Investor Issues
MCX launches futures trading in guar seed and guar gum

The trading unit of the guar seed and guar gum is 1 metric tonne each and price quote for the contracts is ex-warehouse Jodhpur, inclusive of sales tax/VAT. The basic delivery centre for both the contracts is Jodhpur and additional delivery centres include Bikaner, Nokha, Sri Ganganagar, Hanumangarh and Barmer in Rajasthan, Deesa in Gujarat, and Adampur and Sirsa in Haryana

 
Multi Commodity Exchange of India (MCX) will commence futures trading in guar seed and guar gum contracts from today (14 May 2013). The commodity markets regulator, Forward Markets Commission (FMC), has given approval for trading in guar seed and guar gum June 2013, July 2013, October 2013 and November 2013 contracts in order to facilitate price discovery and price risk management in the guar complex.
 
The trading unit of the guar seed and guar gum is 1 MT (metric tonne) each and price quote for the contracts is ex-warehouse Jodhpur, inclusive of sales tax/VAT. These are compulsory delivery contracts with Staggered Delivery Tender Period for the last 15 days. The physical delivery would be available in multiples of 1 MT for both guar seed and guar gum. The basic delivery centre for both the contracts is Jodhpur and additional delivery centres include Bikaner, Nokha, Sri Ganganagar, Hanumangarh and Barmer in Rajasthan, Deesa in Gujarat, and Adampur and Sirsa in Haryana.
 
Tick size for both guar seed and guar gum contracts is Re1 per 100 kg. The initial margin required to trade is 10% or based on SPAN, whichever is higher. As an additional risk management measure, pre-defined special margins are included in the contract. The special margin of 10%, which is over and above the initial margin, will be imposed if prices rise by more than 20%. Further, for every 10% rise in prices, the special margin charged will also increase by 10%. Additionally, if prices increase by more than 50% in the June and July expiry contracts, a special margin of 70% will be imposed. 
 
The guar seed and guar gum open position limits for a member collectively for all clients is 12,000 MT or 15% of the market wide open position, whichever is higher, and for individual clients it is 2,400 MT. The near month limits shall be applicable for 20 days prior to expiry of the contract. The near month limit for a member collectively for all clients is 4,000 MT or 15% of the market wide open position, whichever is higher and for individual clients it is 800 MT. The position limits shall be applicable for all contracts traded on all exchanges.
 
The guar gum open position limits for a member collectively for all clients is 3,000 MT or 15% of the market wide open position, whichever is higher, and for individual clients it is 1,000 MT. The near month limits shall be applicable for 20 days prior to expiry of the contract. The near month limit for a member collectively for all clients is 600 MT or 15% of the market wide open position, whichever is higher, and for individual clients it is 200 MT. The position limits shall be applicable for all contracts traded on all exchanges.

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Equity MFs continue to suffer outflows; net outflows of Rs270 crore in April

After a month of positive inflows in March 2013, equity mutual fund schemes witness another round of outflows in April 

 
Mutual funds, mutual fund, direct plan, equity mutual fund, mutual fund schemes, equity schemes, mutual fund inflow, equity fund inflow, fund flows, equity outflowsSales of equity mutual fund schemes touched their lowest since November 2012 and despite lower redemptions, equity schemes witnessed a net outflow of Rs270 crore last month. Redemptions were the lowest compared to the past 10 months, amounting to Rs3,407 crore. Poor sales is said to be the main reason for the net outflow from equity schemes. Sales of equity schemes amounted to just Rs3,136 crore, the lowest in the past five months. Not surprisingly, the number of equity folios declined further by another 2.64 lakh. Gold ETFs (exchange-traded funds) did not garner any interest as well and faced a net outflow of Rs36 crore.
 
Sales of equity schemes which picked up in the last quarter of FY12-13, could not maintain its upward trend. Sales in the quarter averaged around Rs4,500 crore per month. IDFC Equity Opportunity Series 1, a close-ended equity scheme, was the only scheme launched during the month and was able to gather around Rs253 crore in assets.
 

Mutual funds, mutual fund, direct plan, equity mutual fund, mutual fund schemes, equity schemes, mutual fund inflow, equity fund inflow, fund flows, equity outflows

In the past financial year, there has hardly been any growth in sales. Sales picked up only towards the end. Total sales in FY12-13 amounted to Rs43,364 crore, down nearly 35% from FY10-11 when total sales touched Rs66,592 crore.  Adding insult to injury, equity schemes witnessed massive redemptions leading to huge outflows. The year FY13 saw the highest outflows, which was as high as Rs14,766 crore. (Read: Equity MFs witness exodus of nearly Rs15,000 crore and 45 lakh folios in FY12-13)
 
Sales for the month of April 2013 declined by 3% from the same period last year. The reforms brought in by the regulator Securities and Exchange Board of India (SEBI) over the past year did not seem to have a positive impact on equity mutual fund inflows. 
 
Despite the poor sales, equity assets under management grew by 3.56% in April 2013 to Rs1.78 lakh crore from Rs1.72 lakh crore in March 2012. This is mainly due to the performance of the equity market over the period. The S&P BSE Sensex moved up by a similar percentage from 18,835 end of March 2013 to 19,504 at the end of April.

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COMMENTS

Suiketu Shah

4 years ago

Equity MF outflow continues and rightly so.This wl continue month after month atleast till elections of the country which are rumoured to be preponed a few months.

Nilesh KAMERKAR

4 years ago

Where is this redeemed money going? - Chit funds? Collective Investment Schemes? Ponzi Schemes? MLM schemes? Gold?

What a pity . . . money has been going out of the most productive asset class and god knows where.

Whose fault? - Blame the agents, so simple.




Vaibhav Dhoka

4 years ago

March was positive due to ELSS and RGESS.And from April withdrawal starts and so the decline.

High Mark to sell 250 million records to another credit bureau?

High Mark Credit Information Services' promoter Prof Dr Pandya is negotiating with another credit bureau for an asset sale including about 250 million records collected from members. This is a gross violation of CIRC Act, alleges a former employee in a complaint to the regulator

 
Troubled and cash-strapped High Mark Credit Information Services Pvt Ltd, (High Mark Credit Bureau), one of the four credit information companies (CICs) in India licensed by the Reserve Bank of India (RBI), is negotiating with other credit bureaus to do an asset sale including 250 million records collected from member institutions, says a complaint. A former employee of High Mark has filed this complaint to the finance minister, RBI governor D Subbarao, secretaries from the finance ministry and financial services alleging gross violations in the proposed asset sale of the credit bureau.
 
Following the exit of several of its top managers and the failure of its rights issue last year, the credit bureau is under severe financial stress. Earlier, its promoter Prof Dr Anil Pandya, who lives in the US, tried to rope in a foreign rating agency to put in additional capital. However, it did not materialise.
 
This time Prof Dr Pandya is negotiating with an Indian credit bureau for the asset sale to circumvent any regulatory permissions. “If this (asset sale) goes through, then all the proceeds from asset sale would remain at Prof Dr Pandya's discretion, while the shareholders would get nothing until the company is liquidated. In short, after the asset sale, High Mark would have a license and cash but no business,” the complaint says.
 
The ex-employee pointed out that due to mis-management or absence of any management, High Mark, is at a stage where its existence is at stake. “This in turn jeopardizes the valuable records of various financial institutions including public sector banks, cooperative banks, micro finance institutions, etc. This also is a gross violation of the Credit Information Companies Regulations Act, 2005 (CICRA), as the data is collected after signing individual agreements with member institutions. The asset sale is being designed in such a way so that it would not require any approval from the RBI,” the former employee said.
 
Moneylife sent a mail to Prof Dr Pandya and would incorporate his reply as and when we receive it.
 
High Mark is the only bureau started by individuals. Prof Dr Pandya, whom the board designated as the executive chairman, started the business with nominal capital. While Prof Dr Pandya continued to be a tenured full Professor at the College of Business, Northeastern Illinois University in Chicago, and an Adjunct Professor at Northwestern University Kellogg Graduate School of Management, he was also appointed as executive chairman at High Mark.
 
While High Mark never appointed Prof Dr Pandya on a whole-time basis, he was able to continue teaching in the US as well work with the credit bureau on a part-time basis. As per the Credit Information Companies Regulations Act, 2005 (CICRA), when a credit bureau appoints a chairman on a part-time basis, it then must have a managing director or full-time director to look after the management and affairs of the bureau. 
 
According to our sources, High Mark violated CICRA as well as Companies Act, while appointing Prof Dr Pandya as its executive chairman. The issue was first raised by Siddharth Das, former chief operating officer (COO) of High Mark, before the company’s board. But the board apparently ignored it. Subsequently, Das sent a legal notice raising this issue. Ajay Kohli, former chief executive of High Mark, tried to bring this to the attention of the board. This too was ignored.
 
Earlier, High Mark was negotiating with Italy-based CRIF credit bureau for a bailout. We learned that CRIF executives had already met senior executives to assure them of support and continuity after takeover. However, there is no news on this front.
 
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