Mutual Funds
Indiabulls MF garners Rs102 crore through Gilt Fund

“Indiabulls Mutual Fund has garnered Rs102 crore through its first duration product, Indiabulls Gilt Fund,” the company said in a release

Mumbai: Indiabulls Mutual Fund said it has garnered Rs102 crore through its gilt fund, reports PTI.

 

The new fund offer opened for subscription on 28 December 2012 and closed on 7 January 2013. It will reopen for ongoing purchase and sale from 11 January 2013, it added.

 

The private fund house, which has seven schemes in its portfolio, reached an AUM (assets under management) of Rs3,000 crore in its first year of operations last October, the release said.

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SARE Homes inks pact with ICICI Bank

SARE Homes has offered customers an option to pay 20% of the booking amount for an apartment, an offer which would be available for a limited period in association with ICICI Bank, a company statement said

Chennai: SARE Homes has inked a Memorandum of Understanding with ICICI Bank to offer special finance schemes for the real estate developer’s two upcoming projects, reports PTI.

 

For launching the two projects, SARE Homes has offered customers an option to pay 20% of the booking amount for an apartment, an offer which would be available for a limited period in association with ICICI Bank, a company statement said.

 

“The present scheme is in association with one of the country’s banking institutions, ICICI Bank, which will further facilitate home buying for a large number of customers,” SARE Homes, executive director, David Walker said.

 

SARE Crescent ParC is part of a 112-acre residential township coming up at Old Mahabalipuram Road, with prices beginning from Rs38.5 lakh onwards.

 

SARE MeadowVille is another project offering expandable villas coming up at GST Road, with prices beginning from Rs32.5 lakh onwards. The project, in the second phase of development, offers different type of expandable villas, the statement added.

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Temper your expectations: ICICI Securities

Earnings growth will be slow, the rupee will be under pressure and political uncertainties will worsen as we approach the general elections

According to ICICI Securities, even though the economic climate has improved considerably and the stock market has responded positively, expectations need to be tempered. According to the brokerage, “the earnings downgrade cycle is not over yet, current account deficit (CAD) and fiscal deficit remain big concerns, political uncertainty in H2CY13 could be a key factor and there is limited scope for further rerating of the market, 2012 having front-ended market returns.” In other words, the revival in economic growth, a possible interest rate cut on the back of likely lower inflation and more reform announcements, better macro indicators in the US and China, the world’s largest economies, have been largely factored in by the market.

 

ICICI Securities expects an 11% in Nifty EPS growth in FY14 and 13% growth in FY15 (adjusted downward by 3% and 1% respectively to provide for likely downgrades). It has set a December 2013 Nifty target is 6,550, an upside of ~9%, based on a P/E of 14x FY15E. This looks reasonable, except that December 2013 will not discount the 2015 earnings given the political uncertainties as we approach the general elections.

 

The brokerage sees significant risk to the earnings of top contributors to FY14 earnings—Tata Motors, banks, oil and gas, and capital goods companies. ICICI Securities recommends an overweight stance on IT, telecom and cement, and underweight on capital goods, power and real estate. Among frontline stocks, the brokerage sees 22 companies in the Nifty 50, which contribute over 85% of Nifty earnings growth for FY14E, while the top 12 contribute over 66%. Interestingly, it sees significant risk to consensus earnings from:
 

Banks: On account of a margin squeeze, PSU banks’ earnings would be further impacted by negative surprise on asset quality.
 

Tata Motors: On account of under-estimation of its R&D expenses and slower than expected domestic recovery.
 

RIL: Gross refining margin could disappoint.
 

ONGC: Less aggressive retail price hikes and continued 40% burden sharing
 

BHEL, L&T: More downside to BHEL’s earnings due to weak order inflow and stretching of execution. Stretched execution as well as order cancellation could impact L&T’s earnings, too.
 

Cairn India: More downside to earnings due to higher income tax rate and slower than expected production ramp-up.

 

ICICI Securities identifies the problematic macro issues as well. CAD is likely to end FY13 at a crisis level of 4.75% and FY14 at 3.9%. It also expects the rupee to fall to 57/dollar in FY14, which would feed into inflation as well as domestic liquidity crunch. Fiscal deficit too is likely to be stretched, despite the best efforts of the finance minister. We estimate FY13 fiscal deficit at 5.9% and FY14 at 5.2%, hardly a comfortable position. Risk of political uncertainty in H2CY12 is high, as political parties supporting the Congress are likely to find the time right to attempt shedding their anti-incumbency.

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