares as investment: CBDT mulls supplementary instructions
New Delhi: The Central Board of Direct Taxes (CBDT) plans to issue supplementary instructions to its assessing officers to provide further guidelines for determining whether a person is a trader in stocks or an investor in stocks.

The Finance Ministry has now invited comments of all stakeholders on the draft instructions.

The CBDT had, in August 1989, laid down certain tests to distinguish between shares held as stock-in-trade and shares held as investment.
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UTI Mutual to launch Wealth Builder fund
Kolkata: UTI Mutual Fund will launch a close-ended equity fund, benchmarked against the BSE Sensex, with a maturity period of five years. The new fund, UTI Wealth Builder, will automatically convert into an open-ended scheme on maturity.

The fund will aim at long-term capital appreciation by investing chiefly in a diversified portfolio of stocks. It will provide redemption and switch out facilities on an ongoing basis at six-monthly intervals at prices based on the relevant net asset value.

Under normal circumstances, at least 65 per cent of the fund's assets will be invested in equity and equity-related instruments. This may be scaled up to even 100 per cent if circumstances so warrant. The fund manager may use derivatives to hedge the portfolio, the offer document says.
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Parsvanath IPO likely to hit the market on May 29
New Delhi: The Rs1600-crore initial public offering of Parsvanath Developers is likely to hit the capital market on May 29. The 3.3-crore shares on offer are likely to be priced at Rs480 apiece with a face value of Rs10.

This will be the first real estate issue, where foreign institutional investors will be able to invest after rules governing FII investment in real estate was changed recently. JP Morgan Stanley, DSP Merrill Lynch, Enam Financial Consultants are the book running lead managers for the issue. The company had filed the draft red herring prospectus with the Sebi last month.

Parsvanath plans to use the proceeds for its real estate projects in various parts of the country.
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