No rally in sight

The market will remain under pressure for a variety of local and international issues

The Sensex ended the day 31 points lower (0.17%) to 17,822 points and the Nifty closed 17 points lower (0.31%) at 5,323 points. The market started the day with a sharp rise. However, it came down soon and tested the intra-day low. The market traded in a narrow range throughout the day.

European stocks fell on Tuesday ahead of US earnings reports. Key benchmark indices in the UK, France and Germany were down by 0.13% to 0.18%. Most Asian stocks fell on Tuesday, with raw-material producers and Japanese exporters drifting lower after Alcoa Inc's revenue trailed analyst estimates and the dollar weakened. Key benchmark indices in Indonesia, Japan, Hong Kong, South Korea, Singapore and Taiwan were down by 0.14% to 1.08%. Key benchmark indices in China and South Korea rose by 0.02% to 1.02%.

US stocks were up on Monday, helped by the downturn in the dollar and the aid plan for Greece. The Dow gained 8.6 points (0.08%) to 11,006. The Nasdaq rose four points (0.16%) to 2,457.87 and the S&P 500 gained 2.11 points (0.16%) to 1,196.

Closer home, the meteorological department has said that a second consecutive dry session is unlikely. The monsoon season last year was the worst in the past 37 years, creating a shortage in sugarcane and oilseed production. Data from the weather office shows that out of about 20 droughts since 1901, 17 were followed by near-normal rainfall. The weather office will issue its formal monsoon forecast in the second half of April. The wholesale price index probably rose 10.39% in March from that of the year-ago period. Projections from 20 economists ranged from a rise of 10.08% to 11%. The chief economist adviser to the finance ministry said that the economy has probably grown 8.5% in the March quarter. The secretary for financial services in the finance ministry said that a tightening of the interest rate is very likely. 

Rolta India (up 2.7%) has acquired US-based consulting, development and system integration company OneGIS Inc. The financial details of the deal were not given. Hindustan Construction Company (down 1%) has received an order worth Rs608 crore for the reconstruction and completion of a dry dock in Mumbai which is scheduled to be completed in 48 months. Container Corporation of India (up 1.3%) said on Monday, (12th April), that goods worth Rs30 crore were damaged due to a fire at its export warehouse on Saturday, (10th April). There was also a partial damage worth Rs5 crore to the warehouse building. The firm’s liability for goods and warehouse facilities are fully insured. 

NTPC (up 0.7%) will soon allocate 50% of the power generated from any plant to the State where the plant is located. Now, it allocates 10% of the total power generation from any plant. Hero Honda (down 5.2%) which is running at full capacity, might have a tough time in coming days as the company is likely to launch various new models. GAIL (down 0.26%) will invest Rs15,000 crore over the next two-three years in expanding its pipeline network to connect consumption centers. Infosys (up 3.6%) reported a 5% increase in both its sales and operating profit for the March quarter from the year-ago period. Infosys expects a 2.9% growth in earnings per share (EPS) on a consolidated basis at between Rs106.82 to Rs111.38 in FY11 over FY10.

Foreign institutional investors were net buyers on Monday of Rs14 crore. Domestic institutional buyers were net sellers of Rs192 crore.

User

COMMENTS

K B Raut

7 years ago

Markets look to be headed for 16000 levels in next 12-15 sessions.

What status quo? SEBI hits back again

SEBI has told all the 14 insurance players covered in its earlier diktat that all ULIPs launched after 9th April will require its approval

Just when all market players thought that the dust was finally settling down in the spat between the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) over unit-linked insurance plans (ULIPs), the market watchdog has fired yet another unexpected salvo in this turf war between the regulators.

SEBI has said today that any ULIP launched after 9th April would require its approval, and ULIPs launched before this date would continue to operate as per the earlier norms.

But this recent SEBI diktat is all the more surprising because yesterday (12th April) finance minister Pranab Mukherjee had clearly stated that the status quo would be maintained with regard to ULIPs. SEBI’s order clearly goes against the finance minister’s statement.

Sources in the know also confirm that Mr Mukherjee has not yet read SEBI’s latest circular.

According to SEBI’s circular (dated 13th April): “This is to bring to the notice of investors that SEBI has decided to keep in abeyance, till further notice, the enforcement of the above directions (in accordance with the order dated 9th April) with respect to the ULIP schemes /products existing on the date of the order, i.e., 09.04.10. However, with respect to any new ULIP schemes/products launched after 09.04.10, the directions mentioned in the said order will be enforced as indicated therein.”

“SEBI’s order is in abeyance, it’s not cancelled. The FM could have said that it (regulation of ULIPs) comes under the purview of IRDA. (The) IRDA lobby was so strong that the government could not take action against IRDA directly,” said an insurance expert, preferring anonymity.

“It’s a jurisdiction issue and will be taken up by the courts; legally, it should be under IRDA’s jurisdiction. SEBI feels that (market) investments need to be regulated by it; SEBI always wanted to do it. If they succeed, it will be against the principle of natural justice and against policy holders,” says a source from Reliance Life.

User

COMMENTS

ROOPSINGH SOLANKI

7 years ago

Mr KR-u have ignored the fact that ulips charge policy administrative charges per mpnth frpm Rs 30 to 60 irrespective of 5000 investment or 50000,how much percentage annually it comes-then u have ignored AMC charges-which is just same as any equity ot debt MF-ulips charge 1.5% bcos they are mostly debt funds-and in MF debt funds have less then 1.5% annual expanse-so i feel i ned not to explain it more-and i told u already-trail is paid in MF bcos open ended schems have to retain AUM-but in ulips-due to lock in period-they have no fear of loosing AUM-so they are clever enough not to pay any trail-now i dont want to argue any more-u may sell whatever u feel better-biut dont insist others to but ULIPS-

kr

7 years ago

Mr Roopsingh,

Dear Sir,

Ecvery one talks about high expense but Fund management charges are maximum 1.35% for norma equity fund in some cases 1.31% Please study the fact. Mf charges 2.25% to 2.5% which is 1% higher than Insurance. Than they pay 0.5% to MF Agent. I am also one and do big work. But when you sale the ULIP which I say Investor has better I say best choice. When court will look at such a ULIp they will have no choice but to say Continue.

It charges only 6% expense. read again and if Help need I can provide.

All next 29 years not a single Rs. are charged.
52 free swicthes. No tax on exit and no Exit load in one year. Please read again and come back if doubt.

So what is better. Very easy to calculate.

Look at people who has bought conventional plan and do not get return nor have exit option.

Ulip with less commission are available. It is better product than MF as asset allocation adjustment cost in MF.

Fund management charge is higher and becomes to much after 30 years investment. ULIP is far cheaper.

I get insurance, I get saving, Less mortality and If I am paying for regular terms I get more money than MF.

If I die I certainly get some one to look after my savings.

Whole world has similar product. Insurance is a product which can be sold by Advisors.

All company Ulip has Good NAv.

MF all old ones has performed very badly.

All smart money moving to Good Ulip Plan. Expense written. Shown to customer. His sign is also taken on the pages.

What more is required. It is as good as signing a cheque.

No company pays 40% COMMISSION IN uliP n. sO PLEASE CLEAR THE DOUBTow a days. Study and come back.

Mutual fund will be only good if Trail is removed. Free switching allowed. But SEBI can not and will not have apower to do that (though power already given)


Dont talk abour DO or Sm. Go back to your own knowledge.
Term plan pays more commission not 2% 10-25% so knowledge session needed by you. They charge average mortality. Ulip charge exact mortality so Mortality is cheaper.

ROOPSINGH SOLANKI

7 years ago

mr KR,it seems u have not read my comment about annual mainatanance charges and policy administartive charges-which are levied on ulip-and furtehr to make u knowledgeble-AMC pays trail from annual maintanance charrges-which insurance cos also charge-but they keep it in pocket rather paying the broker-and the argument that in ulip a client can buy more insurance in ulip-is that -in term plan insurance commission is very low for big dsum insured rather then ulip and agents get just 2 % in term insurance-so why to go for ULIP-i gues u need to learn facts from your development officer-who mostly hide important facts-like they hide the fact that wealth plus is a money market or debt fund-which will have no risk in getting NAV to minus-but insurance cos are so cheater that they never exposed this fact-

Aditya

7 years ago

Did you know that by selling ULIP's your agent qualifies for foreign trips. There is currently a scheme in a leading bank, where if you do a certain amount of premium, you get an all expenses paid trip to Spain! Now thats an incentive to sell!

Mr KR,

It seems that your world revolves only around your development officer or unit manager and you are completely devoid of facts of life beyond them.

Mutual Funds have time stamping machines, You can still buy Wealthplus for FY 09-10!

IRDA should be renamed as Association of Insurance Cos and should stop using the word "Investor benefit"

Roopsingh Solanki

7 years ago

Dear friend Sunil Harlalka,you are very right to say that SEBI is not doing its own duty-my broker firm India Infoline has debited my ledger with several unusual charges-which they are not replying-my RM got reversed few charges after months of correspondence from their HO-but neither SEBI nor customer service deptt has any reply to me regarding my complaint lodged against broker firm since 40 days-so where is SEBI on these issues-how can a broker debit some one without any reason-customer is doing trading on mercy of brokers- why can't SEBI plan to allow zero entry load in direct equity?why it needs brokers there-and those brokers churn peoles money 365 times a year-is this what SEBI wants to continue?is this real agenda of SEBI?to make people fall pray to direct casino ?why it wants to kill MF?i am sure big guys have big plans?so common man has no option but only option to be speechless pray to all these -

Roopsingh Solanki

7 years ago

i just want to tell Mr KR that ulips are real real expensive-ulips carry annual recurring expanses same as mutual funds-though MF pay trail of just .40% annually-from annual expanses of 1-2% charges-which ulip plans also deuct from NAV-next is so called policy administrative charges-which is deucted per policy monthly irrespective of any amount-and then last is mortality and allocation charges-allocation charges are minimum 2% in only big size investment-in SIP it is always above 15%-so there is no point in advocating ulips over MF-every investor has burnt fingers in ULIPS-so no need to advertise it as better then MF-SEBI has done it right to soem extent-but totally making free load is not going to make any good to investment industry-if financial minister is so KEEN and tries to be CHAMPION of investors protection-he should ask SEBI( champion of champios) to immediatly remove brokerage firms from direct equity derivative etc-and investors should be allowed to but securities directly from exchanges via trading platform from other investor-unless and untill-FM and SEBI do not do this-their all steps are just to fool the common investor-and it just reveals the conspiracy and hidden agenda to compel people to give peoples savings in hands of beurocrats through NPS route-which is none other then putting your all savings in LEGAL CASINO_

Sunil Harlalka

7 years ago

SEBI is unable to fulfill its duty as a watchdog for the small investors but want to control Insurance sector because there is lots of money involved. In my case when I approached SEBI for non receipt of Dividends, Annual reports and Shares, after split, they have directed me to Ministry of company affairs stating it doesnot come under there preview.

KR

7 years ago

It is sad to know that many people are coming as masiha of common investor.

We forget the fact ULIPS do not pay High commission now. On 10 year horizon due to various advantages it is beating the MF. That is the reason smart money moving to ULIP.

Data for MF and Insurance suggest that too only.
Not al investor are foolish. They check all expense and than make stretegic decision. 3-5% Agent commission that too one time (Such plans are there only problem is so called mutual Fund Savy people do not know that or not want to know. ) All major money going to ULIP are smart one with Tax Benefit, Asset Allocation Benefit, Chepare than Term plan (people laugh at this but do proper calculation and go for good ulip plan it is true).

It is very sad to say that SEBI is saying investor to stop buying insurance with 2-20% allocation charge in first premium.Instead go for Endowment and other conventional plan which gives 32-40% Commission and Allocation charge is as high as 65-89%.

Please reply who is benefitting.

In term plan also Avergae mortality is applicable. Why should I pay that when I have a choice to pay exact age wise mortality.

Term plan Commission is also Higher than ULIP plan. Why SEBI choose to read selectively.

All invetor who are writing here seems to have least experience of ULIp.


Please give Following Feature in MF with out entry Exit Load in ELSS.


1) Reduce ELSS Commission.
2) Stop Trail in Mutual Fund as it forms a heavy part.

0.5% trail beomces 10% trail after 20 year if money do not grow.

So trail amount is

0.5,1, 1.5 by paying same amount every year it goes to 8.5,9.0, 10.0%.


Indurance commission in Most ULIP is

12, 2, 2% on Higher side and than 1%.

So who charges more please count?

Who is for investor please reply.?

I do both and I know that I am getting more money from mutual Fund than Insurance.

But ultimate Goal of all investor is " Sukh-Shanti and Peac". Only given by Insurance.

India is a country where more pursuasion is required.

So Agent geting high-low income is better than mutual fund payout of Low-High.

3) Give free switching in ELSS.
4) All plan passed by SEBI with Insurance (SIP) has an exit load and that is heavy why so?

Can SEBI Explain. It is done by their own body.

Let SEBI explain all this.

Court is going to ask many things.


Investor benefit is surely in ULIP than conventional plan .

Any fool person also can know this. So who are we fooling right now?


ANIL

7 years ago

I congratulate SEBI & Mr. Bhave for a just action, nevertheless it is late.Even LIC ULIP schemes are charging 30% on NAV at the time of redumption for non life schemes, which is highly objectionable compared to appro. 4% on Mutual Funds.Why this disparity ?
Be bold Mr. Bhave even to fight Finance Minister Investors are behind you.We fill that there is a nexus between Political party & IRDA.

RK DHINGRA

7 years ago

its after a long time that some body is taking care of people,s hard earned money.The luxerious offices and foriegn trips are a part of the hefty allocation charges deducted from the premiums.

G N

7 years ago

why IRDA and insurance cos are worry about the SEBI registration? for a lay man Life insurance cos are there to give coverage of human life value which will benefit the dependants on the death of the policy holder. Ethically insurance cos. should not involved in money making (taking investmnet risk)business for themselves or for the public.
Thus if IRDA & life insurance cos. really want to benefit the people of INDIA , they should promote only term insurances or low cost insurances with a savings approach not with an aim to high risk investment opportunities with low insurance coverage.

Dillip Swain

7 years ago

IRDA & ISI they both want to destroy this country. ulip sold as investment by banks and agents with entry load of 20% and more. Overseas trip to agents and bank officials who exploited, cheated common man retired persons, widows .IRDA with the nexus of life insurance companies allowed and trying to exploit people of the country. The strong lobby at ministry of finance shown clearly today by irda at the cost of investor.
IRDA working like ISI to destroy the peoples money by roping to ULIP.

SEBI's move is right.

sumitra swain

7 years ago

WELCOME-WELCOME-WELCOME
SEBI MR BHABE--- KYA BAAT HAI. I REQUEST TO
ALL ADMINSTRATIVE OFFICERS SHOULD LEARN FROM SEBI CHAIRMAN.I GUESS FINANCE MINISTER AGE IS ABOVE AGE 70 YRS.HE WILL NOT QUALIFY TO BUY ULIP WITH LIFE COVERAGE.BUT HIS STATEMENT IS LIKE A POLTICIAN.DUE TO HIS WRONG STATEMENT,NEXT GENERATION WILL SUFFER.RELIANCE LIFE ALWAYS WORK WITH UNNATURAL,HAVE NO RIGHT SAY ABOUT NATURAL.SEBI HAS DONE A GOOD JOB.

Dillip

7 years ago

IRDA wants to exploit the common investor to be trapped and ruined by the ULIP by giving 20 TO 80% entry load why not promoting term plan its all about brokrage revenue profit and thats why a strong lobby behind IRDA

Ronin

7 years ago

SEBI is right. IRDA has allowed rampant mis-selling and rapacious fees, acting like a promoter instead of a regulator. MFs and ULIPs need to have identical rules as far as the investment aspect is concerned. In addition, ULIPs need to comply with insurance regulations for the insurance component.

Sustained market rally fails to usher in NFOs

There has been a sustained bull market playing out, but new fund offers have virtually dried up

A sustained market rally is usually a harbinger of a slew of new fund offers (NFOs) from fund houses eager to tap into the prevailing optimism. Indeed, past data indicates that, with a slight lag, any prolonged rally in the stock markets brings in its wake a bucketful of NFOs, while a sustained decline results in a scaling down of the same.

This time around though, fund houses are seemingly not enthused by the phenomenal market rally over the past one year. Between 1 January 2009 and 31 December 2009, the Sensex shot up by over 76%. Despite this, the well of NFOs has virtually gone dry. Since the beginning of calendar year 2010, only three NFOs have come out into the markets. Over February this year, not a single NFO has been launched by any of the fund houses.

This is in sharp contrast to 2003 when the Sensex rallied 72%. Fund houses responded in style—they rubbed their hands with glee and presented 19 NFOs before investors in the subsequent year. This was followed by a record 37 NFOs in 2005 after the markets had carried on their momentum into the subsequent year. Similarly, when the index shot up 46% in 2007, fund houses dumped another bagful of NFOs (21 in all) in the subsequent year.

It is therefore surprising to see how the huge rally of last year has failed to bring about a glut of NFOs this time around. The only probable explanation could be the current travails facing the mutual fund industry as a consequence of the changes introduced by the Securities and Exchange Board of India (SEBI) last year. Is this phenomenon a direct fallout of the agenda unleashed by SEBI to impose a new regime for the industry? If fund houses continue to remain silent while the markets chart new highs, this situation would be unique. 

User

COMMENTS

balaji v

7 years ago

abolition of entry loads (and hence distributor commissions) leading to lack of channel support coupled with SEBI insisting that fund houses need to explain how a new scheme is different from the existing schemes already available with them would probably have dampened NFO

A K Sanghvi

7 years ago

NFO are stopped not because of market down or sentiment down but becasue of mutual fund advisor not getting 6% commission which they were before 1st of august when mr,bhave stoped this wrong parctise.

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