Personal finance Friday

QInvest and Ambit launch largest Sharia’a Compliant India Fund; Deutsche MF unveils Fixed Term Fund–Series 77; Reliance MF introduces Fixed Horizon Fund–XVI–Series 6; SBI Mutual Fund floats 90 days plan

QInvest and Ambit launch largest Sharia’a Compliant India Fund

Qatar’s investment bank, QInvest in collaboration with India’s financial services partner, Ambit, has launched Ambit Qinvest India Fund, an open-ended Sharia’a compliant Indian equity fund.

The fund is the India’s largest Sharia’a compliant equity fund with an investment strategy that will combine dynamic equity allocation to generate returns.

The fund offers an attractive entry point for investors to leverage the potential for long term price appreciation underpinned by strong growth drivers in the Indian market. Qinvest conviction in this project and the Indian market is further demonstrated by seeding capital into the product.

QInvest’s CEO, Shahzad Shahbaz, said: “The Indian equity market provides investors with a highly attractive opportunity to invest in a diversified range of Sharia’a compliant equities. The market capitalisation of Sharia’a compliant companies within the Nifty, stock market index is nearly 60%.”

“The Sharia’a compliant strategy’s performance in the last three months, since inception, is 10.4%” Shahbaz added.

“Key Sharia’a compliant growth sectors in the Indian economy are likely to witness significant activity including power, roads, automotive, pharmaceutical and consumer staple and non-staple products,” said Andrew Holland, Equities CEO at India’s Ambit Capital.

Deutsche MF unveils Fixed Term Fund–Series 77

Deutsche Mutual Fund has launched DWS Fixed Term Fund–Series 77, a close-ended income fund.

The objective of the Fund is to generate regular income by investing in debt and money market instruments maturing on or before the date of the maturity of the scheme.

The scheme offers dividend (payout) and growth option. The new issue opens on 10th December and closes on 13th December. The exit load is nil. The minimum investment amount is Rs5,000.

CRISIL Short Term Bond Index is the benchmark index. Avnish Jain is the fund manager.

Reliance MF introduces Fixed Horizon Fund–XVI–Series 6

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund–XVI–Series 6, a close-ended income scheme.

The primary investment objective of the scheme is to generate regular returns and growth of capital by investing in central and state government securities and other fixed income/debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility. The tenor is 368 days from the date of allotment.

The scheme offers dividend (payout) and growth option. The new issue opens on 10th December and closes on 14th December. The exit load is nil. The minimum investment amount is Rs5,000.

CRISIL Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.

SBI Mutual Fund floats 90 days plan

SBI Mutual Fund floats SBI Debt Fund Series–90 Days–36, a close-ended income scheme.

The investment objective of the scheme is to provide regular income, liquidity and returns to the investors through investments in a portfolio comprising of debt instruments such as government securities, PSU & corporate bonds and money market instruments maturing on or before the maturity of the scheme.

The new issue opens on 10th December and closes on 14th December. The minimum investment amount is Rs5,000.

CRISIL Liquid Fund Index is the benchmark index. Rajeev Radhakrishnan is the fund manager.


FDI into developing countries to rise 17% in 2010: World Bank

New Delhi: Foreign direct investment (FDI) flows into developing countries including India, is expected to recover over the next couple of years and is projected to increase by 17% in 2010, reports PTI quoting a World Bank report.

The report—World Investment and Political Risk—which was launched by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) said the net FDI inflows into the developing countries is projected to touch $416 billion in 2010, up from its 2009 level of $354 billion.

Overall, FDI inflows to the developing world continues to be “overwhelmingly” concentrated in middle-income countries, with Brazil, the Russian Federation, India, and China (BRIC) alone absorbing about half, the report said.

Net private flows (which include FDI and portfolio equity flows, as well as debt from private creditors) are projected to rebound in 2010 and 2011, but to remain substantially lower than their $1.2 trillion peak in 2007.

FDI prospects appear brighter for developing countries in 2010 and beyond; their economic performance is expected to outpace that of high-income economies as their domestic demand is buoyant, the report said.

“This upsurge in FDI into developing countries is welcome news, especially considering last year's drop,” MIGA executive vice president Izumi Kobayashi said.

FDI into developing countries declined by 40% last year.

Mr Kobayashi noted that “FDI flows directed to productive assets can spur economic growth and reduce poverty.”

FDI can help generate and sustain economic growth and development by providing much-needed financial resources, technology transfer, managerial expertise, and connections to the global economy, the report said.

“Economic growth is critical for all of us around the globe but it is even more so for underserved markets—those economies that have been struggling under the very heavy burden of conflict and instability,” Mr Kobayashi added.

The MIGA report said executives from multinational companies across the world believe that despite the various problems being faced by the developing world, such as lack of finance and quality of infrastructure, the biggest worry is “political risk”.

The top worry of multinational executives when operating in developing countries over the next three years is political risk, and a fifth of the investors surveyed use political risk insurance to mitigate this risk.

The report, which also focuses on FDI into conflict affected and fragile economies, said investors there are mainly concerned about adverse government intervention rather than overt political violence as adverse changes are often responsible for losses in these destinations.


Brand replay: Once-popular names re-work plans to make a comeback

Encouraged by the positive growth indicators in India, foreign brands as well as some domestic names which were laid low in the past couple of years, are looking to jump back on the store shelves

A host of well known brands that were either struggling to get a foothold in India, or were lying low following the global financial crisis, are now trying to re-launch their products using the organised retail platform.

Among these names are Italian apparel maker Grotto SpA's GAS, another Italian sportswear label Energie, UK's shoes stylist Clarks, and once-popular household goods products by Kelvinator, Akai, Maharaja Whiteline and even Weston.

Each of these names had slipped back for different reasons. "Many of them put up stand-alone stores and chose unsuitable partners," explains Jagdeep Kapur, chairman, Samsika Marketing Consultants. "Some of them priced their products inconveniently, and were struck badly during the slowdown. While some exited, others had to re-position themselves."

Today, the situation has changed. Business is looking good over the past few quarters and urban markets once again promise better growth. "India is one of the fastest growing markets and a growing branded market. There is no doubt it merits a second look by these companies," Mr Kapur said. So, quite a few companies are looking to make a comeback to capitalise on this situation.

Recently, Grotto SpA announced its re-entry through a fully-owned subsidiary Gas Jeans Private Ltd. It had exited after winding down a three-year-old partnership with Raymond Ltd. Italian super premium jeans brand Energie is being re-launched soon by Bangalore-based Arvind Lifestyle. C&J Clark International-the official suppliers of shoes to the British royal family-has returned through a joint venture with the Future Group, after stepping out of a tie-up with a distribution partner on the first attempt.

One analyst explained the strategy for these re-launches: "These brands will not go for standalone stores, but will look for shops within malls and big retail outlets, because these have higher footfalls. But it is unlikely that they would go for price-cuts and dilute their brand value."

It's quite a different ball game for some consumer durable players. Some 'old' brands like Electrolux, Kelvinator, Oscar, Maharaja Whiteline and even Japanese Akai, were were once household names, till giants like LG, Samsung and Sony pushed ahead.  Now they are banking on affordability, pricing their products much lower than their international peers.

"These brands are targeting shoppers in tier-II and tier-III towns, and so their aim is to make available quality products at a lower price. They are encouraged by the performance of the rural sector, where demand and sales of consumer durables have gone up," said a marketing executive of Videocon, which is re-launching Kelvinator.

Brands like Sonodyne and Weston are partnering with Croma and eZone to market their products. Most of them are also expanding their product range to woo customers back. For example, Akai, known for its video and audio equipment, is adding microwave ovens. Another is Maharaja Whiteline; its mixers and juicers have been popular and now it plans to also make geysers and gas stoves.

The inspiration for this comeback, one analyst pointed out, may have come from the mobile phone sector, where a low-price brand like Micromax has taken on the world's number one phone maker Nokia with some innovative features.

Hardly any one will commit on whether lower prices will revive the nostalgia for these once widely-bought brands. "It will turn out to be profitable for brands like Kelvinator, which always enjoyed a strong image. When strong brands make a comeback they are received well," Mr Kapur said. "But others who may have diluted their image will have to work harder to rebuild the image and re-establish themselves. For them it will be a tough fight." 


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