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SAIL and Tata Steel's e-commerce joint venture, mjunction, aims to clock transactions worth Rs50,000 crore by 2012-13 from the Rs14,393 crore recorded last fiscal
The e-commerce joint venture between State-run steelmaker Steel Authority of India (SAIL) and Tata Steel Ltd, mjunction, on Thursday said that its value of transactions may treble to Rs50,000 crore by 2012-13 as online trade is gaining momentum in India, reports PTI.
"We aim to clock transactions worth Rs50,000 crore by 2012-13. We hope to complete the current financial year with transactions of about Rs20,000 crore," mjunction's managing director and chief executive Viresh Oberoi said.
The company, which is evenly owned by the steel majors, recorded a transaction value of Rs14,393 crore in the last financial year.
It hopes that 90% of its total transactions would come from its steel and coal trading business and the rest from the business-to-consumer segment.
Keen on growing overseas, mjunction is building a war chest of about Rs100 crore for acquisitions in the procurement space, especially in Europe and America. At present, it has facilitated business transactions in South East Asian nations like Thailand.
"We are planning to create a war chest of Rs100 crore for acquisitions which will be made in the next fiscal. This will come from the promoters and our internal accruals. We are now evaluating merchant bankers who can seal such deals for us," he added.
The maximum quantum of business has come from the futures trade in farm items such as guar seed, soyabean, soy oil and mustard seed as well as commodities such as energy and crude oil
The turnover of 23 commodity exchanges surged by over 50% to Rs69.70 lakh crore till February of the current fiscal due to a sharp rise in participation of agricultural and other commodities, the Forward Markets Commission (FMC) has said.
The turnover of commodity bourses had stood at Rs46.40 lakh crore in the same period last year, it said.
The maximum quantum of business has come from the futures trade in farm items such as guar seed, soyabean, soy oil and mustard seed as well as commodities such as energy and crude oil, data released by commodity markets regulator FMC showed.
Among 23 commodity bourses, the country's leading exchange Multi Commodity Exchange (MCX)'s turnover soared by 42% to Rs57.70 lakh crore during April-February of FY10, against Rs40.60 lakh crore in the same period last year.
The business of the leading agri-commodity bourse National Commodity & Derivatives Exchange (NCDEX) rose significantly by 69% to Rs8.30 lakh crore from Rs4.90 lakh crore, while National Multi-Commodity Exchange of India Limited (NMCE)'s turnover scaled up by five-folds to Rs1.90 lakh crore from Rs39,625 crore in the review period, the data showed.
The new entrant, Indian Commodity Exchange (ICEX), made business of Rs1 lakh crore since the launch of the exchange on 21 November 2009. The turnover of regional exchange National Board of Trade has risen sharply to over Rs25,000 crore so far this fiscal.
Currently, there are four national and 19 regional exchanges in the country.
Industry body AMFI acknowledges rampant mis-selling of MF products; puts blame on distributors, ignoring the fact that poorly-performing products of AMCs, aggressively sold with all kinds of incentives, are really the cause of mis-selling
The newly-appointed chief executive of industry body Association of Mutual Funds in India (AMFI) is looking to hit the ground running. Within days of his appointment, he announced his intention to crack the whip on the blatant mis-selling of mutual fund products to retail investors. However, his ire has been misdirected towards distributors, largely ignoring the role played by asset management companies (AMCs) in pushing the distributors to sell products aggressively.
In a recent interview with Business Standard, HN Sinor, the new chief at AMFI, acknowledged that mis-selling runs rampant in the mutual fund industry and that small investors were being short-changed on a regular basis. Announcing that this situation needed to be addressed on a priority basis, he indicated that distributors engaged in mis-selling should be suspended from selling mutual fund products.
While it is heartening to see that the new chief of AMFI has taken up arms against mis-selling, it would be unfair to tie the noose around distributors’ necks. This is very simply because distributors don’t manufacture products. Neither are they responsible for shoddy performance of the majority of mutual fund schemes. If anything, it is the AMCs of mutual funds that are promoting mis-selling in a bid to generate more business. Distributors are merely being lured into the high-stakes game being played by such AMCs.
Moneylife has previously written (see here) about how large AMCs are wooing distributors to sell their products more aggressively by organising lavish junkets for those who meet their business targets. It is this aggression that may lead to mis-selling. Indeed, has anybody ever come across any mutual fund company pulling up any distributor for mis-selling?
An independent financial advisor (IFA) who spoke to Moneylife on the condition of anonymity said, “The regulator gives a verbal indication of what the AMCs should pay to distributors but none of the AMCs follow that. AMCs are forced to lure distributors with upfront brokerage as high as 4% because of the changed rules of the game. After the new rule that payment of trail commission will go to the new distributor, competition for assets under management (AUM) shopping has become very intense. No distributor is certain of the trail commission coming to them. They want to earn future trail commissions upfront. It means there is no obligation or attraction for them to serve investors after the allotment. The new broker will also not service investors because he won’t get any trail commission which is already paid upfront.”
The irony is that if there is any segment of distributor that indulges in mis-selling it is the industry where Mr Sinor has worked for decades—the banking industry. “Banks mis-sell products involving large sums of money under false representation. They rely least on the strength of the product and requirement of investors. They are constantly abusing their trusted relationship with depositors. There is a need to regulate AMCs and bank distributors more,” he added.
Small distributors are also feeling the heat after the no-entry load ban imposed by SEBI last year. In such a scenario, they are under pressure from the large distributors who are leaving no stone unturned to grab their business from under their nose. In the race to fight for their very survival, small distributors are not thinking twice before selling fund schemes blindly to investors. It is time AMFI realised where the root cause of the problem lies. It has come under a lot of fire recently for being a toothless body with no concrete measures or actions for improving industry standards. It has largely done nothing significant to standardise any of the practices. Mutual fund prospectuses are a shame compared to the IPO prospectuses. If AMFI wants to bring about some positive changes, AMFI must look within. It has a lot in its plate to start with.