This new fund offer is an open-ended equity sector scheme, with its focus on the banking & financial sector, which has been delivering good returns lately
Taurus Mutual Fund has filed an offer document with SEBI (the Securities and Exchange Board of India) to launch Taurus Banking & Financial Services Fund, an open-ended sectoral equity scheme. The new fund offer (NFO) is priced at Rs10 per unit.
Entry load is nil but there is an exit load of 1.00% if an investor exits or switches out of the Fund before one year. After one year, there is no exit load charge. There are two options available under the Plan of the scheme-growth and dividend payout. If dividend payable under the dividend payout option is less than Rs250, then the dividend would be compulsorily reinvested in the reinvestment sub-option of the scheme. The minimum application amount for first purchase during NFO & ongoing offer is Rs5,000 and in multiples of Rs1,000 thereafter, while for additional purchase, the minimum application amount is Rs1,000 and in multiples of Rs1,000 thereof. Sadanand Shetty is the fund manager for this scheme.
Sector funds' performance is linked to the fortune of the sector. If the sector is doing really well, they outperform the market for that period. The contrary too holds true. The banking sector performs well when there is an overall growth in the economy. Economic growth results in an increase in corporate credit offtake. Also, the retail loan segment does well in a growing economy as people tend to borrow more to finance their homes, cars and so on. This is also the most popular sectoral fund category. But the stocks of this sector also suffer when the Reserve Bank of India's policies are perceived to slow down banks' business.
Currently, the banking sector is doing well with the BSE Bankex index giving a compounded return of 24% in the past 5 years. But we never know when it will start declining, just as it happened to the infrastructure sector, which is one of the worst-performing sectors now.
For lay investors, a diversified equity mutual fund is more suitable. These funds typically, will have some exposure to all sectors, especially the ones that are doing well on the stock market. Since identifying the right sector is virtually the key to stock market success, focusing on winning sectors seems an obviously good strategy.
The asset allocation of the scheme will be in such a way that the objective of the schemes to generate capital appreciation will be met, but with minimum risk through investments in a portfolio of equity and equity-related instruments of banking, financial and non-banking financial companies. Hence schemes would allocate 75% to 100% of assets in equity & equity-related instruments of companies belonging to the banking & financial services sector and the scheme may also use debt & money market instruments to allocate 0% to 25% of its assets.
The performance of the scheme will be standardised against the BSE Bankex index.
“To make wine industry more organised & competitive, our focus will be on to regulate whole industry and to set a higher benchmark to compete in the international market,” said Nitin Desai
The Indian Grape Processing Board (IGPB) under Ministry of Food Processing Industries, Government of India has appointed Nitin Desai as a director of IGPB.
Mr Desai, chairman and managing director of Vinsura Vineyard, has been recognised for his efforts in promoting and nurturing the grape growing industry at the grass root level and channeling his passion and energies to develop and expand the wine industry in India.
Mr Desai said, "Our immediate goal will be contribute to the growth of the wine industry through inputs in viticulture and create awareness about wines through wine festivals & other awareness activities. To make wine industry more organised & competitive, our focus will be on to regulate whole industry and to set a higher benchmark to compete in the international market."
Nifty to target 5,780
The Nifty carried on from where it ended on Friday, registering an even better intra-day high and low today, with a 46 points gain to close at 5,680. We expected the Nifty to move to the 5,700 level, which it did at the intra day high. The market reacted strongly to events such as the benefit for telecom majors from the tariff hike by Airtel and in anticipation of better results from Reliance Industries.
After 10 days of sideways consolidation, the market is headed higher. We can expect the Nifty to move up to 5,780.
The market looked past the weakness in its Asian peers and overcame nervousness ahead of the Reserve Bank of India's policy review meeting, to climb higher on buying in heavyweights, and it settled higher for the second straight day.
Weak cues from the Asian region led to a flat opening in the domestic market. The imbroglio over raising the US debt ceiling ahead of the 2nd August deadline was the main factor that impeded the markets early on. The Nifty opened at 5,634, unchanged from its close on Friday, while the Sensex resumed trade 31 points higher at 18,753.
The market was volatile and fluctuated on both sides of the neutral line on added concerns that the RBI may raise rates again on Tuesday. The indices fell to the day's low in initial trade, the Nifty dropping to 5,617 and the Sensex back to 18,671.
The market remained range-bound in choppy trading till around 1pm, when key European indices opened weak. Buying in Reliance Communications, Bharti Airtel, M&M, Sterlite Industries and some others, helped the indices cross their psychological levels-5,700 (on the Nifty) and 18,900 (on the Sensex)-in the post-noon session.
The indices went on to touch the day's high as the Nifty rose to 5,701, a gain of 84 points from its intra-day low, and the Sensex went up to 18,932, up 261 points from the day's low.
The advance-decline ratio on the National Stock Exchange (NSE) was a positive 994:681.
The broader indices underperformed the Sensex today as the BSE Mid-cap index settled with a gain of 0.49% and the BSE Small-cap index advanced 0.50%.
The top sectoral gainers were BSE Auto, BSE TECk (up 1.38% each), BSE Capital Goods (up 1.23%), BSE Healthcare (up 1.22%) and BSE Metal (up 1.17%). The only loser was BSE Fast Moving Consumer Goods (down 0.80%).
The best performers on the Sensex were RCom (up 14.91%), Bharti Airtel (up 5.37%), M&M (up 3.49%), Hindalco Industries (up 2.32%) and Sterlite Industries (up 2.25%). The major losers were Cipla (down 1.24%), ITC (down 0.96%), Hindustan Unilever (down 0.67%), Infosys (down 0.66%) and ONGC (down 0.05%).
The top gainers on the Nifty were RCom (up 13.84%), Bharti Airtel (up 4.86%), Axis Bank (up 3.28%), M&M (up 3.26%) and Sun Pharma (up 3.21%). The main losers on the benchmark were Cipla (down 1.54%), Sesa Goa (down 1.30%), Power Grid Corporation (down 1.14%), ITC (down 1.13%) and Infosys (down 0.79%).
However, the indices came off their highs in a minor bout of profit booking in the late session and the Nifty closed with a gain of 46 points at 5,680 and the Sensex settled at 18,871, up 149 points.
Markets in Asia settled in the red as the yen rallied against the dollar and railways-related stocks in China were hurt after an accident involving two high-speed trains over the weekend. The Shanghai Composite posted its biggest single-day percentage fall since mid-January, losing 2.96%.
The Hang Seng declined 0.68%, the Jakarta Composite fell 0.48%, the KLSE Composite slipped 0.35%, the Nikkei 225 fell 0.81%, the Straits Times was 0.36% lower, the Seoul Composite tanked 0.96% and the Taiwan Weighted tumbled 0.93%.
Back home, foreign institutional investors were net buyers of stocks worth Rs444.91 crore on Friday while domestic institutional investors were net buyers of shares worth Rs243.05 crore.
Today, the board of directors of Chennai-based education support services company EdServ Softsystems approved the launch of a GDR issue to raise up to $35 million to fund its expansion plans.
EdServ expects to complete the fund-raising process within the next fortnight. With the latest fund raising, it has also revised its revenue guidance to achieve a 60% growth in the current year. The stock closed up 1.75% at Rs139.30 on the National Stock Exchange.
The country's largest wind turbine-maker Suzlon Energy today said it will sell its 26% stake in Belgian company Hansen Transmission to German firm ZF Friedrichshafen for $187 million (about Rs840 crore). The transaction would be done through Suzlon's step-down, wholly-owned subsidiary, AE-Rotor Holding BV (AERH). The Suzlon stock gained 3.4% to settle at Rs54.75 on the NSE.
Engineering and construction conglomerate Larsen & Toubro (L&T) has won a major order valued at $273 million from Qatar General Electricity & Water Corporation (Kahramaa) for the supply and construction of 13 extra high voltage (EHV) sub-stations in Qatar. The order, a part of Qatar's power transmission system expansion phase 10 (stage I) project, is the single largest secured by L&T's power transmission and distribution (PT&D) division in a GCC country. L&T rose 1.5% to Rs1,854.60.