As per the NSE data, the daily average trading values in gold ETF have increased by over 400% from a daily average of Rs18 crore in April to Rs92 crore in September 2011
New Delhi: The investors interest seems to be growing fast in gold ETFs (Exchange Traded Funds), as the average daily value of their trade on the National Stock Exchange (NSE) has grown by over four times since the beginning of this fiscal, reports PTI.
The gold ETFs enable investment in the precious metal on the stock exchange platform in an electronic mode and without its purchase in physical form.
As per the NSE data, the daily average trading values in gold ETF have increased by over 400% from a daily average of Rs18 crore in April to Rs92 crore in September 2011.
The daily average number of trades has also increased by 300% during this period, from 5,891 average daily trades in April to 23,874 last month.
The gold ETFs track the gold prices and each unit of these ETFs is generally equivalent to one gram of gold.
While the global markets have been in a turmoil over the past one year, and asset classes like stocks giving huge negative returns, the gold prices have rallied smartly.
Tracking the soaring gold prices, the gold ETFs have appreciated by over 30% over the past one year, although the prices have fallen somewhat in past one month.
As the investor interest in the gold grows in the run-up to Dhanteras and Diwali festivals, when it is considered auspicious to invest in gold and other valuable assets, the experts expect the gold ETF trade volumes to rise further in the coming days.
Diwali will be celebrated on 26th October, while Dhanteras falls two days before that.
To cash on the festive demand, the NSE has also begun a new media campaign to spread the word about the gold ETFs being a ‘smart way to buy gold’.
Traditionally, Indians have been investing in gold on auspicious days like Akshaya tritiya, Dhanteras and Diwali.
On the day of Akshaya Tritiya on 6th May this year, the NSE recorded a record trade of 20 lakh units of gold ETFs worth Rs423 crore.
A total of 11 gold ETFs are listed on the NSE and their monthly trading value has grown to Rs1,936 crore as on September 2011, as against Rs356 crore in January this year.
The total assets under management in gold ETFs have more than doubled in the past one year, while it has grown by over five-times in two years.
As per the latest available data, the total assets of the gold ETFs stood at Rs6,119 crore at the end of July 2011.
The number of investor accounts for gold ETFs has also grown to nearly four lakh, from little over one lakh accounts in September 2009.
“In the month of October, the Indian market has seen an upward movement, so FIIs (foreign institutional investors) invested in the market. In the last two months, overseas investors were pouring money in the gold,” BNP Paribas Alex Mathew said
Mumbai: After massively pulling out in the last two months, foreign funds have turned bullish and infused a hefty Rs950 crore in just a fortnight in Indian markets, reports PTI.
During 3rd to 14th October, overseas investors have purchased equity and debt securities worth a gross amount of Rs36,590 crore and sold securities valued Rs35,640.50 crore. This translated into a net inflow of Rs950 crore, according to data available with the Securities and Exchange Board of India (SEBI).
“In the month of October, the Indian market has seen an upward movement, so FIIs (foreign institutional investors) invested in the market. In the last two months, overseas investors were pouring money in the gold,” BNP Paribas Alex Mathew said.
He further said, “Over the coming months, FIIs will continue to infuse capital in the BRIC countries.”
Meanwhile, the 30-share Sensex grew by nearly 4% or 629 points so far in October. In the last trading session, the key index on BSE finished at 17,082.69, up 199 points from its previous close.
In August and September, FIIs have witnessed an outflow. In August, foreign funds pulled out nearly Rs8,000 crore, or $1.8 billion, from the Indian stock and debt markets—the highest monthly withdrawal since October 2008. Last month, they withdrew Rs1,866 crore.
Market analysts believe heavy selling by FIIs was triggered by ongoing debt crisis in the Eurozone and weakness in the US economy.
In October, FIIs are bullish on the debt market and poured in Rs1,707 crore, while they pulled out Rs757 crore from the equity market in the same period.
So far this year, FIIs have pumped in Rs18,614.20 crore into stock and bond markets, compared to about Rs1,79,674 crore in the whole of 2010.
The number of FIIs registered with SEBI stood at 1,751 as of October this year.
“The decline in forecast is entirely because of scaling down for the industrial sector,” CMIE said in its monthly review, adding that expected 7.9% growth would be lower than the 8.5% growth recorded in FY10-11
Mumbai: The Centre for Monitoring Indian Economy (CMIE) has revised the economic growth forecast for the current year downwards to 7.9% from the earlier 8%; which is above the majority view of 7.5%, reports PTI.
“The decline in forecast is entirely because of scaling down for the industrial sector,” CMIE said in its monthly review, adding that expected 7.9% growth would be lower than the 8.5% growth recorded in FY10-11.
The decline would be attributed to a sharp fall in the growth in agriculture-from a rather high 6.6% to 2.9%—and the fall in the growth in industry from 7.9% to 7.5%, the report said.
The Mumbai-based think tank said the industrial sector is expected to slow to 7.5%, lower than earlier forecast of 7.8%. Similarly, the manufacturing sector will grow by 7.5% as against earlier estimate of 8%, and growth forecast for mining sector has been revised from 4.8% to 4.4%.
The decline in the growth expectation of manufacturing sector emanates from sharper-than-expected decline in growth in IIP (Index of Industrial Production) in July and an expectation that the August IIP would also be weak, it said.
“We do expect a recovery in the second half of the year.
However, the slower than expected growth in the first five months warranted the revision in forecast,” the report said.
The agency expected a 2.9% increase in the agricultural sector. The rainfall till September was good and the precipitation was 2% above the long period average.
Kharif sowing was 3.1% higher than previous season.
Of the earlier indicators of the services sector, the movement of freight on the Indian Railways during the first five months was higher by 6.1%, compared to 2.3% in the corresponding period a year ago. Cargo on the major ports was up by 4.5% against 0.6%.
“We expect the service sector to grow by 9.4% in FY11-12. This is the same level of growth as in FY10-11. While we expect the growth in trade, transport, hotels, storage and communication to accelerate, we expect the financial sector to see a fall in the growth rate,” report said.