If the Nifty closes above 5,560, there could be gains all the way to 5,680. On the lower side, the support will be at 5,430
The Sensex opened today in the positive at 18,573, while the Nifty was at 5,547. However, the market moved sideways through the day with nothing major happening on the domestic from or internationally that would swing it either way. The indices slipped into the red for just about an hour in morning trade, during which period they touched intraday lows of 18,455 and 5,525. In the late afternoon session, the Sensex and the Nifty made highs at 18,622 and 5,575 respectively.
The Sensex closed 72 points up at 18,585 and the Nifty was 24 points up at 5,565. Looking ahead, it the Nifty closes above 5,560, there could be gains all the way to 5,680. On the lower side, the support will be at 5,430. The market is still in its sideways move, but the bearish picture has not faded.
The Sensex had 23 gainers and 7 losers. The major gainer was Hero Honda (3.31% up) followed by DLF (up 2.46%), Tata Motors (1.85% up), SBI (1.78% up), Reliance Infrastructure (rose 1.48%). Major losers were NTPC (down 1.86%), Tata Power (down 1.39%), ONGC (down 1.30%), Larsen & Toubro (down 0.98%).
The Nifty had 34 stocks which gained and 16 stocks that fell.
All the BSE sectoral indices, except for the BSE Consumer Goods Index, were in the positive. BSE Realty rose 1.40%. While the BSE Consumer Goods Index fell 0.03%, the other 11 sectoral indices gained between 0.04% and 1.01%.
The Wholesale Price Index (WPI) data for April is due on 16th May, whereas industrial output data for March is expected on Thursday. According to a poll conducted among economists of 15 leading organisations, the IIP (Index of Industrial Production) is forecast to grow at 3.5% in March.
The India Meteorological Department (IMD) has forecast that the southwest monsoon will be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. It has indicated that there is a very low probability of a deficit in the rainfall (below 90% of LPA) or even excess (above 110% of LPA).
The State Bank of India’s announcement yesterday of a hike in its benchmark prime lending rate by 75 basis points to 9.25%, saw the stock gain 1.78%.
Tata Motors, the country’s largest automaker by revenue, has launched a passenger carrier, ‘Magic Iris’, and a micro truck, ‘Ace Zip’, with an aim to extend its share in the domestic light commercial vehicles market. The Tata Motors stock price rose 1.85%.
Globally, markets were looking for Chinese inflation data figures. China's inflation for April was 5.3%, slightly higher than expected, but lower than the 32-month high of 5.4% in March. But industrial output and loans growth eased much more than expected in April, suggesting slower activity in the world's second-biggest economy. Except for the Shanghai Composite, Hang Seng and Taiwan Weighted, all other Asian indices were in the positive, and rose in the range of 0.39% to 1.28%. The Asian indices which were in the negative slipped in the range of 0.03% to 0.23%. (The Shanghai Composite registered the maximum loss.)
On Tuesday, the US government cut its projection for world oil demand this year by the most in 10 months. India imports a majority of its crude oil requirements and high oil prices have raised concerns about the widening current account deficit. High oil prices raise concerns about a higher oil subsidy bill for the government and its negative impact on the fiscal position.
The progress of this MLM company reminds one of the Home Trade scam, where the company spent huge money on advertising and signing mega celebrities like Sachin Tendulkar and Shah Rukh Khan to gain publicity, before duping several people, including the stars
Many agents of SpeakAsia, the self-proclaimed 'biggest online survey company', have posted comments all over the Internet about the company's 'Gen X Bazaar' event being held in Goa from May 9 to 11 and the special train that was booked to take participants for the programme.
Some agents said, and we quote, "In the entire history of India this has NEVER happened - it's spectacular. SpeakAsia arranging a special train for SpeakAsians only is a BIG news." More about the special train and Goa bash later.
The company or its agents-sorry panellists and distributors-are spending huge money on advertising, social gatherings and trying to buy credibility for its dubious MLM scheme. Over the past few weeks, SpeakAsia or its distributors have published half-page ads in leading dailies and run ad films on TV channels, especially during the ongoing IPL cricket matches. So many more people have started searching for information about the company and its online survey scheme.
The company had also issued a public notice some time back. But despite the notice, many other people are also coming together on the Internet, forming groups and forums to prevent the MLM scheme from spreading further.
Following letters from Moneylife to the Reserve Bank of India (RBI) on the issue, the central bank is said to had discussed it and is contemplating action against the MLM company, according to our sources.
Now to the special train and the Goa bash. There is no doubt that booking a special train for a big bash at a beach resort in Goa was done to attract more eyeballs and so hook more gullible people who might choose to join the MLM scheme. For one, booking a special train is not a big deal and can be done by any one who has the money to pay for it. The Indian Railways charges Rs9 lakh as a minimum registration-cum-security amount and the booking must be done 30 days before the date the train is required.
Also, a special train is nothing so special, as people in and around Mumbai are aware. Every year, hundreds of thousands of of people travel by special trains to Mumbai, to pay tribute to Dr Babasaheb Ambedkar on 6th December. (About 200,000 people visited Chaityabhoomi, the memorial site, on 6 December 2010.)
Some SpeakAsia agents have been gung-ho about the cheap fare by the special train. On the contrary, we learn that each agent had to pay $170 for a ticket in the three-tier AC and they were required to pay from their e-wallet accounts, for which the currency conversion rate is Rs50 a dollar. This means the agents paid Rs8,500 or equivalent for the journey by the special train as against the scheduled fare of about Rs1,450.
Some agents said that the $170 included ticket charges and meals. However, even if one were to take into account the ticket fare from Delhi to Goa and back along with meals, the charge should not have been more than Rs5,000 per person. So, the agents paid at least Rs3,500 of their hard-earned money over and above the actual charges from their e-wallet. This excludes the cost of accommodation.
Now about the event. As SpeakAsia often said, it was a Gen X Bazaar, where people (its agents) would come together to shop products from companies like Levis, IFB, Maruti, Skoda, etc. As is the practise with many manufacturers and service providers, they offer additional discounts for a group. (Check some group buying sites) The same logic applies to the Goa bazaar as well and there was nothing special for the agents.
How the agents would carry the products they bought, back home, is a different story. Except for the Levis jeans (that they could wear or carry in their bags) and automobiles (they would have to drive back in the vehicle and forget the special train ride back), all other products would have to be transported and this would cost more money. (Try offering money from an e-wallet to the 'truckwallah' or any local goods carrier.) In addition, the goods purchased at a discount at the bazaar would likely attract local levies, like octroi, that would have to be paid in real currency.
Some agents were very excited about the entertainment programmes in the evenings. According to the information obtained from some blogs, Bollywood actor Rani Mukherjee and Neha Dhupia and performers like Mika Singh and Abhijeet Sawant were there to entertain the agents. All the names mentioned are commercial artists who do entertainment shows anywhere and everywhere for a fee. Here again, nothing special.
A gathering of people under the pretext of a seminar or a bazaar is not unusual, especially in MLM circles. In fact, all multi-level marketing (MLM) companies have such gatherings at posh locations regularly to keep their flock intact and growing. Remember, how JapanLIFE and GoldQuest or QuestNet used to invite people to functions at five-star hotels?
Just for reference, a few years ago, Home Trade endorsed mega celebrities like Sachin Tendulkar, Hrithik Roshan and Shah Rukh Khan to cover up its meticulously planned financial scam. (Read, Home Trade's 'starry' gameplan.)
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Special report on SpeakAsia by Star News
(Courtesy: Star News)
The Pension Fund Regulatory and Development Authority is trying to revive the New Pension System starting with a review of fund managers.
The Pension Fund Regulatory and Development Authority (PFRDA) will hold a meeting with fund managers of the New Pension System (NPS) on 17th May to review their performance, a senior official of PFRDA has told Moneylife.
"We are going to have a meeting with the fund managers to review their performance. They are supposed to give us presentations on 17th May," said Kamal Kumar Chaudhry, chief general manager, PFRDA.
The NPS was introduced on 1st January 2004 and it is available to all citizens on a voluntary basis and is mandatory for Central government employees (except armed forces personnel) appointed on or after 1 January 2004.
Six fund managers-LIC Pension Fund Ltd, SBI Pension Funds Pvt Ltd, IDFC Pension Fund Management Co Ltd, ICICI Prudential Pension Funds Management Co Ltd, Kotak Mahindra Pension Fund Ltd and Reliance Capital Pension Fund Ltd manage funds and subscribers are free to choose any one of these managers.
Though NPS has immense potential for retirees, especially those who do not manage a steady source of income after retirement, there has been a tepid response to the scheme.
Moneylife has been constantly pointing out that there are a number of lacunae in the way the government is handling the scheme. (Please scroll down for more on this issue).
The lukewarm response for this scheme-right since its inception-is thanks to the lack of interest from service providers in selling the scheme and stringent restrictions for withdrawal. There is also no authentic data or mechanism to access the historical performance of the NPS fund managers for common citizens.
PFRDA, which acts a regulator for the pension sector and is supposed to maintain transparency in this field, is not updated with the past performance of the fund managers.
An investor can only access the previous day's net asset value (NAV) of any scheme under the NPS on the Central Recordkeeping Agency's (CRA) website. A few fund managers also publish the previous day's NAV as well as historical NAV, but there is no way to get a comparative view of all the funds so that a comparison can be done.
"As far as yearly performance is concerned, we have received details from the fund managers and our consultants are working on that. After the meeting, we will publish all information on our website in the same week," said Mr Chaudhry.
Even CRA, which bears the responsibilities of recordkeeping, administration and customer service functions for all subscribers of the NPS, does not maintain the historical performance of the fund managers.
"We cannot provide you any information regarding the fund managers' performance. For the desired information you can contact the PFRDA," an executive from CRA told Moneylife.
Under the NPS guidelines, fund managers are allowed to invest in the specific class mentioned by subscribers and the proportion of the investment is also defined by the PFRDA for every class. There has been very narrow room for the fund managers to play with their corpus.
Practically, there should not be much of a difference in returns. However, it has been observed that fund mangers sit on a large portion of cash that leads to losses in returns.
According to a media report, the performance of NPS fund managers was varied during calendar year 2010. In the Tier-1 category, Reliance was the top fund manager for the 'E' class. Reliance gave 24.66% return in the 'E' class, while SBI (which generated 16.47% return) and UTI (15.66% return) took second and third place in the same class. In the 'C' class, SBI gave 13.30% return and UTI's return was 8.83%. In the 'G' class, there was a huge difference between SBI and Reliance's returns as SBI managed 10.36% return, whereas Reliance gave only 7.06%.
These figures clearly indicate that much needs to be done to get the fund managers live to the letter and spirit of NPS.
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• Will Yogesh Agarwal create a moral hazard for the New Pension Scheme?
• Another turf war: PFRDA wants pension fund managers to provide annuity, not insurers
• Govt introduces Bill to give statutory power to PFRDA