Posts Tagged ‘repurchase’

Weekly Update 13th – 17th September 2010

The Indian markets saw good gains in the week gone by, as foreign investors continued to put money in search of growth which is lukewarm in major part of the world. According to the latest FED beige book finding, the U.S. economy has shown “widespread signs of a deceleration” in mid-July through the end of August. The Beige Book showed that within manufacturing, weakness was largely related to construction while strength was in auto-related production, including production of steel indicating that the FOMC may consider stimulus package in the September meeting.

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Deficit concerns pertaining to European countries also waned when Portugal managed to clock bids for 2.6 times the amount offered for sale of bonds due in 2021 compared to 1.6 times in the March sale. The better response to the bond sale gave relief to the investors over the health of European nations. Chinese government would continue to take measures in order to curb down speculation in property market and U.S. may call for protection against China imports are some of the concerns that are playing out in the market. Agovernment report showed that the manufacturers in Japan were optimistic for the fifth consecutive quarter. Japanese government is expected to revise up its estimate for the second quarter economic expansion as the companied have cut spending at the slowest pace since 2007.

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Going ahead, market will keep an eye on the RBI move in its monetary review due next week. There is a chance that RBI may leave policy rate unchanged for a while or tinker with Repurchase (Repo) rate by hiking it by 25 basis points. The expectations of good growth especially in the industrials have been built as the companies are now more confident about their expansion plans. The expected uplift in the manufacturing in the third quarter is likely to provide the gains in materials like cement and steel companies in terms of better realization of the products.

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Despite mixed cues from the global indices, Indian markets traded with the positive bias throughout the week. It almost tested the upper trend of the weekly channel so one should be careful for the week ahead and wait for the sustainability above that zone for confirmation of breakout before initiating fresh investment. Nifty has support between 5540-5475 and Sensex between 18300- 18000 levels.

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It was a truncated week for Indian market. Upside in bullions dazzled the eye of investors. Gold is trading near the mark of all time high as investors increased their long position in gold futures on safe haven buying. Mighty commodity crude, lost its shine on end of driving season in US amid comfortable stocks. Increasing short position in gasoline is adding further pressure on prices. Crude may trade in a range of $71-$76 dollar per barrel. Investors should keep a tight vigil on the data of US Michigan Confidence, advance retail sales etc, which is likely to provide further direction in commodities. As regards agro commodities it should be a good week for oil seeds and edible oil complex where investors may see some lower level buying. However, ample of stocks may cap the upside.

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Rights Given to MF holders By SEBI :)

MF-Investor-Rights

The recent move by SEBI, banning entry load and capping exit load, among other things, has turned the spotlight on the possible improvement in rights of mutual fund (MF) holders in the country.

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Sure, we already have regulations in place. But the recent Sebi move points to improvement in investor rights.

The important rights that are available to MF holders are as below as per Sebi Regulations on MFs:

A) An investor is entitled to receive statements of accounts in 6 weeks from the date of request for unit certificates.

Every unit holder has the right to receive a copy of the annual statement and periodic statement regarding his transactions.

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B) He also has a right to receive information about investment policies, objectives, financial position and general affairs of the scheme.

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C) Trustees are bound disclose to unit holders any information that could adversely impact investments. Investors have the right to information regarding any adverse happening.

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D) With prior Sebi approval, AMC can be terminate by 75% of the unit holders of the scheme present and voting at a special meeting.

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E) He is eligible to receive dividend within 42 days of declaration, and the proceeds within 10 days from the date of redemption or repurchase.

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F) They can also pass a resolution to wind-up the scheme.

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G) An investor can also send complaints to Sebi, who will take up= the matter with the concerned MFs and follow them up till the issue is solved.

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H) With the consent of 75% of the unit holders they have the right to approve any changes in the close ended scheme.

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However in present world, usually no fund house takes an investor for granted, as nobody wants bad publicity.

Also, fund houses know that the Sebi is extremely serious about investor protection.

Still there is scope for more improvement.

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When it comes to quantitative rights like receiving dividend or redemption cheque on time, things are very much in place.

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However, when it comes to transparency or frequency of portfolio disclosure, things can still improve.

Transparency is a big issue in mutual fund industry.

Still there are schemes in market with strange and funny names, or the repackaged schemes where the investment objective and investment portfolio are not close to each other etc;
These can confuse investors.

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Another area which could improve is frequency of portfolio disclosure. Many Fund houses are lacking in the disclosure of portfolio twice a year, a choice given to them.

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So moral of the story is that before investing everybody should take necessary action to familiar with the scheme and at the same time should be aware of their rights and obligations.

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