Mutual Funds
SBI Mutual Fund plans global emerging market fund

This open-ended fund of funds will invest in emerging market funds like Amundi, which has given good return over the past one year. But the long-term story is not encouraging

SBI Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch SBI Global Emerging Market Fund, an open-ended fund of funds. The primary investment objective of the scheme is to seek capital appreciation by investing predominantly in Emerging Market equity funds like Amundi Funds Emerging Internal Demand. The scheme may also invest a certain portion of its corpus in money market securities in India, in order to meet liquidity requirements from time to time. The new fund offer price is Rs10 per unit.

The scheme would invest 80% to 100% of assets in units/securities issued by overseas mutual funds investing in emerging market equity, with a medium- to high-risk profile. Up to 20% of assets will be invested in domestic debt and money market instruments with a low-risk profile, and up to 20% of assets in listed equity securities of emerging market countries with a medium- to high-risk profile.

Investors will have the choice of growth or dividend (payout) options.

The objective of Amundi Funds Emerging Internal Demand is to achieve long-term capital appreciation by investing at least two-thirds of the assets in equities and equity-linked instruments of companies in developing countries. Such investments can be made through P-Notes, in case of limited access to a stock market, or for the purpose of efficient portfolio management. The scheme performance will be benchmarked against the MSCI EM Index.

The one-year and three-year return of Amundi Funds Emerging Internal Demand is 19.90% and 3.14%, respectively. The return since inception is 0.80%. On the other hand, the one-year and three-year return of MSCI EM (emerging markets) is 21.44% and 3.02%, respectively, while its return since inception is 0.57%.

The entry load is nil, whereas a 1% exit load will be charged for exiting within a year from the date of allotment. The total recurring expense would be 2.5% per annum and the minimum application amount on the regular plan is Rs10,000 and in multiples of Rs1, thereafter.

The fund manager of the scheme is Anup Upadhyay, who has been with SBI Mutual Fund for the past four years. He has been an equity analyst in the technology, telecom and education sectors with SBI Mutual Fund since May 2007. He previously worked with Tata Consultancy Services for a year. 


Daiwa to launch equity fund

The timing is right, as the market is not that expensive

Daiwa Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) seeking approval to launch Daiwa Equity Fund, an open-ended equity scheme. The investment objective of the scheme is to generate long-term capital growth by investing in a diversified portfolio of predominantly equity and equity-related securities.

The scheme proposes to invest 65% to 100% of the assets in equities and equity-related securities and up to 35% of assets would be invested in equity and equity-related instruments with a high-risk profile and up to 35% of assets in debt and money market instruments with a low- to medium-risk profile.

Under normal market conditions, the scheme would invest predominantly in a diversified portfolio constituting equity and equity-related instruments of companies which the fund manager believes have sustainable business models, and the potential for income and capital appreciation. The scheme may also invest in debt and money market instruments in a manner consistent with the investment objective. The benchmark for the scheme is BSE-200 index.

David Pezarkar is the fund manager of the scheme. His previous assignment was with Bajaj Allianz Life Insurance as head of equity. He has also been associated with SBI Funds Management and UTI Mutual Fund. The total recurring expense would be 2.50% per annum on the average net daily assets. This is a good time to launch a fund as the market is not expensive.


MCX-SX may claim up to Rs500 crore in costs, damages from NSE

The claims from MCX-SX could be estimated at about Rs450-Rs500 crore, including about Rs150 crore of losses suffered by the exchange in currency derivatives business due to NSE’s predatory pricing

New Delhi: Armed with a favourable anti-competition ruling against the National Stock Exchange (NSE), MCX Stock Exchange (MCX-SX) is planning to claim an estimated Rs400-Rs500 crore for costs and damages suffered by it due to its larger rival's ‘predatory’ practices, reports PTI.

The Competition Commission of India (CCI) has imposed a penalty of Rs55.5 crore on NSE after finding the bourse guilty of abusing its dominant market position.The order followed a month-long CCI probe into the matter, which had begun after a complaint from MCX-SX.

Reacting on the CCI order, Neralla Neralla, Co-Founder, Financial Technologies India Ltd (FTIL), said, "This (the CCI) order vindicates our claim that there have been anti-competitive practices by this private monopoly. We are happy that CCI has directed NSE to allow its members free choice to select our software or any other software for use in the Currency Segment of NSE. With this, we hope that over 500,000 API clients and 100,000 license holders of FTIL's ODIN trading software will be able to trade in NSE's currency segment. We would now be consulting our legal counsel for our next course of action."

MCX-SX’s CEO and MD Joseph Massey said that the exchange would claim compensation, but did not quantify its losses or damages.

However, the sources said that the claims from MCX-SX could be estimated at about Rs450-Rs500 crore, including about Rs150 crore of losses suffered by the exchange in currency derivatives business due to NSE’s predatory pricing.

Besides the business loss of about Rs150 crore, MCX-SX would claim damages and losses for opportunity costs, legal costs and other matters from NSE, sources said.

These claims would be independent of the Rs55.5 crore penalty imposed by CCI, for which a demand notice has already been issued by the commission along with the penalty order.

“Our next course will be to claim compensation for the losses and damages that we have incurred till now due to predatory pricing,” Mr Massey said.

The CCI order, passed last evening and uploaded by its website this afternoon, said that NSE was found to have abused its dominant market position through unfair pricing of services.

Welcoming the order, Mr Massey said that the order would “safeguard new entrants and ensure innovators are not decimated by existing entities which have deep pockets and are more powerful.”

“CCI penalising NSE and holding it guilty of anti-competitive and predatory practices vindicate our long-standing belief that monopolistic practices, especially those monopolies controlled by foreign and private entities, restrict fair competition and constrict innovation in any industry.

“This only leads to non-inclusive development of the market and is detrimental to the interests of common investors and consumers,” he added.

The CCI said that its probe found “a clear intention on the part of NSE to eliminate competitors in the relevant market (currency derivatives—CD).”

It also said that NSE intended to acquire a dominant position in the CD segment by cross subsidising this segment of business from the other segments where it enjoyed virtual monopoly.

“It also camouflaged its intentions by not maintaining separate accounts for the CD segments. NSE created a facade of the nascency of market for not charging any fees on account of transactions in the CD segment.

“The competitors with small pockets would be thrown out of the market as they follow the zero transaction cost method adopted by NSE and therefore in the long run they will incur huge losses.

“The past conduct of NSE and the conduct in the CD segment shows a longing for dominance in any segments in which the NSE operated by dominating its competitors,” CCI said in its 170-page order.

The exchange was asked by the CCI to immediately cease and desist from unfair pricing, exclusionary conduct and unfairly using its dominant position in other markets to protect the relevant CD market.

Besides, NSE was also asked to maintain separate accounts for each segment from next financial year and modify its zero price policy in the CD market and levy appropriate transaction costs within 60 days.



Shibaji Dash

6 years ago

So, going by the media reports NSE the Regulator of sorts fudged its accounts to conceal cross subsidization of currency derivatives market to perpetrate unfair trade practices ! The protestations of Moneylife ( Sucheta Dalal) stands vindicated. Rs. 50/- crores is the price of arrogance for the time being. Mr. Narayanan may kindly read Barbara Touchman's peerless work on arrogance of power - The March of Folly.

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