The indices closed above yesterday’s high today. The downtrend has been arrested for now but a strong uptrend looks doubtful
SEBI is looking into contradictory statements about stake sale in Kingfisher to foreign airlines and private equity players and also about United Spirits selling stake to UK's Diageo
New Delhi: Following requests from bourses National Stock Exchange (NSE) and BSE, market regulator Securities and Exchange Board of India (SEBI) is investigating the affairs of some Vijay Mallya-controlled UB Group companies for alleged non-compliance with disclosure norms, reports PTI.
The stock exchanges have raised various concerns mainly about two UB Group units -- Kingfisher Airlines and United Spirits -- for not providing required disclosures and not adhering to deadline regarding finacial results and the Annual General Meeting.
Officials said that SEBI has started investigations into the issues related to Kingfisher and United Spirits Ltd (USL) following requests from the two bourses. The regulator has got information and is in the process of gathering more details, they added.
"SEBI will also look into contradictory statements made about stake sale in Kingfisher to foreign airlines and private equity players. The regulator may seek related information from the lenders also," a senior regulatory official said.
The regulator is also looking at reports about United Spirits selling stake to UK's Diageo Plc, the official added.
When contacted, UB Group spokesperson said that SEBI has sent a set of queries to United Spirits related to an announcement with Diageo Plc.
"The movement in share prices of our group companies has been largely influenced by the wide speculation by the media with no comments from us.
"SEBI has written to USL with a set of queries following a joint announcement with Diageo Plc on 25th September. We have provided the information," an UB Group spokesperson said.
Late last month, Vijay Mallya had said that Kingfisher was in talks with foreign airlines for possible stake sale. However, according to lenders, the domestic carrier was in discussions with private equity players.
Investors of Fidelity Mutual Fund will be given a 30-day window from 15 October to redeem their holding without any exit load. With a relatively new fund management team of L&T Mutual Fund and the lack of a consistent performance track record, investors of Fidelity Mutual Fund schemes should use this opportunity to exit
In March this year, L&T Mutual fund bought Fidelity Mutual Fund and as per the Securities and Exchange Board of India guidelines (SEBI), the acquired fund house would have to give investors a month’s period to redeem their investments without any fee if they do not wish to continue with the new fund management. Unfortunately for the investors of Fidelity, the buyout of Fidelity's assets did not include the transfer of its experienced fund management team. Though critical segments like risk management and processes will be manned by the Fidelity team, the lack of an experienced fund management team may affect the future performance of the schemes.
L&T Mutual Fund which entered the mutual fund industry after the acquisition of DBS Cholamandalam in 2010 had a naïve fund management team. It has been on the lookout for hiring experienced mutual fund managers to handle the large asset base and just recently it ahs been able to strengthen its fund management team. The fund house recently hired Soumendra Nath Lahiri and Shriram Ramanathan as heads of equities and fixed income, respectively.
Before the acquisition, L&T MF had hired Venugopal Manghat as vice-president & co head-equity investments. He has worked for more than 16 years with Tata Asset Management. As head of equities, he was the fund manager of Tata Pure Equity and Tata Equity Opportunities—two equity funds of Tata MF which have done well in the past.
Soumendra Nath Lahiri joined as head of equities, with effect from 24 September 2012. With 17 years of experience in equity investments and research. Mr Lahri was the head of equities at Canara Robeco Asset Management Company and had a prior stint at DSP BlackRock, as well. Mr Ramanathan joined as the head of investment for fixed income, with effect from 7 August 2012. Mr Ramanathan was portfolio manager- fixed income at Fidelity Worldwide Investments India.
How has been the performance of L&T mutual fund schemes?
We took the average of the quarterly returns of the schemes from 1 March 2010 to 30 September 2012. Compared to their benchmarks the schemes of Fidelity have performed much better. All the schemes of Fidelity MF outperformed their respective benchmarks over the period. The only schemes of L&T that did better than the benchmark were L&T Growth and L&T Midcap. L&T MF has a contra scheme which has failed to perform. Another scheme L&T Hedged Equity which aims to minimise risk by using hedging instruments such as index and stock derivative instruments to generate returns with lower volatility, however, failed to deliver returns sufficient to outperform the benchmark. L&T Opportunities, a multi-cap scheme, has failed to deliver as well. Even over the last quarter (June-Sept 2012) only L&T Midcap was able to outperform the benchmark. Fidelity MF kept up with its performance with three of its four schemes outperforming the benchmark over the same period.
The new fund management has still not got enough time to settle in. Therefore whether the performance of the existing Fidelity schemes will continue their outperformance, it is hard to judge. Handling a huge fund corpus is not an easy job. Given the opportunity to exit without any cost, investors can use this opportunity to invest in other better performing schemes with a stable fund management.
Effective from 16 November 2012 they will be many changes to the fundamental attributes of a few of Fidelity schemes and there will be some schemes that will be merged with other L&T schemes. We have mentioned the changes below scheme-wise. There could be some good reasons why you should consider redeeming your investments while you have the chance.