Archive for November 11th, 2009

Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

Dividend Payout not the Best Criteria to Judge MFs Schemes

 

Mutual fund schemes generally boast about high dividends but mutual fund experts say picking a mutual fund scheme on the basis of its dividend payout may not be the best way to invest in the sector.

As per MF experts, comparing the quantum of dividends paid in short term is not the correct way to measure a fund’s performance.

The proportion of dividend depends on a number of factors, including the frequency of payouts over a certain period of time.

There are funds that have higher net asset value (NAVs) but lower dividends, while others have lower NAVs, higher dividends.

Moreover, many analysts believes that the consistency of dividend payout is important than the quantum of dividend.

Experts always insist investors to not to base their investment decision on the percentage of dividend paid in a short period.

Rather Investors should look for the track record of the fund in this regard over a longer period of time.

After the recent equity market bull-run, many equity funds have declared dividends up to 70 per cent.

So far in October, over a dozen of equity schemes have declared dividends.

Experts are of view that the quantum of dividend paid does not directly indicate the performance of the fund, especially in the short term.

Unlike equities, if a mutual fund scheme pays certain percentage of dividend, NAV of the scheme drops by the same proportion.
If investors go for dividend plans, they most probably miss the compounding opportunities over the long-term for short-term gains.

An Equity head of a mutual fund said “unlike debt funds, where the intention of an investor is to earn dividends on a regular basis, investors in equity funds,  do not always look for dividend”.

At times, the focus is more on capital appreciation.

Even Fund Managers of reputed firms have maintained quite often that they pay dividends every year irrespective of the market conditions and consistency have always been theirs primary concern not the quantum of dividend.

Record Fund Raising by India Inc,through QIPs, is on the Cards.

 

Record Fund Raising by India Inc,through QIPs, is on the Cards

Record Fund Raising by India Inc,through QIPs, is on the Cards

 

 

Indian companies are all set to  raise record fund through share sales to institutional investors in the next few months as they attempt to reduce debt accumulated during their takeovers.

Hindalco, Aban Offshore and Tech Mahindra, which bought the scandal-hit Satyam Computer, will lead this record fund raising by India Inc.

Indian companies have approvals from shareholders to raise as much as Rs 68,000 crore by selling shares to institutional investors under the so-called qualified institutional placement route.

This is in addition to around Rs 26,000 cr that has been raised by companies such as real estate developer Unitech and Suzlon Energy in the last six months, thanks to the signs of economic revival and  record stocks rally.

India Inc raised as much as Rs 26,430 cr in the last thirty-six QIP issues since March this year, according to the analysis.

These companies which raised funds in the last six months still have room to raise another Rs 23,000 cr based on the approvals shareholders have given them.

There are several companies which have received approval for QIPs between June and October with a potential to raise as much as Rs 44,000 crore, but are yet to hit the market.

Hindalco, which is saddled with debt after it acquired Canada’s Novellis, plans to raise Rs 2,900 crore and Tech Mahindra plans to raise to partly repay the loan it took to buy Satyam Computer.

Essar Oil which is negotiating to buy Shell’s refineries in the UK plans to raise around Rs 9,000 cr, whereas JSW Steel has a mandate raise Rs 4,853 cr.

Shareholders’ approval is valid for a year and most of these companies took approval after June this year.

“The issues that have come till now got strong interest from institutional investors, and predominantly from foreign buyers who bought over 90% of the QIP issues.  Given the current market conditions and the kind of interest that Investors displayed in the Indian growth story, the proposed issues should be subscribed successfully,” said Jagannadham Thunuguntla, equity head, SMC Capitals.

The fund raising gets bigger when one takes into account the potential IPOs and government share sales which may run into billions of dollars more.

🙂

 

Vegetable Prices to Ease by January : Planning Commission

Hello Friends here we come up with the Latest Major Agri-Commodities updates from various parts of the country.

Vegetable Prices to Ease by January : Planning Commission

Vegetable Prices to Ease by January : Planning Commission

Planning Commission Deputy Chairperson Montek Singh Ahluwalia Sunday said he expected vegetable prices to ease by January.

“At the end of a bad monsoon, the big pressure is on vegetables.

The annual inflation rate for food articles was sharply higher at 13.39 percent for the week under review.

Similarly, the annual rise in the index for pulses was 23.44 percent and that for cereals was 11.15 percent.

He also said that “By December-January, you will see at least something (fall in prices) for vegetables, there will be a different position,” Ahluwalia added.

“It (vegetable) is not something you can import, but in general, certainly in management of public distribution system, we are in a strong position as far as stocks are concerned,” he contended.

“There is more than enough food stock in the country. We do not have to worry on that score.”

The Reserve Bank of India and the government have both warned that India’s annual rate of inflation based on wholesale price index for all commodities would rise to 6-6.5 percent by March, while the Prime Minister’s Economic Advisory Council has pegged it at 6 percent.

🙂

In Other major Commodities Updates we can see that NMCE has kick started trading in gold guinea contract. 🙂

NMCE kicks starts trading in gold guinea contract:

National Multi Commodity Exchange of India (NMCE), the first commodity exchange of the country, has started trading in gold guinea contract to reach to the masses.

The commex has tied-up with Muthoot Group to set up multiple delivery centres.

The guinea would be a Muthoot branded BIS certified serially numbered,available in a tamper proof packing.

The purchase/delivery of the gold guinea will be made available through the Muthoot Finance’s 22 centers across the country, which include Ahmedabad, Kolkata, Jaipur, Mumbai, Indore, Delhi, Rajkot, Kanpur, Lucknow in the North and Trivandrum, Kollam, Kottayam, Calicut, Chennai, Coimbatore, Madurai, Truichi, Bangalore, Mangalore, Hyderabad, Trichur.

🙂

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