Petrol prices may be slashed by Rs2 per litre from Wednesday

“Gasoline averaged $115.8 per barrel in November against the $121 per barrel price at the time of the Rs1.80 per litre hike in petrol price. Also, the rupee has averaged Rs49.20 per US dollar, which is less than the October average,” a senior official in one of the three state-run oil marketing companies said

New Delhi: Petrol prices in India may be cut by Rs2 a litre from Wednesday as global oil rates have softened and the rupee has stabilised against the US dollar, reports PTI.

The cut in prices would negate the Rs1.80 per litre petrol price hike effected earlier this month.

“Gasoline (petrol) averaged $115.8 per barrel in November against the $121 per barrel price taken at the time of the Rs1.80 per litre hike in petrol price. Also, the rupee has averaged Rs49.20 per US dollar, which is less than the October average,” a senior official in one of the three state-run oil marketing companies said.

“The reduction in oil price warrants a cut of Rs1.86 per litre in the petrol price, excluding all taxes,” he said, adding that retail prices may go down by about Rs2 per litre.

State-owned oil firms had on 3rd November hiked petrol prices by Rs1.80 per litre, the fourth increase this year, as the rupee fell from 46.29 a dollar to Rs 49.40 a dollar.

At the time of the price hike, they had stated that petrol prices would be reduced if the rupee does not depreciate further and international oil prices fall.

“Gasoline price are today lower than even crude oil price. But today, the rupee has touched a 32-month low of Rs50.45 to a dollar. At the end of today, we will take an average for the fortnight and revise petrol rates,” the official said.

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Kingfisher Airlines Q2 loss widens to Rs468.66 crore

Bankers have made it clear that Kingfisher’s promoters will have to infuse Rs800 crore worth of fresh equity into the company if they are to consider a second restructuring of existing debt, even as opposition mounted to any bailout of the private carrier

Mumbai: Debt-ridden Kingfisher Airlines today reported that its net loss doubled to Rs468.66 crore in the quarter ended 30 September 2011 from Rs230.81 crore in the same period last year, as higher fuel prices depressed operating margins, reports PTI.

The company’s income from operations, however, rose by 10.5% to Rs1,528.16 crore in the July-September quarter from Rs1,382.72 crore in the year earlier period.

Bankers have made it clear that Kingfisher’s promoters will have to infuse Rs800 crore worth of fresh equity into the company if they are to consider a second restructuring of existing debt, even as opposition mounted to any bailout of the private carrier.

The bankers have asked the troubled airline to come out with a ‘credible’ plan.

The lenders—a 13-bank consortium led by State Bank of India (SBI), who were yet to decide on ways to soften the troubled airline’s Rs7,057.08 crore debt burden—are due to meet Kingfisher management today.

Kingfisher had suffered a loss of Rs1,027 crore in 2010-11 and is estimated to have debt of over Rs7,000 crore.

The airline has cancelled several flights over the past few weeks.

Meanwhile, shares of the company were trading at Rs 21.65 apiece, up 1.41% from their previous close on the Bombay Stock Exchange at 11.30am today.

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IDBI Dynamic Bond Fund, a concept that looks good only on paper

The idea of dynamic bond funds has mostly proved to be good only on paper. We studied eight of them and their returns since inception do not seem great. Some of them have given returns as low as 3% since inception

IDBI Mutual Fund has filed offer document with SEBI to launch IDBI Dynamic Bond Fund, an open ended income fund. The NFO is priced at Rs10 per unit. The objective of the Scheme is to generate regular income while maintaining liquidity through active management of a portfolio comprising of debt and money market instruments.

A Dynamic Bond fund, as the name suggests, is designed to give the fund manager the flexibility to change the duration of the bond as and when needed.

Interest rates and bond prices are inversely related. When the interest rate is rising, bond prices fall and the fund manager should be able to decrease the duration of the bond; short-term bonds face a lower impact. In addition, when the interest rate is falling they should be able to increase the duration of the bond.

 The other flexibility is to move into cash and sit on the sidelines when the interest rate is rising sharply over different horizons. It is to offer the flexibility that dynamic bond funds were introduced. They will dynamically move from a fully invested situation to a fully cash position and various stages in between, depending on the fund manager’s reading of the interest rate situation. One of the most difficult things to predict.

Not surprisingly, the idea of dynamic bond funds has by and large proved to be good only on paper. We studied eight of them and their returns since inception do not seem great. Some of them have given returns as low as 3% since inception. Birla Sun Life Dynamic Bond Fund - Ret gave a return of 8% and Tata Dynamic Bond Fund fetched a return of 5 %. Among the others are Taurus Dynamic Income Fund (7%), UTI Dynamic Bond Fund (7%), Canara Robeco Dynamic Bond Fund - Retail (5%), Axis Dynamic Bond Fund and SBI Dynamic Bond Fund whose return is 3% each is the worst among the lot.

(SBI Dynamic Bond Fund was launched in February 2004 and Axis Dynamic Bond was launched in April 2011)

IDBI Dynamic Bond Fund  will invest 100% in debt instruments (including fixed/floating rate debt instruments, government securities and securitized debt) with low to medium risk profile and invest up to 100% in money market instruments with low risk profile. Investment in securitised debt not to exceed up to 20% of the assets of the scheme.

Fund manager of IDBI Dynamic bond fund is Gautam Kaul.

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COMMENTS

madavachar

5 years ago

abt yu idbi

Narendra Doshi

5 years ago

The write up is very correct. For so many years NONE of the dynamic funds have ever given good returns and YET new funds with the same/similar mandate are approved for NFOs by other AMCs.
Is there NO statutory audit BEFORE for same/similar schemes await approval for NFOs?
Rules MUST ask the AMCs with existing schemes BEFORE approving NEW NFOs with similar logic. Existing AMCs must be questioned and ordered to RECTIFY within a specified time frame or else close the schemes, paying penalties. New AMCs must be made aware that if they do not meet the mandates they ALSO will have to quit & NO OTHER AMCs should be allowed without rigid performance monitoring and penalties for nonperformance.
The above SHOULD apply to ALL other NAMED schemes.

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