Share prices headed further down: Friday Closing Report

Lower lows on the Nifty may take it the level of 4,460

The market, which traded in the positive till noon, saw the gains swiftly eroded in the second half on persistent selling in blue-chips by institutional investors. The sell-off resulted in the market closing lower for the fourth day. For the third day in a row, the Nifty could not manage to make a higher high but made a lower low each day. On a 45.45 crore volume of shares traded on the National Stock Exchange (NSE), the index broke its first support of 4,630. If the trend of lower low continues and the benchmark is unable to hold itself above the days high, we may see it going down to the level of 4,460.

The market opened firm tracking the strong Asian markets on the back of a positive close on Wall Street overnight. Buying in realty, auto and banking helped early gains. The Nifty opened with a gain of 14 points at 4,660 and the Sensex climbed 40 points to resume trade at 15,584.

Brisk buying enabled the indices hit their intraday high in early trade. At the highs, the Nifty scaled 4,690 and the Sensex rose to 15,694. The market came off the highs and was range-bound till noon trade.

A strong bout of selling in blue-chips like Reliance Industries, Jindal Steel, Tata Steel and DLF, pushed the benchmarks into the negative. The sell-off resulted in the market touching the day’s low in late trade. At the intraday low, the Nifty fell to 4,609 and the Sensex 15,407.

Concerns about the fall in gas output from RIL’s prolific KG-D6 fields and its fallout on power and fertiliser industries weighed on investors.

The market finally settled in the red, down for the fourth straight day. The Nifty closed 22 points lower at 4,624 and the Sensex fell 89 points to 15,455.

Markets in Asia settled mostly in the positive, boosted by a green close of US stocks overnight. Meanwhile, Japanese manufacturing activity, as measured by the Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI), rose to 50.2 in December from 49.1 in the previous month. This apart, China’s factory activity increased to 48.7in December, from a 32-month low of 47.7 in the previous month.

The Shanghai Composite gained 1.19%; the Hang Seng rose 0.20%; the Jakarta Composite climbed 0.35%; the KLSE Composite advanced 0.31% and the Nikkei 225 surged 0.67%. Among the losers, the Straits Times declined 0.99% and the Taiwan Weighted shed 0.04%. At the time of writing, the key European benchmarks were mixed while US stock futures were flat with a positive bias.

Back home, foreign institutional investors were net sellers of shares totalling Rs1,015.92 crore on Thursday. On the other hand, domestic institutional investors were net buyers of equities aggregating Rs323.07 crore.


IDFC Dynamic Plan: A dynamic asset allocation mutual fund

Dynamic plans give fund managers the flexibility to invest, but few managers are skilled for such a job. IDFC plans to take the plunge but would investors benefit?

IDFC Mutual Fund plans to launch a new fund—IDFC Dynamic Plan. According to the offer document filed with the Securities and Exchange Board of India (SEBI), it would be an open-ended equity scheme where the investment manager will have the discretion to take aggressive asset calls i.e. by staying 100% invested in equity market/equity-related instruments at a given point of time or he may have 0% invested in equity at another point of time, in which case, the fund may be invested in debt related instruments at the discretion of the fund manager.

Dynamic funds offer a flexibility to go fully into cash or debt and sit on the sidelines when the market is tanking. They will dynamically move from a fully-invested situation to being completely in cash and various stages in between, depending on the fund manager’s reading of the market situation  Dynamic schemes are attempts at market-timing—something that fund companies usually claim should not be done. Not surprisingly, the ideas have largely proved good only on paper. The performance of dynamic schemes is difficult to be judged as there is no such index to benchmark their performance. But given their flexibility they are expected to perform better than other schemes or at least give positive returns.

Sadly, dynamic funds have given poor returns for the one-year period ending 23 December 2011 when they were supposed to go into cash. Funds like ICICI Prudential Dynamic Fund, HSBC Dynamic Fund and Pramerica Dynamic Fund have given returns of -18%, -20% and -16%. Some of the equity funds have lost less money. The Sensex for the period has returned -21% and Crisil Composite bond fund index has returned 7%. Therefore from the above performance, flexibility given to the fund manager has not made a great difference.

Fund managers are skilled in studying a company and buying the stocks for the long-term. Only a rare few, anywhere in the world, are market-timers and they apply very sophisticated and proprietary quantitative techniques. If a scheme is launched at an opportune time after which markets have gone up manifold, whatever mistakes the managers would have made, do not have a significant impact on the returns.

Therefore how the dynamic plan of IDFC performs solely depends on the competence of its fund managers. Suyash Choudhary and Kenneth Andrade would be the fund managers of the dynamic plan. Suyash Choudhary comes in with 11 years of experience and is the head of Fixed Income at IDBI MF, whereas Kenneth Andrade has 15 years of experience in equity research & fund management and is head of Investments at IDBI MF.




5 years ago

I thought Fund Manager Suyash Choudhary and Kenneth Andrade are with IDFC MF. When did they join IDBI MF?

Or the writer has got confused between IDBI Dynamic Bond fund and IDFC Dynamic Plan.

2011 witnessed the rampage of social media over internet

Social media like Facebook, Twitter and others helped topple three governments in 2011. And when countries wait on the verge of a second coming, the digital space now appears more potent

It was a whirlwind year on the digital front. But there is one thing that defined 2011 the rampage of the social media such as Facebook, Twitter and several other such sites. We have been hearing that social media has arrived, but this was during 2011 when it took the world by storm; literally. From Tahrir Square in Egypt to the heart of Beijing, revolutions spread via Facebook and Twitter. Three governments have been toppled, and now, when countries wait on the verge of a second coming, the digital space now appears more potent.

Let us re-live the story. On 18 December 2010, a man in Tunisia, Mohamed Bouazizi, set himself on fire, protesting against police atrocities. A spark had been ignited. Stirrings were visible in Algeria, Egypt, Libya, Yemen; the war spread online: video evidence of the state’s repression appeared, along with suppressed facts. Revolutionaries, who thought they were alone, perceived and made friends.

Then, one day the Tunisian President fled (with a large chunk of the nation’s wealth). The wave had struck. Its might have manifested in the form of an unprecedented gathering at Tahrir Square in Egypt followed by similar protests in Yemen and Libya. Victory came to Egyptian citizens when in February its President of 30 years, Hosni Mubarak stepped down. What followed was unthought-of. In Yemen, Jordan, Iraq and Sudan, governments were sacked, and leaders announced they are going to step down. A new era had begun.
Birth pangs persist and with the West’s interference, things have become more complicated. But this time, the middle-eastern and African countries have made it clear that they will write their own history. The digital media, now, has become that weapon of self-assertion. Protests against the NATO bloodbath in Libya, including Gaddafi’s killing, existing and intended puppet governments are gathering force, and the digital media has become its herald.

Despite their failed attempt to overthrow the Red State with Jasmine Revolution, protestors in China have managed to find chinks in the government’s armour. If 2010 saw China’s bitter spat with Google about email addresses and internet transactions of human rights activists, this was the year when the people decided to take things in their own hands. When reports appeared that the high-speed bullet train project was about to bankrupt the country, the news was blocked out. But hackers made sure that it did not. While the censors worked overtime, another tragedy struck in the form of a recent train accident. Not only did activists publicise the incident on the internet, evidence of the authorities’ fault was also put up. The government has not been able to contain the damning content.

Another story raised hopes during 2011. Artist-activist Ai Weiwei has always been a vocal critic of Chinese government’s stance on democracy and human rights. Following his arrest in April, the Chinese regime got brickbats from all corners, including its own people, who took to the internet with a vengeance. After he was released from jail, Weiwei was slapped with a monumental 12 million yuan fine for tax evasion. But, within three days, online donations from citizens and fans worldwide provided a million yuans. The collection drive continues, and the government has withdrawn into silence, probably planning its next move.

However, 2011 also turned out to be apprehensive for cyber activists. Wikileaks suffered a big blow, when Mastercard, Paypal and other payment portals were blocked from its website, and donations were disabled. Julian Assange appeared more tensed during the press conference when he announced this than the day he was arrested.

The US however, did not have time to relish its triumph over Mr Assange. Soon after Mr Assange gave his interview, Mastercard suffered a breakdown in the hands of hacktivists who avenged blocking donations to Wikileaks. Thanks to groups Anonymous and Lulszec, the US was in for some other massive hacks, from which they are yet to recover and appear clueless about countering them. Individually, and teaming up on occasions, they hacked websites of FBI, US Senate, CIA, Sun newspaper, gaming and tourist websites; leaked military email addresses and snatched files from Viacom and Universal. But their biggest hit was the Sony Playstation website data theft, which not only left the authorities embarrassed, but also earned the latter scathing criticism for citizens for negligence. British authorities arrested Scottish hacker ‘Topiary’ of Lulszec, but nothing came out of it apart from a support campaign by Anonymous, which only garnered more sympathy for the hackers.

During 2011, internet search giant, Google also had to face some uncomfortable moments. Google+, the search giant’s answer to Facebook, began with a bang, but fizzled out soon. What followed was a hilarious blunder on their part, when a staff member’s personal post slamming Google for Google+ and pointing out their inability to do ‘platforms’ leaked online. However, taking a dignified stand, Google declared it would not censor any content, and refused to sack the engineer; because it was his right to express his views.

Google Zeitgest reveals that worldwide, last years pop-viral sensation, Rebecca Black (who also has the highest number of ‘dislikes’ on YouTube), was the most searched term, followed by Google+. Breakout singer Adele beat Fukushima nuclear plant and late Steve Jobs to appear at number seven slot.
In India, it was the celebrities’ triumph all the way. Anna Hazare had the fastest rising searches, while controversial model Poonam Pandey followed closely. However, Mr Hazare was beaten by Katrina Kaif as the most searched personality. Facebook, YouTube and Gmail were the top searches for India. IPL, despite the low TRPs it received, beat World Cup 2011 as the most searched event of the year.

In 2012, the most talked about issue will be the various internet censorship Bills that many governments are planning. In India, which has seen considerable action for the Lokpal movement via Facebook and Twitter, the government plans to bring in the law. But popular opinion is against any media censorship. India saw a 13% rise in number of internet users, Internet and Mobile Association of India reported, and by year end, the number is expected to stand at 121 million.
In the US, Congress wants to bring the Stop Online Piracy Act (SOPA), which is a gag order in disguise. However, much to the chagrin of most governments, Google issued a firm critique of the SOPA, and got the support of MasterCard and then revealed that most requests they get for blocking content come from the government who want all their misdeeds blocked out.
While efforts are made to push for similar gag orders throughout the world, activists are prepared to battle. With protests mounting in totalitarian states everywhere, 2012 will prove to be crucial for internet, which will probably see the beginning of clash between the democratic-digital domain and authorities.


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