Stocks
Equity MFs suffer further bleeding of Rs2,869 crore in October

The relentless outflow of funds from equity mutual fund schemes continued in October; fund companies hope that investors looking to book profits would be flushed out by now.

It seems that the steady bleeding experienced by equity mutual funds is showing no signs of abating. The month of October has witnessed further outflow of Rs2,869 crore from the corpus of equity funds, according to data released by industry body Association of Mutual Funds in India (AMFI). This takes the total redemption over the past ten months to a whopping Rs17,000 crore.

The sales of new equity schemes stood at a paltry Rs106 crore (Baroda Pioneer PSU Equity Fund and Reliance Arbitrage Advantage Fund were launched) while sales of existing equity schemes was Rs4,914 crore in October. But last month, redemptions from existing equity schemes stood at Rs8,413 crore meaning that equity mutual funds suffered Rs2,900 crore of net outflow in October 2010. In September investors pulled out more than Rs7,000 crore from equity schemes.

Liquid funds have seen a healthy net inflow of Rs2,283 crore due to the improved liquidity situation while gilt funds recorded Rs117 crore net inflows in October. As on October 2010, the assets under management (AUM) of the industry stood at Rs6.46 lakh crore.
Most fund companies and distributors consider that equity outflows are a natural consequence of the phenomenal rally in stock markets after a major crash in 2008. They argue that investors who had invested at high valuations during 2008 were looking for the exit route now that the market has regained previous levels.
However, these companies are now hoping that investors would now stop making a beeline for the exit door as most of them would have been flushed out by now. However, only time will tell whether this, in fact, turns out to be true. 
Ever since the Securities and Exchange Board of India (SEBI) banned the entry load for mutual fund schemes in August 2009, fund companies have been suffering a steady haemorrhage of cash from their equity schemes. Over the last 12 months, funds have recorded positive inflows only in two months, despite the fact that the Sensex was up 22% over this period and has almost touched an all-time high.

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COMMENTS

madx

7 years ago

Does anybody has any hope from new AMFI boss since he is coming from UTI, which AMC has done a lot for IFA when this naked dance 'nunga naach' started by SEBI to pass the exam, which they themselves wound up to have another exam now. One motherfucker started something called MAPIN and the other one MIN.

How these bastards would continue to play with screw IFA community.

Please forgive me for my language and being offensive.

First we need to handle AMFI. Why on the earth they have increased renewal fee and reduced renewal period of ARN? I understand SEBI has no role in it.

AMFI is mother of all sins plaguing MF industry in general and IFA in particular. With U K Sinha at helm at AMFI, we may take a chance to first make a representation/demonstration giving memorandum with copies to print and electronic media. Wherein all the wrongdoing and undoing should be chronologically mentioned.

Political support would not help. Media attention may help. Even on date media (ET) is misguiding regulators on churning forced IFA on investors. On one hand they take investor to be such innocent and on the other they are smart enough for direct investment, online investment, using brokers, using demat account blah blah.

Some reporter friends of some IFA may be useful to come out with stories of difficulties faced by IFA and counting high handedness of SEBI & AMFI.

This should also form integral part of meetings/conferences called by respective AMC especially to launch NFO. At some point of time IT MAY BE NECESSARY TO BOYCOTT SOME OF the NFO.

For example we may start with NFO of Sundaram & ICICI which are in the offing.

After all these AMC have been keeping mum as not a single statement came from any AMC, while AMFI and SEBI continue strangulating IFA.

LET US BOYCOTT NFO OF ICICI MF
and let it be known to the whole world. This may give us more publicity than gherao of SEBI & AMFI.

We should create unpleasant situation in front of AMC management who only want money mobilised and turn a blind eye when it comes to look after us.

Roopsingh

7 years ago

Dear IFA friends,
my suggestion is we can make a united opposition front against SEBI and its brokers -we can include investors who are burned and suffering due to cheatings by their exchange brokers and their cases have not been looked up by SEBI-we can welcome all of them to join our protest-this will result in media attention because there are huge no of people who want to show their anger against their brokers-
Pl make your comments regarding my suggestions-
and i also think we should welcome support from any of political parties irrespective of their ideology who ever wants to come forward in supporting our legitimate demands-we cannot afford to be untouchables to shiv sena or any sena-because we are very few in nos-
once our protest gets movement we can make a joint force-i am sure we need to get support from any of ideologies at present stage-
once GOVT of india and FM takes note of this-some positive changes will take place.

Roopsingh

7 years ago

Dear Madhusudanji-
as per my telephonic talk to u-i would like to put my thoughts here which we shared mutually-
i am fully supportive to idea of GHERAO of SEBI and AMFI peacefully and in gandhian way-this will surely invite a serious media attention..
everyone knows well about injustice being carried to IFAs-but the most sad part is of AMCs mouth shut during all these years for unknown reasons-
i am sure if few hundread IFAs will gather and make peaceful protest march in streets around SEBI and AMFI-this will create a big impact-
i will surely like to join any such protest if IFAs from Mumbai take part actively-because i doubt many IFAs outside mumbai would not appear due to different reasons-but if few hundread IFAs make a protest-it is going to start a big movement in all other cities-they can boycott MF business for few days in support of this protest-
I guess most of IFAs will support me and Madhusudanji.
pl let us know through emails about your thoughts.
I would urge all IFAs that please take active part to save ourselves because we have nothing to loose any more now-the only way is now towards victory over injustice.

Madhusudan Thakkar

7 years ago

The latest move of KYC norms irrespective of size of investments has opened eyes of sites of "paid media" like Valueresearch ,it has also termed this move as "unfriendly".Mainline paid media has also reported that there are major outflows from ELSS schemes also.
This is a conspiracy against "small investors" which everybody should understand.SEBI along with "paid media"has turned blind eye against "retail participation" and has been lying blatantly and willfully
The unbashed discredit attempt and biting has begun in full speed due to latest action against small investors also.
Many of our friends have suggested to take help from political parties.Here I would like to mention that political parties have unions on Banks and LIC.If RBI would have taken any action like this they would have come .to streets. To take help of these parties will not serve any purpose[on the contrary, they will demand "ban" on mutual funds and will say that small investors should stay away from this "risky" product and instead invest in Banks and LIC where they have employees union].
Some of my friends have also suggested that "enough is enough" and we should contact Bal Thackeray,Udhav Thackereay,Raj Thackeray,and Nilesh Rane of Swabhiman[people outside Mumbai may not have heard about Nilesh.For their information Nilesh Rane is son of former CM Narayan Rane who will sworn as a minister in Maharashtra govt. shortly.He led one of the most successful protests on "water issue" in Mumbai.How BMC headquarters was gheroed by his supporters and issue was resolved to certain extent.] Here the main problem is "Marathi Manoos".We all know how much these organisations are obsessed with "Marathi pride"[Ashmita].Bhave is also an Marathi and according to me they will on the contrary support Bhave's action and may also suggest that like jobs, there should be "reservations' in regulators job also some "Marathi" should be appointed as next SEBI chief.So this is also out of place.
What is the option before us?"Paid Media" will also not support us.Hence we should "peacefully" demonstrate outside SEBI headquarters or AMFI office.The most "effective" will be to demonstrate outside CAMS office in mumbai because it is situated near BSE building .
We should ensure that protest should be "peaceful" like MNS,Shivsena & Nilesh Rane style.
Our concerns will thus be highlighted by "electronic media" also.
We should not keep quiet .Mutual fund industry is striving for survival and it is duty of everyone[including AMCs] to rise on the occasion.
Madhusudan Thakkar

madx

7 years ago

It is falling like nine pins but industry association AMFI has not taken a single step in positive direction.

See the reaction of IRDA in support of insurance industry. AMFI need to learn a lesson.

All talk to taking MF to remote areas for financial inclusion are looking farce.

First nail in the coffin was laid when it was made mandatory to have PAN even for investing Rs.500/-. Is that kind money may lead to money laundering, the pretext on which it was done.

We have encouraged many children to invest their pocket money or gift amount, which now not possible for want of PAN.

Then came direct channel with ZERO commission and then final nail in the coffin was abolition of upfront. I do not know how many of distributors are asking for and getting separate cheque. To us it looks like begging for Rs.5/ or Rs.20/-. There are definite expenses in procuring new businesses, which can not covered by upfront paid by fund houses, where it range from 0.20% to 0.75%. With these conditions any new business below Rs.20,000/- result into negative cash flow.

Now consider this, we mobilised 36 months SIP for ICICI MF of Rs.2000/- pm. They are paying Rs.4.56 every month, a paltry 0.25%. It will take one year for my money (only bus fare) spent to get application collected from investor and deposited with fund house.

TDS of service tax is another farce. Why only MF are offering service not insurance. Insurance commission is cut TDS of income tax, which we get refund since we are not under purview of IT being small. But MF would not leave us, they will take their cut of 10.3% service tax. If they cut IT instead then there is a possibility of refund. But service tax is simply a drain from meagre commission amount.

MF need to pay enough incentive at least for bringing new customers if they at all think about financial inclusion. But industry is going in REVERSE gear by offering demat facility and sale purchase through broker thus converting long term investment product to TRADING PRODUCT.

Stock Brokers make lay investor to try their hand in F&O for fat brokerage and leave them at mercy of fate when gullible investor loose all their savings. Analyst on TV channel gives trading advice rather than investment advice.

A shake up is necessary at AMFI and SEBI for MF to survive and distributors needs to be respected for their effort, else slide which started in Aug 2009 is the beginning of THE END.

bhaskar

7 years ago

fool bureaucrats like bhave is challenged to sell a single scheme for in BACHELI,Distt. DANTEWADA.simply the people in small places are deprived of investing as it is the BAPAUTI of these fools who are said to be the regulators and live in air conditioned villas in big cities.comeon Mr. fool,you only say that 80% of indians live in villages and towns. these people are robbing,looting our hard earned money to satisfy there whims.

Roopsingh

7 years ago

Dear friends-AMCs KI NIYAT PAR MUJHA PURA SHAK HONE LAGA HAI-i doubt their intentions-future seems very bleak and cloudy for IFAs now-Mujhe to ek bat samajh me ayi ki is sab ke piche AMCs ka bada hath hai-sab kuch ho raha hai per AMC chupchap hai-kyo?(why)?
why not any AMC person ready yo speak in public against these moves?
last but not the least fear i have in mind is about Trail commission which all AMCs are trying to popularise in AMC meetings.
In future when Brokers will try hard to accumulate AUM-and the AMCs will think that they can make more profit if Trail commission is abolished or reduced-they will ask SEBI in secret to issue another FATWA-and SEBI will do this as it did by putting 1% exit load on investors(INVESTOR KI BHALAI KI YAH AMC KI BHALAI KI?)-
same way when trail commission will be abolished and SEBI will advice to charge a fees from investtors for AUM maintanance and no investor will pay this charge any way because at present they are not paying FEES for services for new purchases(My on eof investor refused to pay me Rs 100 per SIP application-and i advised him to go directly to save this amount-he was trying to bargain for his 6 SIPs)-so i did not took the business-
Point is if they dont pay 100 rs per SIP application-will they pay maintanance fees for AUM?
and AMCs will accept this because they will save huge money by abolishing Trail commission-
IN LOGO KA KOI BHAROSA NAHI_AAJ BOLA KAL BHUL GAYA-KAL TRAIL COMMISSION ME BHI KAHENGE-WOH SAB TO SEBI NE KIYA HAI-
So guys-i think it is better to quit MF business now if upfront is not paid by AMCs-
I guess we distributos should not fall in trap of trailcommission-rather we should ask for only increase in upfront in place of trail like any other commission based business-
and my advice is dont stick to MF business now-just go for some other job or business-i have joined another marketing job now-because i know IFA ka KOI MAAI BAAP NAHI HAI_AMC SAB BADMASH HAI-no amc guy will ever support IFAS

shankar

7 years ago

Actually what the fact is that Mr Pranab Mukherjee,our FM,Big Beuracrates ,SEBI,AMFI etc dont want the common people to invest in MUtual fund.that is the reason that they are making every thing possible so that 90% of indians dont enter the Mutual fund industry...Shame on them... Corrupted people dont keep money in MF.They keep their money in Swiss bank......

jignesh n vyas

7 years ago

Bhave ke jai ho. Now kyc for all application include small amt. this is problem for investor and distributors.

Madhusudan Thakkar

7 years ago

The series of blunders have made SEBI look like DESTROYER instead of regulator.This is just tip of the ice-berg.
Rather than remedy it has now begun to employ diversionary tactics like KYD norms,recent circular to AMCs not to spend on distributors etc.This is a diabolic strategic design to denigrate distributors by painting them as "villains".
SEBI has chosen to cover up its misdeeds and misgovernance by attacking distributors.
Shockingly there is not an iota of shame nor any remorse in SEBI.

REPLY

Madhusudan Thakkar

In Reply to Madhusudan Thakkar 7 years ago

POSTSCRIPT: In yet another move KYC norms have geen made compulsory from 1st Jan.'11.
THIS IS LAST NAIL IN THE COFFIN.
"PANNI AAB SAR KE UPAR SE JAA RAHA HAI"

Roopsingh

In Reply to Madhusudan Thakkar 7 years ago

Sirji,
Mujhe to ek bat samajh me ayi ki is sab ke piche AMCs ka bada hath hai-sab kuch ho raha hai per AMC chupchap hai-kyo?(why)?
why not any AMC person ready yo speak in public against these moves?
last but not the least fear i have in mind is about Trail commission which all AMCs are trying to popularise in AMC meetings.
In future when Brokers will try hard to accumulate AUM-and the AMCs will think that they can make more profit if Trail commission is abolished or reduced-they will ask SEBI in secret to issue another FATWA-and SEBI will do this as it did by putting 1% exit load on investors(INVESTOR KI BHALAI KI YAH AMC KI BHALAI KI?)-
same way when trail commission will be abolished and SEBI will advice to charge a fees from investtors for AUM maintanance and no investor will pay this charge any way because at present they are not paying FEES for services for new purchases(My on eof investor refused to pay me Rs 100 per SIP application-and i advised him to go directly to save this amount-he was trying to bargain for his 6 SIPs)-so i did not took the business-
Point is if they dont pay 100 rs per SIP application-will they pay maintanance fees for AUM?
and AMCs will accept this because they will save huge money by abolishing Trail commission-
IN LOGO KA KOI BHAROSA NAHI_AAJ BOLA KAL BHUL GAYA-KAL TRAIL COMMISSION ME BHI KAHENGE-WOH SAB TO SEBI NE KIYA HAI-
So guys-i think it is better to quit MF business now if upfront is not paid by AMCs-
I guess we distributos should not fall in trap of trailcommission-rather we should ask for only increase in upfront in place of trail like any other commission based business-
and my advice is dont stick to MF business now-just go for some other job or business-i have joined another marketing job now-because i know IFA ka KOI MAAI BAAP NAHI HAI_AMC SAB BADMASH HAI-no amc guy will ever support IFAS-

shankar

7 years ago

Ask C.B Bhave to make a law to BAN the redemption of Mutual Fund in Equity Schemes as he made a law to ban the entry load..........Money once redeemed will not enter MF market because who is their to bring the money...if CB Bhave is thinking that the AMC,the big broking house,banks etc are going to ask people to put money in MF than its a very negative thinking,,,Those houses dont bother whether money is in or out ....IFA khatam.....
Equity market Khataam....

Destimoney keen to ramp up in high-stakes financial services business

Funded by a renowned PE firm New Silk Route, financial services provider Destimoney Securities is looking to make further inroads in a highly competitive environment

The attractive yet cutthroat world of retail financial services and distribution is like a rainbow being chased by companies big and small. Everyone, from banks to non-banking financial companies (NBFCs) is keen to get a larger share of the mammoth pie.

Destimoney Securities is another such financial services provider that is geared up for a more aggressive expansion into this business. Recently, Kerala-based lender Dhanlaxmi Bank invested Rs13 crore for acquiring a 15% stake in Destimoney Securities. This is yet another instance of a bank tying up or investing money in a brokerage firm to offer a bouquet of financial services to its customers. Axis Bank-Geojit BNP Paribas, Bank of Baroda-India Infoline, SBI-Motilal Oswal are just some of the examples of alliances between banks and brokerage houses.

Dhanlaxmi Bank currently offers Destimoney products and services from across all its existing and new branches. The online trading product is being marketed as "Dhan4U" and is currently being offered to all the customers of Dhanlaxmi Bank. Going forward, other product offerings of Destimoney, namely, Portfolio Management services, Portfolio Advisory services, Commodity & Currency trading services, etc, shall be offered to all existing and new customers of the bank, points out Vivek Vig, managing director, Destimoney Group.

Speaking about the nature of Dhanlaxmi's investment in the company, Vivek Vig said, "This investment into Destimoney Securities is an extension to the strategic partnership with Dhanlaxmi Bank to offer online trading facility to the bank's existing and new CASA customers. It shall also bring in greater synergy and focus towards expanding (the) product basket to (the) bank's customers and also increase fee-based revenue for the bank. Both the partners are keen to set up high-quality infrastructure and technological platforms to offer value-added products and services to middle India markets." 

Destimoney claims to differentiate itself from its competitors through a unique client-centric philosophy and an ethos of integrity. On his company's game-plan for further expansion, Mr Vig said, "Destimoney shall continue to grow its business besides this partnership with Dhanlaxmi Bank. We are committed towards building a world-class retail financial services powerhouse and will continue offering value-added products and services to 'Middle India'."

Destimoney Securities is currently offering its products and services through 15 branch offices and over 100 associate partners spread across more than 50 cities. It hopes to continue expanding its reach and point of sale across strategic territories within the country.

Responding to whether the company would seek more investments in the future, Mr Vig said, "Destimoney is on the growth path and shall continue making fresh investments into the company to support its accelerated growth either through its existing shareholders or from other investors, going forward."

Destimoney Securities is a 100% subsidiary of Destimoney Enterprises, a financial services and advisory company owned and controlled by private equity firm New Silk Route (NSR). NSR acquired a 100% stake in the business in
mid-2008. The fact that a respected and well-known private equity firm like NSR invested a sizeable chunk of money into this business is a testimony to the potential of the nascent financial services industry in India.

Various PE funds have tried their hand at this business, which includes the investment by Barings India Private Equity in Cochin-based JRG Securities back in 2007. NSR is a leading Asia-focused growth capital firm founded in 2006 with $1.4 billion under management, focused on the Indian subcontinent, as well as other rapidly-growing economies in Asia and the Middle East.

The firm is led by Rajat Gupta, Victor Menezes and Parag Saxena, all with track records of building and leading global organisations.
 

User

COMMENTS

surya

5 years ago

In hyderabad destimoney securities is fake company dear shivashivani friends dont go your carrier is loss

GRAM

7 years ago

Hi,
Looks like a prelude to a sell out by NSR. If anyone has been looking at Destimoney, or even earlier from their days as Dawnay Day, it was evidently clear that retail equity broking is a different kettle of fish.

Dhan Bank probably will want to soon change the name to Dhan securities !!!

Wednesday Closing Report: Sensex flat for now; but it’s not a plateau

The indices witnessed another choppy session on the lack of any positive trigger. Quarterly results of Indian companies were mixed, as a result of which investors chose to wait and watch before making any fresh move.

The market opened lower today, tracking unsupportive global cues. Volatility continued for another day, with the indices moving on both sides of the neutral line on quite a few occasions. Every move into the green was followed by a dip into the negative territory. However, the broader indices stood firm trading with good gains today.

The see-saw continued unabated in the post-noon session with the indices touching the day’s lows towards the close of trade but the market managed to end the session just above that figure.

The Sensex ended 56.77 points (0.27%) down at 20,875, struggling hard to regain the highs seen last week. The benchmark touched an intraday high of 20,971 and a low of 20,850 during the session. The Nifty settled at 6,275, down 25.85 points (0.41%). The index swung between a high-low of 6,307 and 6,269, respectively.

The market breadth was tilted in favour of the declining stocks today. The Sensex closed with 19 gainers and 11 declining stocks. The Nifty list had 34 stocks that ended lower against 16 stocks that edged higher. The broader indices outperformed the key benchmarks today. The BSE Mid-cap gained 0.29% while the BSE Small-cap index surged 0.86%.

The top gainers on the Sensex were Mahindra & Mahindra (up 3.05%), Tata Motors (up 2.49%), Infosys (up 1.01%), Wipro (up 0.80%) and Oil & Natural Gas Corporation (up 0.71%). On the other hand, the laggards included Cipla (down 1.96%), State Bank of India (down 1.78%), Bharti Airtel (down 1.77%), BHEL (down 1.74%) and Hindalco Industries (down 1.60%).

BSE Consumer Durables (up 4.78%), BSE Auto (up 1.12%), BSE IT (up 0.73%) and BSE TECk (up 0.31%) were the sectoral gainers today. The sectoral losers were led by BSE Fast Moving Consumer Goods (down 0.99%), BSE Bankex (down 0.76%) and BSE Capital Goods (down 0.71%).

Markets in Asia settled mixed on speculations that the Chinese government will initiate fresh measures to curb rising property prices. On the other hand, financial stocks led the gains on the Nikkei on hopes that global regulations would not impact the country’s banks.

The Jakarta Composite gained 0.52%, KLSE Composite added 0.10%, Nikkei 225 jumped 1.40%, Seoul Composite surged 1.05% and Taiwan Weighted gained 0.06%. On the other hand, the Shanghai Composite was down 0.63%, the Hang Seng was down 0.85% and Straits Times fell 0.74% today.

Domestic passenger car sales jumped by 37.99% to 1,82,992 units in October compared to 1,32,615 units in the same month last year. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM) today, motorcycle sales in the country during the month grew by 43.31% to 8,76,810 units from 6,11,828 units in the same month last year.

The US markets closed in the red for the second day in a row on Tuesday, as investors questioned the viability of the Fed’s stimulus package announced last week. Besides, inventories at US wholesalers grew more than twice as much as expected in September. While some see the build-up as a sign of higher demand, others are worried that supply would outstrip demand.

The Dow declined 60.09 points (0.53%) to 11,346. The S&P 500 shed 9.85 points (0.81%) to 1,213. The Nasdaq fell 17.07 points (0.66%) to settle at 2,563.

The Comptroller and Auditor General of India (CAG) today said it has submitted to the government the report on the second generation (2G) spectrum allotment that may have caused a loss of over Rs1.76 lakh crore to the exchequer.

Sources in the know say that the CAG has accused the telecom ministry for undervaluing 2G spectrum, sold to new players in 2008, and held that the allotment price was not realistic, which has caused a revenue loss of Rs1,76,700 crore to the government.

Foreign institutional investors were net buyers of stocks worth Rs474 crore on Tuesday. Domestic institutional investors were net sellers of equities worth 528 crore on the same day.

Realty major Parsvnath Developers (down 0.46%) is likely to raise about Rs100 crore this month by selling stake in a housing project to private equity firm.

The company is in talks are with couple of private equity (PE) firms and deal is likely to be finalised this month, according to sources. The company plans to dilute stake in a housing project, they added.

Tata Motors (up 2.49%) today said it would ask Nano customers to bring back their cars to add safety devices free of cost to prevent the vehicles from catching fire, but insisted it was not a “recall.” The company, however, said that the addition of safety devices, a lesson learnt from some of its brand new Nanos catching fire, was optional.

After these incidents, Tatas had engaged experts to get into the details for the cause of the mishaps, and its internal report had said that there was no manufacturing defect.

OP Jindal Group company Jindal Saw (down 1.81%) has bagged orders worth over Rs600 crore from domestic and overseas markets for supply of pipes, used for the transportation of oil and gas.

With these contracts, the total order book of the company stands at about Rs4,000 crore, it added.

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