Going retro

When mobile phone technology improved, the trend favoured slimmer machines. But larger phones are making a comeback now.

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Friday’s Market Preview: Flat-to-down opening likely

The market may see a flat-to-down opening as economic woes from the across the globe continued to pour in. SGX Nifty was trading at 5398, down 25 points. However, we can expect some action in specific stocks from corporates based on their earning numbers to be announced today.

Yesterday the market witnessed great deal of volatility on the expiry day of the July futures and options (F&O) contract. Besides, unsupportive global cues added to the woes in the morning session. However, food inflation for the week ended 17th July falling by 2.8 percentage to 9.67% from the previous week’s reading of 12.47% energised the market into the positive terrain. While ups and downs still persisted, the key benchmarks ended with marginal gains on last half-hour buying in select sectors. The Sensex settled marginally higher by 34.6 points (0.2%) at 17,992 and the Nifty ended up 11 points (0.2%) to 5,409, managing to mark its close about the 5,400 level.

The US market ended in the negative terrain for yet another day on concerns about the economy and lower earnings expectations from technology and consumer companies. President of the St Louis Federal Reserve Bank, James Bullard, expressed worries that the US could fall into a Japan-style dilemma of falling prices and investment. The comment pressured stocks before a late session rebound. The Dow fell 30.7 points (0.3%) to 10,467.16. The S&P 500 fell 4.6 points (0.4%) 1,101.54. The Nasdaq fell 12.8 points (0.5%) to 2,251.69.

Asian markets were trading lower. Japan’s unemployment unexpectedly rose for a fourth straight month and industrial production fell the most in more than a year, signalling the economic expansion is poised to slow. The jobless rate rose to a seven-month high of 5.3% in June while factory output slid 1.5% from May. The development, along with concerns raised in the US led the markets in the region into the negative terrain in early trade.

Shanghai Composite was down 0.5%, Hang Seng was down 0.1%, Nikkei 2252 was down 1.5%, Straits Times was down 0.3%, Seoul Composite was down 0.7% and Taiwan Weighted was down 0.6%. On the other hand, Jakarta Composite and KLSE were up 0.1% each. The SGX Nifty was down 27 points at 5,396 over its previous close of 5,423.

The Asian Development Bank (ADB) on Thursday said it expects India’s economy to grow by 8.2%, less than projected by the government and the Reserve Bank of India (RBI). The multilateral lender had earlier this month upgraded its growth forecast for Asia to 7.9% for 2010, up from 7.5% projected in April, while keeping the forecast for India unchanged at 8.2%.

On the political front, the government is in no mood to allow voting on the issue of price rise as demanded by the Opposition. Parliament sources said that the government will not allow the issue of price rise being taken up for discussion in the Lok Sabha under Rule 184 which entails voting.

Companies due to announce their quarterly numbers today include ABB, Aditya Birla Nuvo, Edelweiss Capita, Reliance Infra, Reliance Power, Reliance Natural Resources, TV18 and Uniply, among others.


Mutual fund houses to submit report on suspicious transactions to intelligence unit next month

In a bid to prevent unauthorised funds from entering and exiting mutual funds, the Financial Intelligence Unit (FIU), is seeking its first submission of Suspicious Transaction Reports (STRs) from mutual fund (MF) registrar & transfer agents (RTAs) under the revised provisions of the Prevention of Money Laundering Act (PMLA). According to industry sources, RTAs like CAMS, Karvy and Deutsche Investor Services, which have been following STR procedures since 1 July 2010, will file their first sample report next month.

“The FIU is revising the STR reporting process. It expects RTAs to report directly to them,” a source familiar with the development told Moneylife, preferring anonymity.
The STR contains details of investors carrying out dubious transactions. For instance, if an investor requests an address change or switches money from one fund to another five times in a year, the details would be recorded by the vigilance team at the RTAs and sent to the concerned fund house. The fund house then will investigate these transactions for any possible suspicious activity.
These alerts are sent to Asset Management Companies (AMCs) and the concerned fund house further reviews it. If it finds the activity to be suspicious then these AMCs will report the same to the FIU. All the parameters are decided by FIU under PMLA guidelines.
“We don’t have cash transactions in mutual funds, so it is very difficult for us to find out suspicious transactions. Therefore, it was decided that any unusual activity which is different from normal behaviour has to be tracked. It is an alert mechanism to trace suspicious elements. So it needs more investigation from the compliance side of the AMCs. Once it is classified as ‘suspicious’ then fund houses report these transactions to the FIU. The onus is more on the AMCs. They have to be doubly sure. This is being done to review what RTAs are doing, and to ensure that some quality alerts are generated. The parameters are confidential and are not supposed to be discussed in the public domain for security reasons,” said a source from the industry.
Earlier in February, the revised guidelines were contemplated in a meeting held in New Delhi that was attended by top officials from the Association of Mutual Funds in India (AMFI), the Securities and Exchange Board of India (SEBI), various AMCs and RTAs.
During the meeting, FIU instructed AMFI to form a committee of six members comprising Reliance MF, UTI MF, HDFC MF, Karvy, CAMS and Deutsche Investor Services. This committee has recommended a few more alerts and STRs for MF investments.
The FIU has also instructed RTAs to furnish a consolidated STR across the fund houses serviced by respective RTAs. The date for implementing these new guidelines would be decided by industry body AMFI after studying the sample report sent by RTAs in August 2010.
Established in 2004, the FIU is the central national agency that analyses and disseminates information relating to dubious financial transactions. FIU is an independent body that reports to the Economic Intelligence Council (EIC) headed by finance minister Pranab Mukherjee.
Moneylife has a copy of the revised guidelines issued by the FIU. However due to security reasons, we have decided not to publish the details of the transaction parameters.
The reporting of STRs to the FIU will be entrusted with principal officers of AMCs. RTAs will facilitate the alert-generation mechanism to fund houses. The new parameters contain frequent changes in bank account details, threshold of investment limits and folios, redemptions, switchovers in a short span of time, transaction activities in schemes, etc. The guidelines are applicable for Indian residents, Non-resident Indians (NRIs) and companies.



R Balakrishnan

6 years ago

Funny. Recently, M&M Finance advertised for fixed deposits. They indicated acceptance of up to Rs.15,000/- per deposit in CASH! RBI is behind SEBI in terms of regulatory check on Money Laundering.

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