All but 13 out of the 38 fund houses post a surge in assets. Investors’ comfort level in the equity market in recent times, has helped the domestic fund market garner more corpus in February compared to January. According to data released by the Association of Mutual Funds in India (Amfi), the industry’s average asset under management (AAUM) increased by 2.64 per cent to Rs 7,81,711.52 crore in February against Rs 7,61,625.53 crore in the previous month.
Kenneth Andrade, head - investments, IDFC Mutual Fund, said, “There has been net inflows in all the categories this month.”
A fund manager, who did not wish to be named, said, “Investors are now reconciling with the market movement. In the coming months too, flow of money will remain positive as sentiments are good.”
Out of the 38 existing fund houses, 13 registered a drop in their AAUM. All top players, barring Reliance Mutual Fund whose AAUM dipped marginally by 1.28 per cent in February, gained on assets.
Assets of AIG Global Investment and Bharti AXA, were the worst hit recording a drop of over 12 per cent. DSP BlackRock, Escorts, Fidelity, HSBC Mutual Fund, ING Mutual Fund, LIC Mutual Fund, Mirae Asset, Morgan Stanley, SBI Mutual Fund and Sundaram BNP Paribas were among other fund houses that recorded a negative marking in terms of AAUM growth.
The players who made the most, include new entrant Axis Mutual Fund with a rise of 42 per cent in its AAUM, Taurus Mutual Fund (27 per cent), Shinsei Mutual Fund (14.7 per cent), Fortis Mutual Fund (14.4 per cent), Benchmark Mutual Fund (11.5 per cent) and Baroda Pioneer (10.5 per cent).
Rajiv Anand, CEO, Axis Mutual Fund, said, “In February we saw strong inflows in our money market and short term funds. On the equity side, the inflows were marginally positive.”
Last month, after a lull of almost five months, the equity segment witnessed net inflows airing optimism for equity schemes for which the market regulator Sebi had banned the entry load in August, last year.

Our Bureau
Mumbai, March 3
Mutual funds attracted inflows across schemes in February when total assets under management (AUMs) rose 2.6 per cent, though there was a slight bias towards investments in debt schemes, according to both fund managers and an industry spokesperson.
The AUMs of 38 fund houses touched Rs 7,81,711 lakh crore in February, according to Association of Mutual Funds in India (AMFI) data for February.
Scheme-wise data
The AMFI Chairman, Mr A.P. Kurian, said the scheme-wise data would be due in a couple of days, and would provide a fair picture.
“Most of the inflows are in the debt side but we have to wait for scheme-wise data to get the exact picture,” Mr Kurian said.
“There have been large inflows from corporates and some from banks,” a top official from UTI Mutual Fund said.
Fixed income products
“Fixed income products have seen good inflows. On the equity side, there has been good participation especially from HNIs (high networth individuals).
As far as systematic investment plans (SIP) go, there have been steady inflows,” the UTI official added.
“The inflows have been across the schemes,” Mr Kenneth Andrade, Head –Investments, IDFC Asset Management Company, said. IDFC's AUM in February rose to Rs 26,438 crore with net inflow of Rs 1,679 crore.
“We saw an inflow of Rs 150 crore in our asset allocation plan, which is a hybrid scheme, another Rs 210 crore was added in our monthly income plan fund,” Mr Andrade said.
The fund houses that added the most to their AUM in February in value were UTI Mutual Fund (Rs 4,800 crore), Birla Sun Life Mutual Fund (Rs 3,700 crore), Kotak Mahindra Mutual Fund (Rs 3,578 crore) and ICICI Prudential (Rs 2,148 crore).
Among the new entrants, Axis Mutual Fund's AUM grew over 42 per cent to Rs 3,753.87 crore as against Rs 2,641 crore in January.
Peerless Mutual Fund also made its debut, reporting an AUM of Rs 121 crore after its launch last month.
The fund houses that reported flat to negative growth in their AUMs were Reliance Mutual Fund, SBI Mutual Fund, AIG Global, Bharti AXA, Mirae Asset.

Our Bureau
Chennai, March 3
SBI Mutual Fund has declared dividend of 40 per cent for Magnum Tax gain 1993, an open-ended ELSS, under the dividend option. The record date for the same is March 5.The NAV under the dividend plan as on March 2 was Rs 42.01.

Woods: Would introduction of the direct taxes code and goods and services tax (GST) in 2011 change your outlook or sector choice?
Subramaniam: It will not change our outlook or sector choice. But we will be conscious of the fact that the introduction of GST may help certain sectors reduce their cost of operations. The impact of these reductions will be factored in our assumptions and we could look at valuations before making our decision.
KEA: Are your sales picking up after you got listed? How has your experience been with the new platform?
Subramaniam: Our sales have definitely picked up in the last few months. In fact, in the last few months while the industry has seen outflows, we have seen decent inflows. The platform is still new and investors will take time to accept it.
Also See MF and Budget 2010
Rupan: You just have 25 stocks in the fund. Why?
Subramaniam: We usually have around 25 to 40 stocks in our portfolio. Since the markets have run up in recent months, the fund manager had more reasons to sell and, therefore, the number of stocks are on the lower side.
Livemint: Any thoughts on how the auto sector is doing?
Subramaniam: In terms of sales numbers, the auto sector is doing quite well. While the long-term opportunity for automobile companies is bright, stock valuations in the auto sector are not inexpensive.
KEA: What about the Budget?
Subramaniam: The Budget is well balanced, and some measures are prudent. For example, the intention to keep the fiscal deficit under control.

Aegon Religare Life Insurance (ARLI), a joint venture of the Netherlands-based Aegon and India’s Religare Enterprises Limited, has targeted a premium amount of Rs 240 crore in the current financial year, which is its first full year of operations.
The company, which started operations in July 2008, has a capital base of Rs 550 crore. It has over 50,000 customers and 7,000 insurance advisers.
According to chief operating officer Yateesh Srivastava, the company’s Star child plan, which is aimed at encouraging parents to plan their child's education, will account for 10 per cent of ARLI’s total premium.
He told mediapersons here on Wednesday that ARLI had launched a scholarship scheme for the children of Star child plan subscribers as a part of its advertising campaign. The company had set up a corpus of about Rs 8.2 lakh for the scheme under which five “lucky” children would be given a scholarship of Rs 2,000 a month each till they attain the age of 18 years or finish Class 12, whichever was earlier.
A 12-year-old boy from Hyderabad, Naushad Ali, is among the five children selected for the scholarship this year. Starting from April 2010, Ali, son of a mechanic, would receive Rs 24,000 a year for a period of six years from ARLI, Srivastava said.

SBI plans to scale up staff intake
Raising target from 11,000 to 25,000 will take care of retirements and positions at new branches.
The State Bank of India (SBI), the country’s largest lender, plans to scale up intake of clerical staff to 25,000 from initial estimate of 11,000 to take care of largesscale retirements and positions at new branches.
At present recruitment process is underway and bank is seeking legal opinion on increasing intake (from 11,000 to 25,000 ) in this recruitment phase itself, a senior SBI official said.
This increase will help save time and cost in the sense that bank would not be required to start fresh recruitment process next year. The estimated cost for the clerical recruitment in 2010 is pegged at Rs 50 crore, official said.
While written examination is though (which saw 27 lakh people appearing for tests), the interviews would be held over the next 2-3 months. The induction is expected to be two stage process ending before March 2011.
Bank has already recruited about 33,000 persons in clerical cadre since 2007. With 25,000 extra hands, the total intake would cross 50,000 by end of March 2011.
It has also taken 6,000 clerical hands on board at its associate banks. “Our assessment of manpower needs factors in the needs of banking entities within group. With consolidation underway, bank would group approach is becoming more relevant,” said another official.
SBI plans to nearly treble its branch network to 50,000 by the end of the current decade from 17,075.
At present, SBI has 12,207 domestic and 141 overseas branches while the remaining belong to its six associate banks.
The bank has 250 million accounts. It plans to merge the associate banks with itself over the next few years.
This year alone, SBI has opened 975 branches and it intends to add another 1,000 branches during 2010-11. At the start of the first decade, SBI had around 9,100 branches.
The Indian bank’s branch expansion plan is a reversal of its strategy at the start of the decade, when like most banks, SBI too was focusing on its existing network and generating more business from them.
http://www.business-standard.com/india/news/sbi-plans-to-scalestaff-intake/387380/

IDBI Bank scheme for NRIs

Kochi, March 3
IDBI Bank has launched Portfolio Investment Scheme services in Kochi that would enable NRIs and persons of Indian origin to invest in secondary capital market. More than 40 brokers in Kerala and other parts of the country along with NRIs attended the conference. Mr C.S. Jain, Head, Personnel Banking Group, IDBI Bank Ltd, said that launch of PIS services complemented the existing bouquet of products/services being offered by the bank to its NRI clientele. Mr Debashish Mallick, Chief General Manager, said that the bank is offering the product to NRIs/PIOs both online and offline mode where they can invest either on repatriation or non-repatriation basis. Mr Jorty Chacko, Regional Head (South), was present. – Our Bureau
http://www.thehindubusinessline.com/2010/03/04/stories/2010030453071900.htm

SEBI

The Supreme Court has upheld the power of the Securities Exchange Board of India (Sebi) to bar executives of a company from accessing the security market and prohibiting them from buying, selling or dealing in securities.
The judgment was passed while setting aside the ruling of the Securities Appellate Tribunal (SAT) in the case of Ajay Agarwal, joint managing director of Trident Steel Ltd. SAT had quashed the Sebi’s order.
Sebi initiated investigations against Trident Steel on receipt of a complaint by a BSE member relating to public issue of the company. In the course of investigation, it appeared that the company’s directors had pledged their personal holding of 750,000 shares with Bank of Baroda, and a director and Dowell Leasing and Financing Ltd had given non-disposal undertaking to Bank of Baroda, lead manager to the issue.
This was not disclosed in the prospectus of the company. This appeared to be a violation of Sebi guidelines on disclosure for investor protection. Thus an important aspect of the capital structure of the company was not disclosed in the prospectus as a result of which investors were misguided.
After hearing the replies of persons concerned to the show cause notice, the Sebi chairman passed an order in 2004 restraining Agarwal “from associating with any corporate body in accessing the securities market and also prohibited him from buying, selling or dealing in securities for a period of five years.”
The order was contested in the appellate body. It quashed the Sebi’s order on the ground that the board had not followed the procedures existing at the time of the offence. The board applied new procedures to the old irregularities, it was contended.
The Supreme Court rejected this argument and asserted that amended procedures can be applied retrospectively.

As many as 17 companies which have got Securities and Exchange Board of India (Sebi) clearance for initial public offers (IPOs) are yet to announce the date for their public issues. The firms are planning to raise Rs 10,000 crore from markets collectively.
Companies such as Reliance Infratel, Lodha Developers, IL& FS Transportation, Nitesh Estates, DQ Entertainment (International) and AMR Constructions are among those who obtained Sebi approval but have not declared the dates.
Companies are waiting for the right time to launch their issues as markets are volatile and retail participation in the recent IPOs has been dismal, companies and bankers say.
The BSE Sensex shed 7 per cent in 2010 after foreign institutional investors (FIIs) pulled out around Rs 9,435 crore from equity markets, after a 10 per cent rise between November and December 2009.
“We are working on the dates and getting ready for roadshows, as we have obtained the approvals. We want to time it correctly, as there is a volatility in markets. Though retail participation is weak, we are relying on institutional participation,’’ said a banker close to Nitesh Estates’ issue. With the lukewarm response for its REC follow-on offer, the government is also not taking any chances. The state-run SJVNL, which is planning to hit the market before March, is likely to delay its IPO due to unsuitable market conditions.
Five out of nine IPOs such as Hathway Cable, Vascon Engineers and DB Realty, which were listed in February this year, are trading at 4 -35 per cent below their issue price.
The poor interest shown by retail investors in recent IPOs is also a big concern for companies planning to launch new issues. Though DB Realty got an overall subscription of 2.63 times, the retail participation was just 0.35 times. Similarly, Hathway got retail participation of 0.22 times, though the overall subscription was 1.34 times.
Now, the interest of companies for public issues are waning thanks to the the double whammy — declining markets and poor retail interest.
Only four new companies, Gyscoal Alloys, Mittal Corp, Inventuregrowth and Securities and Asian Business Exhibition and Conferences, applied for fund raising from equity markets in February.
As many as 61 companies had applied with Sebi to raise funds through IPOs between August 2009 and January 2010.

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