Companies & Sectors
VSNL former CMD BK Syngal hits out at TRAI ex-chiefs Baijal, Misra
In a series of tweets, Syngal alleged that Pradip Baijal and Nripendra Misra, both former chief of TRAI causes scams, one the 2G and the other converting limited to unlimited mobility causing colossal losses
 
BK Syngal, former chairman and managing director of erstwhile Videsh Sanchar Nigam Ltd (VSNL) has accused Pradip Baijal and Nripendra Misra, both former chiefs of the Telecom Regulatory Authority of India (TRAI) of aiding private telecom operators.
 
In a series of tweets, Syngal said, " (Two) 2 TRAI Chairman think they are holy cows. Nay, both caused colossal losses, one in 2G the other bypass in ILD traffic by flawed regulation."
 
Interestingly, Baijal in his self-published book "The Complete Story of Indian Reforms: 2G, Power and Private Enterprise-A Practitioner’s Diary" alleged that former Prime Minister Manmohan Singh had asked him to cooperate with former Telecom Minister Dayanidhi Maran because non-cooperation could compromise the UPA government. 
 
Here are the tweets from Syngal, the former CMD of VSNL...
 
 

User

Nifty, Sensex still weak. Bank Nifty shows some strength – Wednesday closing report
If Bank Nifty can strengthen above today’s high it could target 18,650
 
We had mentioned in Tuesday closing report that NSE’s CNX Nifty will turn higher if it manages to stay above 8,300. The 50-stock index moved in the red for most of the session Wednesday. Among the various efforts to move higher, the benchmark twice managed to reach up to yesterday’s close but moved lower thereafter. 
 
The S&P BSE Sensex opened at 27,447 and moved in the range of 27,364 and 27,596 before closing at 27,565 (up 33 points or 0.12%). Nifty, which opened at 8,303, moved between 8,278 and 8,343 and closed at 8,335 (down 5 points or 0.06%). On the contrary, Bank Nifty except for the trading in the red at the beginning of the session moved higher and closed highly in the green. Bank Nifty opened at 18,300 and moved from the low of 18,236 to the high of 18,562 and closed at 18,539 (up 210 points or 1.14%). NSE recorded a volume of 69.37 crore shares. India VIX rose 1.26% to close at 17.2825.
 
On Thursday, NSE will witness a higher volatility on account of expiry of futures and options (F&O).
 
The Reserve Bank of India (RBI) is scheduled to announce its second bi-monthly monetary policy review for the year 2015-16 on 2 June 2015. It is likely to cut policy rates by 0.25% in its upcoming policy review meet next week, a Citigroup report said Wednesday.
 
Citigroup has slashed its long-term iron ore price forecast by 32% from $ 81 per tonne to $55 per tonne, predicting global demand led by the top consumer, China, will contract from 2018 to 2025 while low-cost output will rise.
The rupee dropped below the 64 mark, falling 17 paise, to quote at 64.15 against the US dollar in early trade today.
 
The Indian government has said that FIPB's approval will not be required for merger and acquisitions in sectors, where FDI is allowed under automatic route, a move aimed at further improving the ease of doing business in the country.
 
Infosys CEO and Managing Director Vishal Sikka said that the management's mission is to prepare the company for realising $20 billion revenue by 2020.
 
India will become self-reliant in urea and fertiliser in the next four years and is aiming to become the steel hub of the world, Union Minister for Chemicals and Fertilisers, Ananth Kumar said. However, this is unlikely to happen because it still takes enormous time to start and expand businesses in India.
 
Coming back to stock markets, Wockhardt rose 10.67% to close at Rs 1,575.05 on the BSE. The stock was the top gainer in ‘A’ group on the BSE. It was in news as the Exchange sought clarification from the company with reference to the news appeared in media mentioning that its US FDA has completed inspection of its both Waluj, Chikalthana facilities.
 
Tech Mahindra fell 14.24% to close at Rs549.35 on the BSE. It was the top loser in ‘A’ group on the BSE, after it posted weak March 2015 quarter result after-market hours on Tuesday.
 
BHEL today gain was the top gainer in Sensex 30 pack. It rose 3.34% to close at Rs249.05 on the BSE. Tata Motor fell 5.12% to close at Rs471.65. It was the top loser in the Sensex pack.
 
On Tuesday, US indices closed deeply in the red. Richmond Federal Reserve Bank President Jeffrey Lacker, who is a voter on this year's Federal Open Market Committee, said yesterday that he still hasn't decided whether to vote for an interest-rate increase at the central bank's June 16-17 meeting.
 
Asian indices closed mostly in the red. Shanghai Composite (0.63%) was the top gainer while Seoul Composite (1.68%) was the top loser.
 
Inflation in Japan will not hit a sustained 2% pace this year and any pickup in prices could take considerable time, the Bank of Japan (BoJ) said in minutes of its April board meeting released.
 
European indices were trading in the green. 
 
US Futures too were trading higher. 
 
Greece's finance minister, Yanis Varoufakis, yesterday said that Athens will be able to make its next payment to the International Monetary Fund on 5 June 2015 because it will have reached an agreement with its creditors by then. Greece is scheduled to repay euro 1.6 billion ($1.76 billion) to the IMF between June 5-19.
 

User

Nearly 20% of equity mutual funds merged or discontinued in past five years
A high percentage of equity schemes were closed or merged over the past five years. Despite adjusting for survivorship bias, over 75% of equity schemes outperformed the benchmark
 
When the average returns of mutual funds are touted, they are of funds that exist over the entire period of study. That is, it is a return of the survivors. What about funds that are closed or merged during the period? How does that affect average returns? Since it is impossible to know at the start of the period which schemes would survive and which won’t, it is important to take into account the returns of all the schemes that were there at the start of the period and then arrive at average returns. This is called survivorship bias free returns. However, despite eliminating survivorship bias, a majority of equity schemes outperformed the selected benchmarks.
 
S&P Dow Jones Indices has done exactly this, especially since over the past five years, many mutual funds were merged or liquidated. In a research titled—“SPIVA® India Scorecard”, Standard & Poor's Indices Versus Active (SPIVA) reported that the survivorship rate of equity mid-and small-cap schemes over the one- and three-year periods was close to 91%, but it reduced drastically to 70% over the five-year period. Over the five year period as many as 16 of the 53 mid-and small-cap schemes at the start of the period were merged or liquidated.
 
Reporting the fund performance of the industry, SPIVA Scorecards account for the entire opportunity set—not just the survivors—thereby eliminating survivorship bias. Large-cap schemes reported poor benchmark related performance compared to other category of equity schemes. Some 76% of the 105 large-cap equity actively managed schemes outperformed the S&P BSE 100 over the one-year period. This drastically reduced to 42% and 47% over the three- and five-year periods, respectively. All index returns considered in the report are total returns, that is, they include dividend reinvestment.
 
In the mid-and small-cap category, more than 89% of active schemes in this category outperformed the S&P BSE Mid Cap over the one-year period. Over the three- and five-year periods, 78% and 64% of the active schemes outperformed the benchmark respectively.
 
Equity linked savings schemes (ELSSs) had the highest survivorship rate, more so, because these schemes have a lock-in period of three years. In terms of performance, 95% of ELSSs outperformed the S&P BSE 200 over the one-year period, which reduced to 86% and 69%, respectively over the three- and five-year periods. The lock-in period is advantageous for fund managers, the quantum and frequency of inflows and outflows would not be as much as the other open-ended category of equity schemes.
 
The report says, “Over the five-year period, active funds in the Indian ELSS and Indian Composite Bond peer groups maintained a healthy survivorship rate of 97% and 94%, respectively. Close to 20% of the active funds could not survive in the Indian Equity Large-Cap and Indian Government Bond peer groups over the same period. Also for the five-year period, the survivorship rate in the Indian Equity Mid- and Small-Cap category was the lowest, at 70%.” 
 
Mutual funds usually launch a high number of new fund offers during a Bull Market. Investors tend to get in when the market is rallying and fund houses look to capitalise on this behavioural bias. For example, as many as 92 equity schemes were launched over the one year period ended April 2014. Although most of the schemes launched in this period are close-ended schemes. Similarly, over the four year period from January 2004 to January 2008, as many as 165 equity schemes were launched. The schemes which are unable to gather an economically sustainable corpus or which have reported a poor performance are usually merged with other schemes.
 
This report considers just the past five year period for performance, hence it may not be representative of the true picture of the mutual fund industry as it considers point-to-point returns. In past we have highlighted the risk of choosing a wrong mutual fund scheme. It is important for investors to choose those schemes that have beaten the benchmark consistently over multiple periods.

User

COMMENTS

manoharlalsharma

2 years ago

Nearly 20% of equity mutual funds merged or discontinued in past five years / IS A CLEAR LOSS OF CONFIDENCE IN EQUITY MARKET & NO INITIATIVE TAKEN TO GRADUATE CITIZENS.

komal jain

2 years ago

valuable information

jossie

2 years ago

SEBI should not allow Funds to launch new scheme which are more a less same as the prior ones. What happen is the fund house gain some corpus and charge a big fees which are charged to the scheme and past on the the brokers as marketing cost.

Suketu Shah

2 years ago

With every article ml publishes on mt,right on the top you shd state how much ml mf has given returns to prove that all other mf are nonsense and ml mfunds page is the right answer to those wanting to invest successfully in mf.it is much higher than all mf having "big names" as fund managers but poor performances to back like prashant jain,etc.

PARESH kamat

2 years ago

IS THIS REPORT MADE PUBLIC BECAUSE NOW THEY WANT TO PROMOTE ETF

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)