The Nifty has to break through today’s days range for further direction
On a marginally lower volume of 83.40 crore shares on the National Stock Exchange (NSE), the Nifty broke the trend of five days up move. The BSE 30-share Sensex opened in the positive at 20,046 and hit intra-day high of 20,052. The Nifty opened at 5,931 that was also its intra-day high level. For the rest of the trading session, both the indices traded in the negative zone. In the last hour of trading, the benchmarks hit their respective intra-day lows and tried to recover before ending in the negative. The Sensex hit an intra-day low of 19,676 and closed at 19,782 (down 216 points or 1.08%). The Nifty hit an intra-day low of 5,816 and closed at 5,851 (down 62 points or 1.06%).
Except for FMCG (up 0.74%); Realty (up 0.52%) and Pharma (up 0.12%) all the other indices on the NSE closed in the negative. The top five losers among indices were Metal (2.61%); Bank Nifty (2.03%); MNC (1.95%); Auto (1.66%) and PSE (1.66%).
Of the 50 stocks on the Nifty, 12 ended in the green. The top five gainers were Tata Power (3.80%); IDFC (2.66%); ITC (2.32%); Gail (2.03%) and Ranbaxy (1.18%). The top five losers were Jaiprakash Associates (11.98%); IndusInd Bank (5.65%); Tata Steel (4.48%); BHEL (4.12%) and ONGC (3.98%).
Reserve Bank of India (RBI) governor Raghuram Rajan on 11 September 2013, said India's slowing economy and its massive current account and fiscal deficits are not structural problems and can be fixed with modest reforms. Read: India does not have structural problems: Raghuram Rajan
After the close of markets, the union government unveiled the data on consumer price index for urban and rural India for August 2013 and industrial production for July 2013. After contracting for two consecutive months, the industrial output grew at a four-month high of 2.6% in July against contraction of 0.1% in same month last year, according to the official data released by Ministry of Statistics and Programme Implementation. This will pump some confidence in the economy as the IIP fell 1.1% in the first quarter of 2013-14 against a decline of 0.2% in the corresponding period of 2012-13.
The annual consumer price inflation eased marginally in August to 9.52% in line with expectations from 9.64 in July, government data showed on Thursday. Food prices for consumers also eased to an annual 11.06% in August from 11.24% in July.
The power ministry has made a proposal to mix imported and locally produced natural gas and supply it to electricity producers at a subsidized price.
The government will decide on raising the retail prices of diesel and cooking gas (LPG) in a few weeks, the oil secretary said on Thursday, in a bid to cut the biggest item in its import bill and support the local currency. While, on the other hand, petrol prices may be cut by as much as Rs1-1.50 per litre next week on falling international oil rates and appreciating rupee.
Except for Nikkei 225 (down 0.26%) all the other Asian indices ended in the green. Shanghai Composite, top gainer, up 0.64%.
Bank Indonesia on Thursday raised its benchmark interest rate by a quarter of a percentage point, while central banks in the Philippines, South Korea and New Zealand all kept rates on hold. Indonesia's central bank Bank Indonesia raised its benchmark interest rate by 25 basis points to 7.25% on Thursday. Bank Indonesia also raised the key money market Fasbi rate to 5.5%.
US indices had a mix performance on Wednesday with Dow rising by 136 points but the tech-heavy Nasdaq falling by 4 points. The US and Russia will meet today to discuss a plan for Syria to surrender its chemical weapons, potentially averting a military strike. Among the first steps US wants is, one of the US officials said, for the government of Bashar al-Assad to quickly make a complete, public declaration of its chemical weapons stockpiles as a prelude to inspecting and neutralizing them.
The UK’s unemployment rate measured by International Labour Organization methods declined to 7.7% from 7.8% in the second quarter, the Office for National Statistics said.
Italy's industrial production fell unexpectedly in July, declining 1.1% on the month in seasonally-adjusted terms, as output fell in all the main sectors apart from energy, national statistics institute Istat said Thursday. Industrial output in the euro zone's third-largest economy fell 4.3% in July from the same month a year earlier, using workday-adjusted terms for the annualized figure, Istat said. This marks the 23rd consecutive decline. June's monthly figure was revised lower to a 0.2% increase from the earlier estimate of a 0.3% increase, Istat said.
French consumer prices rose in August from July, led by an increase in the price of clothes and shoes, statistics showed Thursday. The consumer price index rose 0.5% in August from the previous month. Prices were 0.9% higher than in August 2012, France's statistics bureau Insee said. European indices were trading in the red and the US Futures too were trading in the negative.
Moneylife online survey on PMS shows large-scale underperformance and gross mismanagement by PMS companies. While many investors may not have invested due to lack of data for making an informed decision, a majority of those who have invested, say they lost money
There are 253 portfolio management schemes (PMS) offered by various portfolio managers, brokers and asset management companies, registered with the Securities and Exchange Board of India (SEBI). Moneylife has been campaigning to bring some transparency in how PMS performance data is reported. However, we also wanted to capture the experience of the investors of PMS in our cover story, Portfolio Management Schemes: Will Your Portfolio Blow Up?, through an online Survey. Our Survey received responses from 360 participants out of which nearly one-third have invested in PMS schemes. Here is a summary of the responses.
According to the Survey, lack of disclosure and poor performance are the main cause of concern for the investors which puts them off. As many as 35% said that they were not convinced if their PMS would deliver good returns. A disturbing 45% of the respondents who have invested in PMS say that they were unable to make an informed decision because of lack of data. Just 15% respondents of our survey said that they compared various schemes before investing.
More than half of those who invested in PMS schemes said they have lost their money. When we asked to name the PMS company in which they have lost money, there was no clear poor performing fund house; the names varied from HSBC Wealth Management to JM Financial and Kotak Mahindra PMS to HDFC PMS. Similarly when we asked which was the best PMS company, there was no clear winner either. As many as 65% of the respondents, who have invested, claim that returns were below the benchmark. A mere 5% say that they got returns better than the benchmark. Nearly half the respondents, who have invested, mentioned that their portfolio was churned excessively. This gross mismanagement certainly does not go down well with investors. Nearly 60% of the participants who have invested in PMS have stopped investing altogether. An equivalent proportion of respondents say that they will never recommend PMS to others.
While one-fourth of PMS investors have invested in multiple schemes, an equivalent number of investors were not sure of what kind of service (discretionary, non-discretionary, advisory) they have opted for. Were they greedy or foolish or both? Bankers have a major role to play in selection of PMS. Many abuse the trust of the clients and take them for a ride. In our survey, one-third of the respondents who have invested got to know of PMS through their bank relationship manager or wealth manager. Nearly one-fifth came to know of a PMS through a friend or a colleague and an equivalent number got to know of PMS through advertisements.
In terms of transparency, nearly 30% say that all portfolio details, charges and returns were not disclosed adequately. As many as 60% of the respondents who have invested in PMS mention that portfolio managers did not make smart investment decisions. But still, nearly 45% of the respondents feel that their PMS will deliver a return over 15% in the next five years. Nearly 75% of the respondents, who have invested in PMS, have done so over the last five years. Despite the complaints of gross mismanagement by PMS companies, just 2% have filed a complaint with the regulator.
The survey tried capturing certain key points like, how did the respondents come to know about the scheme, the reasons for not investing, how the investors rate the overall performance of the PMS, whether they lost money on PMS, has losing money on PMS de-motivated them to not to invest further, the names of the scheme where they lost money, whether they think the loss was due to bad selection and/or excessive churning and, most importantly, whether they compared other schemes of PMS before investing in one.
Recently we also analysed the performance of PMS which have disclosed their data (PMS Performance: The Good, the Average and the Ugly) Except for a couple of PMS companies, the performance of the others was patchy.
According to RBI it is necessary to build a repository of large credits and share it with banks so that the lenders are aware of building leverage and common exposures
The Reserve Bank of India (RBI) has decided to create a central repository on large borrowers, both individuals and entities, with an exposure of more than Rs10 crore to help banks deal with credit risks.
In a notification, the central bank said it is necessary to build a repository of large credits and share it with banks for enabling them to be aware of building leverage and common exposures.
“Accordingly, it has been decided to use the information supplied by the banks through the return on large borrowers (Form A)...which captures the system-wide exposure of individuals and entities having exposure (both fund and non-fund based) of more than Rs10 crore, for creation of a central repository of large credits across banks,” it said.
Raghuram Rajan, on taking over charge as governor of RBI, had said the central bank proposes to collect credit data and examine large common exposures across banks.
“This will enable the creation of a central repository on large credits, which we will share with the banks. This will enable banks themselves to be aware of building leverage and common exposures,” he had said.
RBI collects the data from banks and non-submission of or wrong reporting attracts penalties.
“Banks are advised to take utmost care of data accuracy and integrity while submitting data on large credit to the RBI, failing which penal action...would be undertaken,” the central bank said.
The gross non-performing assets (NPA) of public sector banks rose to Rs1.76 lakh crore at the end of the June quarter from Rs1.55 lakh crore on March 2013.
The ratio of gross NPAs to gross advances for commercial banks rose from 2.36%in March 2011 to 3.92% in June 2013.