Personal finance Friday

IDFC Mutual Fund launches IDFC Fixed Maturity Plan Yearly Series 33; HDFC Mutual Fund launches HDFC FMP 370D September 2010 (1); IDBI Mutual Fund launches IDBI Nifty Junior Index Fund; Kotak Life Insurance launches two new ULIPs; Bajaj Allianz Life Insurance launches two new ULIPs; Central Bank of India offers MasterCard prepaid cards for CWG; Videocon d2h now offers maximum number of channels in the country

IDFC Mutual Fund launches IDFC Fixed Maturity Plan Yearly Series 33

IDFC Mutual Fund has launched IDFC Fixed Maturity Plan Yearly Series 33, a close-ended debt scheme. The scheme opens on 3 September 2010 and closes on 7 September 2010. The new fund offer (NFO) price for the scheme is Rs10 per unit. The minimum investment amount is Rs10,000. The exit load for the scheme is nil. The scheme offers two options-growth and dividend. The investment objective of the scheme is to generate income by investing in debt and money market instruments maturing on or before the maturity of the scheme.

HDFC Mutual Fund launches HDFC FMP 370D September 2010 (1)

HDFC Mutual Fund has launched HDFC FMP 370D September 2010 (1), a close-ended debt scheme. The scheme opened on 1 September 2010 and will close on 6 September 2010. The new fund offer (NFO) price for the scheme is Rs10 per unit. The minimum investment amount is Rs5,000. The investment objective of the plans under the scheme is to generate income through investments in debt/money market instruments and government securities maturing on or before the maturity date of the respective plans.

IDBI Mutual Fund launches IDBI Nifty Junior Index Fund

IDBI Mutual Fund has launched IDBI Nifty Junior Index Fund, an open-ended growth scheme. The scheme opened on 2 September 2010 and will close on 15 September 2010. The new fund offer (NFO) price for the scheme is Rs10 per unit. The minimum investment amount is Rs5,000. An exit load of 1% is applicable if the units are redeemed within one year from the date of allotment. The investment objective of the scheme is to invest in the stocks and equity related instruments comprising the CNX Nifty Junior Index in the same weights as these stocks represented in the Index with the intent to replicate the performance of the Total Returns Index of CNX Nifty Junior Index. The scheme will adopt a passive investment strategy and will seek to achieve the investment objective by minimising the tracking error between the CNX Nifty Junior index (Total Returns Index) and the scheme. The scheme offers two options-growth and dividend (payout and reinvestment). The benchmark index for the scheme is CNX Nifty Junior Index (Total Returns Index).

Kotak Life Insurance launches two new ULIPs

Kotak Life Insurance has launched two new unit linked insurance plans (ULIPs) - Kotak Secure Invest Insurance and Kotak Wealth Insurance. Secure Invest Insurance is an equity exposure plan and is backed by capital guarantees with in-built investment advice of the guarantee fund. It also helps the customer gain from market participation through the guarantee fund that aims at stable capital appreciation while limiting the downside risk in falling market conditions. Wealth Insurance is a complete package that provides investment growth along with comprehensive triple benefits in the event of death. Its power-packed range of eight fund options allows customers to balance their risk profile with the tenure their investments.

Bajaj Allianz Life Insurance launches two new ULIPs

Bajaj Allianz Life Insurance has launched two new unit-linked insurance plans (ULIPs) - Max Advantage and Wealth Insure. Max Advantage locks the highest net asset value (NAV) guarantee during the entire policy period of 10 years tracked on a daily basis through one of its funds Max Gain Fund II. The plan comes with new features such as refund of 60% of the total allocation charge at maturity as guaranteed addition and the option to select premium payment term of five to seven years at inception. Wealth Insure is a single premium endowment ULIP that provides a hassle-free way of investing money and taking care of insurance needs.

Central Bank of India offers MasterCard prepaid cards for CWG

Central Bank of India has been chosen as the exclusive official banking partner for the Commonwealth Games (CWG) 2010. Being the exclusive official banking partner, the bank is launching a range of prepaid cards products for the use of the visiting players/delegates as well as for the bank's existing customers during the CWG. The bank offers these prepaid card variants - Commonwealth cards (a general purpose reloadable card), gift card and travel card in USD. MasterCard, the global card major, is the preferred card partner in these prepaid variants by Central Bank of India. The bank will also offer a Titanium Combi Debit card which offers pin and signature capability on a single card - a first for Indian market.

Videocon d2h now offers maximum number of channels in the country

Direct-to-home service provider Videocon d2h is offering maximum numbers of channel and services in the country. Videocon d2h offers around 267 channels. It is providing 10 channels in Marathi, 19 channels in Tamil, 18 in Telugu, 14 in Malayalam, 13 in Kannada, 13 in Bengali, six in Oriya and seven in Punjabi. Videocon d2h is the foremost service provider to introduce exclusive music channels by launching Planet M music space. It has also introduced a new Active Bhakti music video channel and two regional devotional audio channels in Marathi and Bengali under its Active Music Space platform. Customers can now enjoy a unique music experience 24 hours a day with music of all genres.
 

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Volatility index dips to all-time low; the chances of a correction become higher

The NSE volatility index or India VIX slumped to its all-time low yesterday, indicating a large downside risk to the market

In a major indication that a significant market correction is imminent, the National Stock Exchange (NSE) volatility index ended at 16.15 yesterday - the lowest on a closing basis since its launch. The index also hit an intraday low of 15.13, a level it has not reached for well over a year now.

The NSE volatility index, known as India VIX, has been falling for some time now and is quoting at record lows. Experts believe that this reduced volatility could now be bottoming out, coinciding with an expected fall in the market. But can higher volatility not mean further rise in prices? In a bull market, rising volatility from extreme low levels is usually not associated with further rise but a decline.

Moneylife had first written about low volatility presaging a market decline on 7 August (see: http://demo.moneylife.in/article/72/8186.html) but the market has remained at the same level.

India VIX is a volatility index based on the Nifty 50 index option prices. From the best bid/ask prices of near term Nifty 50 options contracts, a volatility figure (%) is calculated, which indicates the expected market volatility over the next 30 calendar days. The index is a measure of the market's expectation of volatility over the near term.

Typically, lower volatility levels are a sign of investor complacency or high confidence levels among investors. Rising volatility implies greater degree of fear among investors. So while a low volatility index is a positive for the market, the perception this time around is that it is now bottoming out and won't sustain at these levels for long.

Vikas Khemani, executive VP and head - institutional equities at Edelweiss Capital believes that the time is ripe for a correction. "There seems to be some sort of complacency that there is very little risk in the market. Volatility has to go up from here. Typically, volatility always goes up when the market falls."

Ajay Parmar, head - institutional equities, Emkay Global Financial Services disagrees. He does not feel that low volatility is a sign of coming decline. "We are in a phase of consolidation now. The index is moving nowhere, which is being reflected in the volatility. I don't expect any big surprise on either side. From this level, I would expect volatility to move up a notch," he said.

Alex Mathews, head-research, Geojit BNP Paribas, feels it is too early to comment whether the VIX is bottoming out. "We have previous experience that VIX remains at lower levels for a long period during a secular bull market. During these periods we may not be able to see a sharp rally in the index, but it will remain in a tight range and selected stocks - especially small- and mid-cap - will show more strength."

Apart from the low volatility, other macro-level indicators also seem to suggest that a correction is on the cards. As Moneylife had reported earlier (see: http://www.moneylife.in/article/8496.html), the operating performance of BSE 100 companies in the June quarter was a disappointment for the markets. With a paltry 1% growth in operating profits, the performance of India Inc was contrary to the market's expectations.

Another indication of the impending fall in the markets is the huge open interest in equity futures at the NSE. The ratio of open interest in stock futures to Nifty futures at the exchange recently crossed 70:30, a level reminiscent of the pre- January 2008 period. The market had crashed in mid-January.

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COMMENTS

Er SS Hari

6 years ago

since now VIX has risen it has to come low for sustaining market upmove or market has to come down to respect VIX levels.VIX is inverse indicator but for market moves has to be read in conjuction with PCR values.too much rise in too small time that also in targeted shares in short term these nifty levels may not sustain

msbhash

6 years ago

This is not the correct reflection of the market.Heavy weights did not go up The real value of Nifty could have been around 5950. but for the big Daddy-Reliance- which did not perform well in the market. This scrip did not particpate in the present rally!!
This is the only scrip which can go up ;when there is an upmove in the reliance then only the market can enter a bull phase..For the past many days this has not happened hence there can be a reasonable corrrection and the nifty may go down to 5350 level to enable the big players to enter into this scrip who are waiting on sidelines.

ErSS Hari

6 years ago

additional comments:as IV is low hedging cost is very low a hedged market never falls.stock futures OI is high because of retail is also participating in futures.FIIs has invested so much they will not leave unless a further spike is there.money sitting on sidelines is not being given a chance.every small dip is picked up.only worry is money has started flowing to small caps and indian operators may spoil the show.JhunJhun always say up Shankar sharma Amreesh Bagga always say down.Reading VIX in isolation is a lagging indicator.more serious discussion on the subject is required.

ErSS Hari

6 years ago

only vix dot blogspot dot com does lot of study on volatility.seems big players want to keep indices stagnant and money is flowing to small caps forspeculative games..since big players are fully hedged they are not bothered about vix.. vix should go up.as market goes up fear goes up so the vix level indicating reversals at extreme levels.as now analysts used VIX and PCR levels to gauge market these tools are now made retundant by new generation strategists.pair long short strategy is being deployed money flowing to selected stocks and weak stocks hammered more.smartmoney is ready for a spike in market and then exit with basket selling.it is now understood euphoria due to retail participation will not come neithe LIC like cushions during emergency will work.reliance is sidelined tata motors is being boosted though nano is catching fir as shown on tv channels.market fire may come within two months exactly no body can predict..

REPLY

Er SS Hari

In Reply to ErSS Hari 6 years ago

There is practical discussion on VIX at invested central dot com few days back.Also at investopedia dot com by Dr.Johan Suma.Their crux is it is inverse indicator to price and any divergence therein next is caution note.Yes at extreme low level and extreme high level it gives reversal sign.Practical tip is if price is down but VIX up big upside move expected as insiders build up long call option positions by paying high premium.

Govt may allot some coal blocks in 'no-go' areas for UMPPs

New Delhi: The government today said that some of the coal blocks lying in the "no-go" areas, which could not be used for mining, may be shifted to the go-areas, a move to expedite clearance for ultra mega power projects (UMPPs), reports PTI.

Ministry of environment and forests has classified certain coal blocks as no-go areas i.e. the areas, where there is a dense cover of forests and mining cannot be done.

"We are working on them...some (coal blocks) could be accommodated through boundary adjustment... some could go from no-go to go areas," power secretary P Uma Shankar told reporters here.

"We will keep environment concerns in mind and manage both (capacity addition and environment) for the development of the power sector," Mr Shankar said.

The ministry of power has further extended the date of submission of initials bids for the Chhattisgarh ultra mega power project, as the coal mines allotted for the project fall under the no-go area and await environment clearance.

Coal block allocated for a similar project in Orissa is also awaiting environment clearance.

The power ministry plans to add a substantial amount of electricity generation capacity from these projects in the Twelfth Five Year Plan Period (2012-17).

Delay in the bidding process of these projects could derail the ministry's mega capacity addition plans.

He added, not only power projects, captive projects for steel...they could also have difficulty.

As many as 18 coal blocks are awaiting environment clearance.

Meanwhile, coal minister Sriprakash Jaiswal had earlier said that the companies, which have made significant investments in blocks, which were declared in no-go areas could be given priority.

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