Personal finance Friday

Birla Sun Life files offer document with SEBI to launch Birla Sun Life Gold ETF; JM Financial Mutual Fund files offer document with SEBI to float JM Fixed Maturity Fund-Series XIX; Canara Robeco MF files offer document with SEBI to introduce Canara Suraksha Fund-Series 1; IDFC Mutual Fund files offer document with SEBI to introduce IDFC Small Cap Equity Fund; NSE, BSE to launch pre-trading call auction

Birla Sun Life files offer document with SEBI to launch Birla Sun Life Gold ETF
 
Birla Sun Life has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch Birla Sun Life Gold ETF, an open-ended gold exchange traded fund.

The investment objective of the Scheme will be to generate returns that will be in line with the performance of gold, subject to tracking error. The Scheme will invest 90%-100% in physical gold and may also invest up to 10% in debt and money-market instruments (including cash and cash equivalent).

Each unit of Birla Sun Life Gold ETF shall be issued at a premium equivalent to the difference between the allotment price and the face value of Rs10 each. Each unit will be approximately equal to one gram of gold.

The minimum investment amount will be Rs6,000 and in multiples of Rs2,000 thereafter per application. The minimum target amount will be Rs10 crore. The Scheme will have no load. Domestic price of physical gold will be the benchmark index. Satyabrata Mohanty will be the fund manager.

JM Financial Mutual Fund files offer document with SEBI to float JM Fixed Maturity Fund-Series XIX

JM Financial Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch JM Fixed Maturity Fund-Series XIX, a close-ended income fund offering fixed maturity plans. The new fund offer (NFO) price will be Rs10 per unit.

The investment objective of the Scheme will be to generate regular returns through investments in fixed-income securities maturing on or before the date of the maturity of the Scheme. The Scheme will offer a regular plan. The plans under the Scheme offer growth and dividend (payout) option.

Minimum investment amount will be Rs5,000 only in the regular plan for each option. The fund seeks to raise a minimum subscription amount of Rs1 crore under each of the plans. The load for the Scheme will be nil.

For 3 months and 12 months plan, the Scheme will invest up to 100% in debt and money-market securities. Allocation in securitised debt securities will not, normally exceed 80% of the net assets of the respective plans. Securitised debt will not include foreign securitised debt.

For 18 months plan, the Scheme may invest 15%-100% in medium term debt securities (including fixed-income derivatives and securitised debt). Allocation in securitised debt securities will not, normally exceed 80% of the net assets of the respective plans. Securitised debt will not include foreign securitised debt. The plan may also invest up to 85% in government securities and money-market instruments.
CRISIL Short Term Bond Index will be the benchmark index for all the plans. Shalini Tibrewala will be the fund manager.

Canara Robeco MF files offer document with SEBI to introduce Canara Suraksha Fund-Series 1

Canara Robeco Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch Canara Suraksha Fund-Series 1, a close ended capital protection oriented fund. The new fund offer (NFO) price will be Rs10 per unit.

The investment objective of the Scheme will be to seek capital protection by investing in high quality fixed-income securities maturing in line with the tenure of the Scheme and seeking capital appreciation by investing in equity and equity related instruments. 

The Scheme will offer - growth and dividend (payout) options. The Scheme will have three plans - 24 Months Plan A; 30 Months Plan A; 36 Months Plan A. 
Minimum investment amount will be Rs5,000. Minimum target amount will be Rs1 crore for each plan. The load structure for the Scheme will be nil.

CRISIL MIP Blended Fund Index is the benchmark index. Ritesh Jain and Anand Shah will be the fund managers.

IDFC Mutual Fund files offer document with SEBI to introduce IDFC Small Cap Equity Fund

IDFC Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch IDFC Small Cap Equity Fund, an open ended equity fund. The new fund offer (NFO) price will be Rs10 per unit.
The investment objective of the Scheme will be to generate capital appreciation through investment in equity and equity related securities, primarily within the small-cap space, which offer potential for generating positive return over the long term.
The Scheme will offer growth and dividend options. The Scheme will invest 65%-100% in equities and equity related instruments. The Scheme will also invest up to 35% in debt and money-market instruments. Up to 65% allocation will be to small cap companies.
Minimum investment amount is Rs5000 and minimum target amount is Rs1 crore.
An exit load of 1% will be applicable if redeemed within 365 days from the date of allotment.
BSE Small Cap index is the benchmark index. Kenneth Andrade is the fund manager.

NSE, BSE to launch pre-trading call auction

National Stock Exchange and Bombay Stock Exchange will start the 15-minute pre-open session call auction from 18th October.

In July this year, capital market regulator Securities and Exchange Board of India had given its green signal for the introduction of pre-open session call auction on the bourses.

In a call auction practice, participants indicate their willingness to buy or sell units of a security by placing an order for a number of units at the prevailing price before the opening of trade.
 

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Pranab hopeful of keeping inflation down to 6% by fiscal end

Washington: Union finance minister Pranab Mukherjee is hopeful that the steps taken by the government and by the Reserve Bank of India (RBI) would bring inflation down to 6% by the end of this financial year, reports PTI.

"I do hope it would be possible for us to do and (that) we can end the financial year with an inflation rate of about 6%," Mr Mukherjee said yesterday. He was addressing an audience at the annual lecture series of the Woodrow Wilson Center and Federation of Indian Chamber of Commerce and Industry.

The finance minister expressed his concern over inflationary pressures on food items. "We have taken steps to improve the supply side by easing import of food items that are in short supply," he said. Mr Mukherjee is in Washington for the annual meeting of the International Monetary Fund and the World Bank.

On the demand side, the latest revision of (interest) rates has created a situation where a part of the excess liquidity would be mopped up by the RBI, he said. "...we are accepting the policy through which we can strike a balance so that the growth is not retarded, and at the same time inflationary pressure is being reduced," he said.
 

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Herd on the Street: Indiabulls Financial, Bhushan Steel, Sintex India

Indiabulls Finanical: The buzz seems to be around Anil Dhirubhai Ambani Group's buying 26% stake from Indiabulls Financial Services in the Indian Commodity Exchange, which was jointly founded by Indiabulls and trading giant MMTC. Since Indiabulls has said it will completely exit the exchange business by selling its entire 40% stake in ICX, the market hopes that the gains will be much more than anticipated. Late August, Indiabulls raised Rs12.8 billion through a QIP of non-convertible debentures and warrants.

The company is into consumer finance, housing finance, commercial loans, life insurance, asset management and advisory services. We had previously said that there were rumours of Indiabulls applying for a bank licence (http://www.moneylife.in/article/81/8153.html).

Mid-September, media reports suggested the company paid Rs250 million in advance taxes for the September quarter versus nothing y-o-y. This has led to speculation of a good result. Early September, Indiabulls came out with a special home loan scheme for the salaried class - 8.5% for a year. At the time CEO Gagan Banga had disclosed that the company has an annual target of Rs60 billion for new home loans disbursement and plans to grow its home loans business by 40%-45% in FY11 and increase its market share from the current 4% to 10%-15% by 2014.

Market talk indicates that investors expect another 15% upside from current levels. However, retail investors should be cautious since the stock has risen almost 20% in less than 10 days. FII holding in this stock has fallen from almost 48% in September 2009 to 36% in June 2010.

In the June quarter, Indiabulls Financial posted a revenue of Rs4 billion and a net profit of Rs1.3 billion (Rs3.6 billion and Rs835 million in the March quarter) and in FY10 its revenues were Rs14.2 billion and profit was Rs2.6 billion. Indiabulls Finanical had touched a high of Rs1,030 in December 2007.

Bhushan Steel: The stock has been rising right since June but has got an extra fillip after it made a cash takeover bid for Bowen Energy, an Australian coal and minerals exploration company. Media reports said that Bhushan Steel, through its Australian subsidiary Bhushan Steel Australia Pty Ltd, has been investing in Bowen Energy since 2007 and had acquired almost 60% stake in it. Another factor driving the stock is hopes of another round of price hikes by steel companies. Bhushan Steel recently increased prices of its value-added products by around Rs1,500 per tonne. Another story is its move from a cold rolled steelmaker into an integrated steel plant.

In the June quarter, Bhushan Steel posted a revenue of Rs13.7 billion and a net profit of Rs2 billion (Rs13 billion and Rs1.7 billion in the March quarter) and in FY10 its revenues were Rs56 billion and profit was Rs8.5 billion. Bhushan Steel is trading near its all-time high.

Sintex Industries: The stock is up more than 10% in seven days. In a September televised interview, Sunil Kanojia, group president at Sintex Industries had said that this year the monolithic business was going to be a big business for the company and expected to maintain margins at 18%-20%. He said the company expects to achieve a top-line of Rs43 billion-Rs44 billion and bottom-line growth of 30%-35%. Sintex's consolidated FY10 top-line was Rs33 billion and net profit was Rs3.3 billion. The June quarter top-line was Rs9 billion and net profit was Rs791 million (Rs6.6 billion, Rs 611 million). The main buzz has been around a 2:1 stock split for which the company has fixed 28 October 2010 as the record date. Sintex achieved an all-time high of Rs620 in January 2008.

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).
 

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