Posts Tagged ‘debt market’

Foreign Investors Poured $9 Billion in Indian Stock Market :)

Foreign_Investment


Foreign investors have poured Rs 43,837 crore (USD 9.05 billion) into the country’s stock markets so far this year, reflecting confidence of foreign funds in the Indian equity markets.

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At the close on Wednesday, overseas investors were gross buyer of shares worth 4,17,121 crore and gross sellers of stocks valued at Rs 3,73,283 crore, resulting in a net flow of Rs 43,837 crore into the stock markets so far this year.

This latest data has been announced by the market regulator Securities and Exchange Board of India (SEBI).

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Significantly, the Bombay Stock Exchange benchmark Sensex has gained nearly 73 per cent so far this year.

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The National Stock Exchange barometer Nifty – composed of 50 shares — has also advanced fairly and for the first time in more than a year it touched 5,000 level on Thursday.

(Read more about that on previous blog).

Global fund houses have made a total net investment of Rs 3,564 crore so far in September, according to the SEBI data.

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After pulling out a huge sum of Rs 52,986 crore (USD 11.9 billion) from the local stock markets, foreign investors are now moving their money towards emerging economies like India.

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However in debt market segment, overseas investors have not turned net investor so far this year.

FIIs were net sellers of debt instruments worth Rs 527 crore (USD 49 million) in 2009 so far according to the latest data received from the market regulatory body,SEBI.

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ULIPs Lock-In Period Raised from 3 to 5 Years !

Lock-in-period

Insurance regulator IRDA stated that it would raise the lock-in period from 3 to 5 years, in a bid to check mis-selling of Unit Linked Insurance Policies (ULIPs) where ULIPs are investment cum insurance products, which invest in equity and debt market depending on the choice of the policyholders.

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However, the circular in this matter is expected to be issued in the next 10 days while the new norm would be applicable to all the ULIPs filed on or after October 1.

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Moreover, at present, the minimum tenure for ULIPs is 5 years while partial withdrawal is allowed after 3 years.

A longer lock in period for ULIPs, one of the hottest investment products, is meant to promote long term investments.

The move would reduce early lapsation and would benefit the companies since administrative and marketing cost will be recovered.

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But insurers apprehend that retail investors could divert their money into mutual funds.

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In addition, last month, the regulator had directed all life insurance companies not to impose surrender charge for policies surrendered from the fifth policy year.

A few weeks back, IRDA had put a cap on charges for Ulip plans.



SEBI releases guidelines for interest rate futures :)

Interest Rate Futures

Market regulator SEBI on Friday issued guidelines for trading in interest rate futures under which the 10-year government securities can be traded on bourses, a development that will deepen the debt market.

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As per the guidelines, the contract size for futures trading would be Rs 2 lakh with a maximum maturity period of 12 months.

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The contract cycle, it added, would consist of four fixed quarterly contracts expiring in March, June, September and December.

The notional coupon rate for such trade, the guidelines said, would be 7 per cent to be compounded every six months.

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Welcoming the move SMC Capitals Equity Head Jagannadham Thunuguntla said, “It is a right step by SEBI. This will activate the debt market in the country.”

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The guidelines further said stock exchanges will have to seek approval of the SEBI before starting trading in interest rate futures in their currency derivative segment.

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The clearing system for the interest rate futures, it added, would be the same as for the currency derivatives segment.

The exchanges will also be required to disclose upfront the composition of the basket of deliverable grade securities and the associated conversion factors for each of the quarterly contract.

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