Check out some top ELSS funds

NAVs end with positive returns

Equity diversified NAVs closed higher and their advance:decline ratio stood at 181:65, as the benchmark Nifty finished choppy session higher on the back of buying in heavyweights like Reliance Industries, TCS, Bharti, Wipro, NTPC, Infosys, ITC along with banking and pharma stocks. The sell-off was seen in capital goods, auto, realty, cement, select telecom, metal and power stocks along with HUL and BPCL.
The 30-share BSE Sensex closed at 17167.96, up 69.63 points or 0.41% and the 50-share NSE Nifty rose 0.34% or 17.15 points to 5133.40. 
On the sectoral front, banking, pharma and technology funds advanced while FMCG funds declined.
Long and short term debt funds also closed with positive returns; their advance:decline ratio stood at 60:17 and 94:3, respectively.

• Equity diversified NAVs close higher
• Banking, pharma and technology funds advance
• FMCG funds decline
• Long and short term debt funds close with positive returns

Woods: What sectors are you bullish on? What are you staying clear of?
Shah: We are bullish on banking, capital goods, automobiles, pharmaceutical and logistics sectors. We are wary of commodities, real estate and FMCG sectors.
KEA: How different is your portfolio now than what it was when markets were at 8,000?
Shah: When markets were at 8000, we were overweight on consumer, pharmaceuticals, utilities, Nifty and cash in our portfolio. Now it is more cyclically oriented with we being overweight on capital goods, automobiles and having reasonable weight in banking.
Also See | DSP BlackRock Top 100 Equity Fund
Bonu: The fund seems to invest a lot in industrial materials and financial services. What makes them attractive?
Shah: We are positive on these and even the market benchmark is invested in these.
Rapid recovery in our economy since 2008 has led to exhaustion of excess capacity. So, demand for capital goods will go up to expand capacity.
KEA: Is intense competition in the telecom sector eating into revenues?
Shah: We feel the telecom sector may take a few months to bottom out.
Woods: What is a healthy mix of investments for a 30-year-old salaried person?
Shah: Generally, younger people can take higher equity risk due to high remainder lifespan. Mutual funds could be a way to get that exposure. Of course, the ability of individuals to tolerate ups and downs will determine their exposure levels.
Woods: You earlier said commodities were a problem sector. So should I stay away?
Shah: We do have exposure to commodity stocks. However, they seem to be discounting high growth in the world economy and, hence, they can fall if growth disappoints.

MUMBAI: From April 1, Indian corporates will have to bear a bigger slice of an insured loss from their own pockets. Till now, a company paid just Rs
10,000 out of its own resources if there was a fire or flood — insured events for which it had bought covers from non-life firms. Now, it will have to fork out as much as 5% of the claim, which could run into several crores.

Bitten by underwriting losses resulting from intense price war in the past three years, non-life insurers have taken a collective decision to fix a floor level for deductibles — the portion of risk required to be borne by the policyholder.

Although the industry association, General Insurance Council, denies that there is any agreement at the council level, brokers said at least two companies have issued identical circulars, which indicated a concerted effort by players.

For instance, a circular issued by Oriental Insurance sets out the minimum deductible applicable for all fire and engineering policies with effect from April 1. Earlier, the claims on policies with sum insured of above Rs 10 crore per location was Rs 10,000. Now the new limit is Rs 10,000, or 5% of the claim amount, which ever is higher? For a claim like the Indian Oil fire in Jaipur last year, the deductible would run into several crores, which will be a direct hit on the balance sheet of the company.

“The only discussion that took place in the council was that insurers should adopt prudent underwriting practices,” said a senior council official. Deductibles are considered a prudent underwriting practice to ensure that the policyholder has an interest in taking all loss prevention measures. Secondly, deductibles spare insurance companies of the administrative hassles involved in low-value high-frequency claims.

Deductibles not only reduce the claim payouts, but also substantially bring down the administrative expenses for general insurance companies. This would be a relief for non-life insurers who have been recording balance sheet losses amid a rate war that has left them bleeding. According to Pavanjit Singh Dhingra of Prudent Insurance Brokers, an increase in deductibles was expected as the current deductible levels were fixed in the ‘90s. “However, we believe that every insurer should ascertain and price risk according to their individual strengths and capacity. It seems that insurer’s feel that they cannot be individually disciplined enough to underwrite risks as per their own judgement and that a market agreement is required with all acting in concert to prevent one from undercutting the other,” he said.

The industry is also facing pressure from reinsurers. All reinsurance treaties are renewed with effect from April 1 and reinsurance companies are pressurising insures to be more prudent in their rates. “Treaties with non-life companies are not at all profitable and we are planning to put in restriction and are still discussing with the companies. However, we do not advise companies on either the rates or deductibles they should apply,” said GIC Re chairman Yogesh Lohiya.

“Another way of looking at this situation is that insurers are finding it difficult internally to enforce pricing discipline and are trying to curtail claims instead. From these steps and the difficulty that insurers are having with their treaty renewals makes us feel that we may see higher prices in the near future as well,” said Mr Dhingra.

http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/Cos-may-now-have-to-bear-bigger-slice-of-insured-loss/articleshow/5673985.cms

The four public sector general insurance companies — New India Assurance, National, United India and Oriental Insurance — have decided to work with only a handful of third-party administrators (TPAs) to manage claims in the health segment more efficiently.
TPA is an intermediary between hospitals and insurance companies and helps cashless claim settlement. Insurance companies blame TPAs for fraudulent claims in the health space, where the claim ratio is 130 per cent.
Senior executives of the four insurers said working with lesser number of TPAs would help insurers monitor their work better and work on reducing fraudulent claims. These four account for 60 per cent of the market share and 70-80 per cent of the business of TPAs.
“The intention behind rationalisation is to have better control over management of claims. The outgo in the health segment is high compared to the premium income, and the only way to be present in this segment will be increasing the premium rate, if not controlling TPAs. We have been working with 10 TPAs for some time and it has yielded good results,” said S Gopalakrishnan, general manager of New India Assurance.
“We are reviewing the performance of TPAs. We will work with those who deliver good results and get us better business. We will reallocate business after that,” said a senior executive of United Insurance Company. For one of the four insurers, the total inflow into health insurance was around Rs 1,400 crore while the outflow was around Rs 1,800 crore.
On the other hand, TPAs see this as a threat to the industry, especially the smaller players. A senior executive of Paramount TPA said, “If PSUs cannot accommodate the TPAs, it will be difficult for everyone to survive.”
Insurers say the regulator is also issuing any number of licences, and since the capital requirement is low, more and more players are getting into the business. TPAs expect the rationalisation process to lead to consolidation among smaller players. At present, there are 27 players in this space. Last year, the Insurance Regulatory & Development Authority had increased the minimum capital requirement for TPAs from Rs 1 crore to Rs 5 crore. At the time of the inception of TPAs in 2002-03, the government had suggested that an insurance company could appoint two TPAs per region. According to TPAs, the number of players was less at that time and the limit should be revised. In the last eight years, business volume has grown six times.
Public sector insurers are working on an in-house network of TPAs so that they can monitor the process better to bring down the high loss ratio in this segment. They have submitted a report to KPMG, which will come up with the final report within 16 months of receiving the mandate.

Bank consortium to fund Technopark III
Thiruvananthapuram-based Technopark has tied up with a consortium of four banks - Indian Bank, Catholic Syrian Bank (CSB), Federal Bank and South Indian Bank -- to fund its Phase III development. The four banks with SIB as the consortium leader will extend a loan of Rs 220 crore to the IT park.
“This is the second consortium arrangement among banks for funding Technopark projects. Early this year, other four major banks — Central Bank of India, Bank of India, Indian Overseas bank and State Bank of Travancore -- joined together to fund the Technocity project's land acquisition programme worth around Rs 390 crore. This is in addition to Nabard funding of Rs 50 crore for Technopark Kollam project as soft loan,” said Mervin Alexander, CEO of Technopark.
The new IT building can accommodate 10,000 professionals and generate approximately 25,000 indirect employment. With the completion of Phase III, Technopark will create 75,000 job along with the co-developers in the SEZs.
The third phase will be developed over 92 acres and house one of India’s largest IT buildings with a total built-up area of one million sft. Support facilities like 110 KV sub-station, and water supply system are already in place while work on land development, internal roads, sewage treatment plant and canal embankment is on full scale.
http://www.business-standard.com/india/news/bank-consortium-to-fund-technopark-iii/388321/

SEBI
Sebi to notify SME listing guidelines shortly

Some change to November draft, based on feedback; no vetting of offer documents.
The Securities and Exchange Board of India (Sebi) will soon announce guidelines for listing small and medium enterprises (SMEs). The move is expected to set the ball rolling for a separate exchange or a platform for SMEs.
More than four months have passed since Sebi first announced draft guidelines for a separate exchange or a platform for SMEs.
“We are in the process of amending the guidelines and will notify these shortly,” said Sebi Chairman CB Bhave.
Those familiar with the development said the final guidelines would be somewhat different from the draft norms as they would incorporate feedback from various market participants.
“The guidelines have been finalised internally. While the basic structure will be what was announced last year, there will be some tinkering based on feedback from industry. There were quite a few meetings with industry participants, including stock exchanges, investment bankers and investor associations,” said a person familiar with the development.
The draft, released last November, said merchant bankers should perform market-making activities (prepared to both buy and sell shares or any other security whether or not there are customer orders) for three years. This was also one of the main concerns raised by the investment banking community. It was argued that small bankers did not have access to sufficient funds to do market-making for three years. Industry sources say this norm will be slightly modified in the final guidelines. “It was clarified in the discussions that it need not be a merchant banker. A banker can appoint a broker or a group of brokers on its behalf,” a source said on condition of anonymity. A merchant banker, rather than blocking his own money, could appoint someone for a fee, he added. There are, however, concerns related to liquidity, as many wonder if there will be enough floating stock for people trade on such a platform.
Sebi would also do away with the process of vetting offer documents for listing on the SME segment. In other words, an investment banker has to do the due diligence itself and file the prospectus with the market regulator and the exchange. Sebi will not issue any observation. The company can hit the market any time after filing the offer document. “Smaller entities that want to time the market will come through this route as vetting the document has been done away with,” said the head of a mid-sized investment banking firm who did not wish to be named.
A limit of Rs 25 crore of paid-up capital would be fixed for a company intending to list on the segment. Companies listed on the segment would be compulsorily shifted to the main board of the exchange after exceeding the Rs 25 crore post-issue paid-up capital limit. SMEs would be required to present financial numbers on a half-yearly basis, instead of quarterly. The minimum initial public offer size has been pegged at Rs 1 lakh.

“With better food production inflation will die down. Food inflation is high; it’s a concern. My own expectation is by April-May the base effect would have gone,” Mr Basu said. The government has taken action and that is why we are witnessing some decline in food prices, Mr Basu said, adding that the overall average inflation will be around 4% for 2009-10.

Earlier, he had said though fuel prices would lead to a marginal rise in the wholesale price infaltion, however, a lower fiscal deficit in the long-run will dampen the average inflation. Changes in the tax structure announced in the Budget 2011 have caused fuel prices to go up. The WPI will rise by 0.4 percentage points due to the fuel hike.

The government had hiked customs duty on petrol and diesel to 7.5 % from 2.5% while excise duty was raised by Re 1 on non-branded (normal) petrol and diesel.

Meanwhile, Minister of State for Finance Namo Narain Meena in a reply to query in the Rajya Sabha said the hike in prices of items could be attributed to expectations of supply-side constraints of food items, especially due to unfavourable Southwest monsoon.

The government has taken several measures to check infaltion in food items, including reducing import duties to zero for rice, wheat, pulses, edible oils and sugar, Mr Meena said.

Besides, the government allowed import of raw sugar at zero duty under open general licence, he said. Two million tonne of wheat and one million tonne of rice have been allocated to states for distribution to retail consumers over and above normal public distribution system allocation, he added.

1|2|3| 4| 5|6|7|8|9| 10| 11| 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 |