Wednesday, April 29, 2009

MFs offer top-ups to bring back investors

With markets remaining volatile, fund houses are offering products having new features, aimed at tackling the downturn and eliminate the uncertainty element as much as possible.
One fund house has even lowered the ticket size to a portfolio management services (PMS) product, willing to bring into the PMS fold even those who are just on the borderline of qualifying as a highnetworth individual (HNI). Fund managers believe that this would help them in bringing retail investors back into the industry.
Over the last one year, first a bad equity market hurt fund investors hard. Then as the gilts were rallying, they shifted to gilt funds but soon burnt their hands there too. Thereafter as they shifted to FMPs and liquid funds, there also, between October and December, the liquidity crunch hit them hard. Looking at this chain of events the fund industry had to work overtime to launch schemes which could minimise investment risks as much as possible.
Recently HDFC Mutual Fund (MF) has introduced ‘Flexindex’ plan that allows investors to put money in equity funds at their preferred Sensex levels. ICICI Prudential MF has come out with a ‘Target Return’ fund, which gives the investors to lock in their gains at pre-set trigger points.
On its part, IDFC MF has launched its Hybrid Infrastructure scheme, a portfolio management services (PMS) product with entry load as low as Rs 10 lakh. And UTI MF is offering its second scheme under the “Wealth Builder” umbrella, whose portfolio is spread across equity, debt and gold in good measure to shield investors from the market volatility.
In all of I-Pru MF’s equity schemes, there is a trigger return but almost no investor opts for this, top fund house officials said. Under the ‘Target Return’ fund this trigger is compulsory. For example, after an investor’s investment gains 20%, either his full investment along with the gains, or only the profit part will be transferred to a debt fund where the risk of losing money in case of a market downturn is much lower.
I-Pru MF recently also brought in a systematic transfer plan in its ‘Income Opportunities’ fund, which allows investors to enjoy gains in the debt category while allowing them a gradual entry into the equity market.
“These products would gain momentum in the short run. We have to give a lot of solutions to investors now,” said Vikram Kaushal, head, retail sales & distribution, I-Pru MF.
“Investors are looking for relatively safe and less volatile products. Since returns are quite low in these market conditions we have to offer products that provide stability ,” said Harsha Upadhyaya, fund manager, UTI MF. “In a market like this investors are more receptive to such ideas,” feels Dhirendra Kumar, CEO, Value Research, a firm that tracks MFs.
::RICH PICKINGS::
ICICI Target Return
The investor would have a range of triggers to choose from 12% to 100%. The fund, which would invest primarily in largecap stocks, offers the option to either switch the entire investment along with appreciation or just the appreciation to any of the four debt funds man-aged by ICICI
HDFC Flexindex
The investor can put money into select HDFC debt/liquid schemes and choose four Sensex levels or ‘trigger events’ of choice to get into equity. They can then automatically transfer investments from these debt/liquid schemes to select equity schemes of HDFC MF at closing Sensex levels of choice
UTI Wealth Builder
The fund invests in equity, debt and gold. Investments are scaled up or brought down in each of these asset categories depending on market conditions. The fund can invest a maximum of 35% in gold/debt

BNP Paribas, Sundaram to launch India-dedicated offshore fund

To take advantage of the highly under-owned pattern of the Indian equity market, French financial major BNP Paribas will set up an offshore fund jointly with the Sundaram group. The two companies are already running a mutual fund in India called Sundaram BNP Paribas Mutual Fund with assets of over Rs 10,000 crore.
According to top Sundaram BNP Paribas officials in India, the offshore fund will be domiciled in Singapore and legal formalities for this are under process.
“Initially, it would be a $100-million plus India-dedicated fund and it is likely to be launched before the end of 2009,” said sources close to the development, adding that Sundaram BNP Paribas would be marketing the fund aggressively in middle-eastern countries.
FUND FUNDAMENTALS
* Initially, it would be a $100-million plus India-dedicated fund
*It is likely to be launched before the end of 2009
*Credit Suisse too is looking to set up an India-dedicated offshore fund
TAX SOPS
* Of late, Singapore has become the most-favoured destination for fund managers
* Singapore grants tax exemption to a qualifying fund, provided it is not 100 per cent owned by domestic investors
* Collects tax, if any, from the investor*Fund managers are taxed only 10 per cent on their fee-income
BNP Paribas is one of the six strongest banks in the world, according to Standard & Poor’s. The group is present in 85 countries. The group is very strong in three major segments: corporate and investment banking, investment solutions and retail banking.
Apart from Sundaram BNP Paribas, Switzerland-based global financial major Credit Suisse too is looking to set up an India-dedicated offshore fund.
While most of the offshore funds are domiciled in Luxembourg or launched from tax havens like Mauritius or Cayman Islands, of late Singapore has become the most-favoured destination due to its tax exemption policies.
To encourage fund managers to set up shop, Singapore has in place a tax incentive scheme to benefit offshore funds. A qualifying fund will be granted tax exemption, provided it is not 100 per cent owned by Singapore investors. Tax, if any, will be collected from the investor, depending on his specific profile. Apart from this, fund managers are taxed only 10 per cent on their income from fees.
According to some of the top traders in Indian markets, Singapore has become more of a single-point investment destination for major Asian markets. All major benchmark indices, including India’s Nifty, are listed on the Singapore Stock Exchange (SGX). In fact, Singapore has become so important that global financial majors can decide the mood of Asian markets from that country alone.
“If fund managers want to take a call on Indian markets, they do not have to bring their money to India. Instead, they can simply trade Nifty futures on SGX and this saves them legal hassles involved in getting money into India,” said a Singapore-based fund manager.

Tuesday, April 28, 2009

Peerless may launch mutual fund next year

The Kolkata-based residuary non-banking finance firm Peerless General Finance and Investment Co is likely to launch its own mutual fund next year, a
senior company official said here Tuesday.
'We have got in-principle approval from SEBI (Securities and Exchange Board of India) and within the next six months we hope to get the final approval. We are going to launch the fund next year,' Peerless director of financial products distribution Jayanta Roy told reporters.
The company has been planning to launch a mutual fund for quite some time.
Meanwhile, Peerless signed a pact with private sector insurer Max New York Life Monday for distribution of Max Vijay insurance cum savings policies.
Max New York has targeted sales of over 500,000 such policies in one year through the Peerless network.
'We have so far sold 20,000 policies,' said Max New York chief executive officer and managing director Rajesh Sud.

Economy may recover by Sept: ICICI Prudential

Offering atleast three pre-requisites, Nilesh Shah, deputy managing director of ICICI Prudential Asset Management Company said the economy may recover by September this year.
According to Shah, if the next few months witness a good monsoon, capital flows from abroad and further rate cuts by RBI, Indian economy may come out of the current slowdown.
Shah, who was in the city to launch 'ICICI Prudential Target Returns Fund', an open ended diversified equity fund, further said that the country may witness negative inflation between May and September.
"What we may see will not deflation but negative inflation for a short time. The economy may witness negative inflation between May and September," he said.
The AMC's Target Return Fund seeks to generate capital appreciation by investing predominantly in equity shares of the large market capitalization companies constituting the BSE 100 index.
The scheme will have pre-determined triggers set for investors based on their risk appetite, which provides investors with an option to automatically switch the appreciation or entire investment with appreciation to pre-selected debt schemes of ICICI Prudential Mutual Fund.
The entry load for the scheme is 2.25 per cent for investments of less than Rs 2 crore under the retail option, while it is nil in the case of institutional investments. The subscription for the scheme will close on May 14, 2009. The assets under management of the ICICI Prudential mutual fund as of March 2009 were Rs 51,432 crore against Rs 54,321 crore in the same month previous year.

India-fund flows turn positive

Global investors are warming up to India, it appears from the fact that money has started flowing into India dedicated funds after the local markets gained close to 40% in a global rally.
These funds saw inflows of around Rs 500 crore in the week ended April 22 and a little over Rs 1,000 crore over the past four weeks, Citigroup analysts Elaine Chu and Markus Rosgen wrote in a report.
Inflows for the year were marginally negative by around Rs 10 crore until the latest inflows. Following the inflows, however, cumulative inflows have turned positive at around Rs 490 crore.
The same week (to April 22) last year had seen outflows of Rs 4,000 crore.
The Sensex has gained 3211 points since the beginning of the rally.
From the beginning of the year till March 9, after which the rally began, FIIs sold Indian equities worth Rs 9,000 crore.
Since March 9, they have invested Rs 8,000 crore in the Indian markets.
Experts, however, aren't celebrating just yet. While it is true that investors have allotted money for India, when and how it comes into India would depend on the new government at the Centre, the banking system in the US and economic numbers, they say.
The fiscal position and the general elections are still a cause for concern.
However, the outlook may be improving.
"While the first worry is justified, we believe the risk of an anti-market government emerging is very low. An attractive prospective PE of 11.4x suggests India could rebound once the election is out of the way," HSBC analysts John Lomax, Wietse Nijenhuis and Anupama Rao said in a report.
The Indian economy was likely to rebound with growth returning in the second quarter of FY10 and real GDP growth for CY09 could come in at 6.2%, the HSBC analysts said. "We expect earnings growth of 5-10% this year too, whereas the consensus has already been cut to 4%."
Jagannadham Thunuguntla, equity head at SMC Global Securities feels India's attractiveness as an investment destination would depend on the outcome of the elections. "There would be a bit of herd mentality as far as foreign money is concerned. Once the initial flow begins, then a lot more can follow. Right now, FIIs would be looking to a stable government for cues. If there is sufficient flexibility for the government to act, then one can expect foreign money to chase India," he said.
Ajay Argal, co-head, equity investments at Birla Sun Life Mutual Fund agrees that most FIIs would be playing a waiting game as far as the elections are concerned. But they would also watch the health of the financial system in the US and data in India. "The first week of May will reveal how well banks are holding up to stress tests and that will have an impact on the financial sector and global sentiment. In India, FIIs would be watching for numbers like industrial production," he said.

UTI mutual funds to merge equity schemes

UTI Asset Management Company (UTI AMC), one of the largest fund houses in the country, is planning a mega merger of the equity schemes in its portfolio. The process is likely to be kicked off in the current financial year.
Speaking to TOI, UTI MF chairman & MD U K Sinha said the organisation currently had too many equity schemes, which would be pruned by over 50%. Currently, the fund house has 96 schemes, of which equity schemes number 29.
The number of equity schemes is likely to be brought down to 10 through mergers over a period of time. Sinha said too many schemes in the market only proved that the Indian mutual fund industry still remained immature.
“Here, investors prefer new fund offerings than an existing fund. But it is just the opposite in matured markets. One should understand that the possibility of higher returns is much more in existing schemes. NFOs are more of a marketing strategy. But as all fund houses are doing that, we, too, have to come out with NFOs,” he added.
Sinha said that during the last financial year, it had merged nine schemes into three. This year, it would consolidate four schemes into two. Commenting on balanced schemes, he said that UTI has a very good bouquet of balance funds. “We have now also introduced systematic investment facility under ULIP. There is no plan to change the number or add any new scheme in this space,” he added.
Sinha said the number of fixed maturity plans (FMP) at 35 is also quite high. But he added that it is not possible to prune FMPs. “FMPs have a different maturity period and so it is not possible to merge them,” he added.
He said demand for corporate bonds is very high as banks are still very cautious about lending. “UTI has lend over Rs 5,000 crore in last couple of months. The figure for the MF industry, as a whole, is Rs 35,000 crore,” he added.
Meanwhile, UTI AMC has tied up with Coopers Wealth Creators and Tower Infotech for providing investment opportunities through micro pension initiative under UTI Retirement Benefit Pension Fund to employees and business associates of Tower Infotech.
Senior V-P and regional head (east) of UTI AMC, T K Maji, said the micro pension initiative is aimed at providing social security cover to private and unorganised sectors.

Is it the right time to invest in gold schemes?

In times of turbulence, when equity seems to have lost out in race, fund houses have begun to cash in on the interest generated by the yellow metal. Gold has gained over 57% in the last two years. But, the moot question is: does it make sense to invest in the metal at current levels?
Fund managers and investors have been the beneficiaries of the spike in gold prices in last two years and both gold exchange traded funds (ETFs) and world gold funds (WGFs) have become highly popular among investors these days.
Gold ETFs are mutual funds that invest directly in pure gold while WGFs invest in equities of gold mining companies across the globe. Both these categories of mutual fund schemes have generated handsome returns for the investors, though WGFs have been affected by the stock market meltdown.
Gold ETFs, whose returns are directly linked to the gold price, have generated over 20% returns in last one year. The spectacular show by this category has resulted in healthy inflows into these schemes. Since January 2008, the assets (AUM) of gold ETFs has surged by about 59% to Rs 756 crore by the end of March this year.
Currently five fund houses offer gold ETFs in India, but more are gearing up to join the group. Recently SBI Magnum joined the bandwagon of Benchmark, UTI, Reliance, Kotak and Quantum, who currently offer gold ETFs. Interestingly, Kotak AMC now plans to launch another gold fund. According to its offer document filed with Sebi, the new gold fund would be a feeder fund that would invest in existing gold ETFs.
WGFs have also put up a decent show in the last six months. These are however feeder funds and thus not actively managed in India. Both AIG and DSP Blackrock, the only two fund houses currently to have WGFs, manage these funds through their internationally based parent gold fund.
While the equity meltdown did impact WGFs, especially in the first half of the last fiscal, the sensational rise in the gold prices did benefit the stocks of gold mining companies where WGFs usually invest. Both the WGFs have thus reported more than 50% rise in returns over the last six months, which is even higher than the rise in gold prices.
Encouraged by the rising price of the gold, fund houses are now devising plans to diversify portfolios to incorporate the yellow metal . While UTI has launched a wealth builder fund that invests in equity, debt and gold ETFs, Sundaram BNP Paribas is also planning to launch a scheme on similar lines whose offer document has been filed with Sebi. Investors can now thus look forward to many more options to invest in gold.
But is it the right time to invest in gold schemes?
Recently a brief rally in equity markets resulted in the fall in gold prices from $967 an ounce to $865 in just two weeks. If the equity rally continues for some more time, gold prices may see further downside and may see the the range of $840- $800.
Historically too, the April-September period has been a subdued one for gold. However, if gold manages to close above $915- $920 in the coming days, the metal could rise to around $1000 by the second half of the current year.Nevertheless, gold’s outstanding performance last year continues to makes it one of the most preferred investment avenue for several investors.

Sunday, April 26, 2009

A comeback for value investing

Though growth stocks have made the most of the bull market momentum, value
stocks did much better in containing falls during the inevitable reversal. The
result: a better long-term record.

The stock market has rallied 40 per cent in a flash; mid-cap stocks have kept pace with blue-chips and the action in small-cap stocks is reaching frenzied proportions, with many of them clustered at the upper circuit limit on any given trading day.
While speculative froth is undeniably building up in one segment of the market, there has been a rational element to how stock prices behaved in this unexpected rebound. Value investing, or buying stocks that trade far below their intrinsic value, has paid rich dividends in the bounce-back from the March trough.
And that’s not a flash in the pan. Our analysis shows that value investing has delivered good results for Indian investors over the long term as well. That contrasts with the popular notion that India is a “growth” market where investors shouldn’t mind paying a high price for alluring earnings prospects.
Consider the stock market surge from the recent low (8100 for Sensex). In the BSE-500 basket, the highest returns have been amassed by stocks with a PE multiple of less than 5. These stocks delivered an average 60 per cent gain between March 9 and now. Stocks with a modest PE below 10 averaged 53 per cent. Both classes of stocks easily outpaced the index return of 37 per cent.
Low PE stocks within each sector have also delivered better gains than their more expensive peers. Tata Motors has zoomed ahead of Maruti Suzuki (75 per cent versus 21), Reliance Communications has delivered thrice the returns of Bharti Airtel and Suzlon Energy has beaten NTPC hollow (65 per cent versus 6 per cent).
All three outperformers are clear instances where investors have bet on a deeply discounted price, brushing aside concerns on near term earnings or business uncertainties.
Further analysis shows that it is not just stock selection based on low PE that has worked. Investors who used other “value” filters — a high dividend yield or a low price-to-book value ratio — were rewarded equally well. Stocks with a high dividend yield (see table) have delivered a 55 per cent gain between March 9 and now, while those trading below their book value have gained 58 per cent.
This cherry-picking of stocks ties in with the fact that the triggers for this market rebound came from instituional investors returning to Indian stocks. Since mid-March, there has been consistent FII buying and deployment of cash positions by domestic mutual funds and private insurers, even as retail investors cashed out. Institutional investors may have preferred undervalued stocks for two reasons. One, the ongoing slowdown has made it difficult for investors, even institutional ones, to make multi-year forecasts on revenues or earnings of companies. With projections subject to higher uncertainty, it appears safer to stick to stocks which discount only modest growth expectations.
Two, the steep market falls of last year and the 80-90 per cent erosion in some mid- and small-cap names has made investors pay greater attention to downside risk in recent times, leading to a “value” bias.
But is this partiality for low PE stocks a recent trend? Should investors go for less expensive stocks while building a long-term portfolio? While the answer to this question may have been very different during the bull market years from 2003 to 2007, recent evidence suggests that they should.
The market meltdown of 2008 has done much to restore the credentials of ‘value investing’ as a strategy suited to the Indian market. Though India is widely believed to be a growth market where institutional investors seek stocks for their heady growth prospects (and not for their bargain prices), today’s return numbers as of today, tell a different story. After two gut-wrenching market cycles, value stocks today sport a much better long-term track record than growth stocks, having delivered much better returns over 3, 5 and 10-year holding periods.
Compounded annual returns on the MSCI India Value Index (the key benchmark for value-style managers, Source: MSCI Barra) for a ten-year period at nearly 17 per cent, are at almost double the returns delivered by the MSCI India Growth Index (8 per cent).
A ten-year analysis shows that though growth stocks have made the most of the bull markets during their momentum years, value stocks did much better in containing falls during the inevitable reversal.
Given the tendency of the Indian market to swing (without warning) from a bull to a bear phase once every few years, it is the MSCI Value Index that has built up a better long-term track record than the Growth Index, till date.
For equity investors keen to build wealth over the long term, containing losses in a market fall may be as important as participation in upside during a bull phase. The message is, if you are looking at reasonable returns along with a less bumpy ride in the stock market, have a ‘value’ tilt to your portfolio.
Another reason why investors may be better off owning under-valued stocks in market conditions such as this is that value stocks have usually led the initial leg of a market recovery from a bear phase.
As Indian markets commenced a new bull market after bottoming out in April 2003, the MSCI Value index climbed by 101 per cent in the eight months that followed, while the Growth index rose by just 77 per cent. Value stocks would also have delivered better returns after the May 2004 correction.
Value strategies also posted lower losses than growth-led ones during the vicious downturns in equities. The MSCI India Value index (decline of 42 per cent) fell much less than the Growth index (down 67 per cent) in the aftermath of the dotcom bubble.
This pattern was again repeated in the meltdown between January and November 2008, when the Growth Index plunged by 64 per cent while the Value Index got away with a 55 per cent decline.
So what are the implications of the above trends for retail investors looking to rejig their portfolios?
With recent stock price gains driven mainly by re-rating of PE multiples (as the earnings picture remains quite bleak for many sectors), use the recent market rally to book profits in the more expensive stocks in your portfolio. That may also mean reducing exposure to the stiffly valued “defensive” stocks among FMCGs, power generation and pharmaceutical companies. Within sectors, switch to those that are available at less demanding valuations.
While adding cheaper stocks to your portfolio, beware of value ‘traps’— stocks that are trading at a low valuation, but could yet get cheaper as the company’s business or liquidity conditions deteriorate. Stocks of commodity companies (they appear cheap because of a high earnings base, which won’t be sustained), realty companies (who may post sharp profit falls) and the highly leveraged companies appear to be classic value traps in today’s context. If you find selecting value stocks a tricky proposition, take the mutual fund route. Most fund managers in the Indian context tend to be “growth oriented”. But value-focussed funds such as Templeton India Growth Fund, ICICI Pru Discovery Fund and UTI Dividend Yield Fund make a good addition to your portfolio.

Friday, April 24, 2009

Markets are waiting for a clear picture on the political front

Indian markets have started looking attractive; fresh inflows are being witnessed from foreign institutional investors (FIIs) and markets are rallying upwards. Mahesh Patil, equity co-head, Birla Sun Life Mutual Fund, while speaking Chirag Madia of The Financial Express, says that once the election results come out on May 16, a clear picture will emerge. He also says that the Indian Mutual Fund (MF) industry is on the path of a gradual recovery post the redemption pressure during October-November last year. Excerpts:


•What are the factors which are leading the domestic market in the current scenario?
Indian markets are following global markets and the liquidity problems that we faced during the last year are slowly getting over. Apart from that, we are growing at a rate of over 5-6% and till now quarterly earnings have also been better than expected.
I think that overall, the condition is improving and that’s the reason we are witnessing and upward rally in domestic markets. I don’t think that there might be much negative news from the quarter’s results which are currently on. There are very low chances that Indian equity bourses will again touch the lows witnessed during the October-November last year. Markets are likely to remain in the range of 8,500-12,000 for the next few weeks.

•Despite the upward rally in Indian markets, there is sense of fear in the mind of investors as a huge amount of profit booking is taking place and investors are waiting for political uncertainties to ease...
Yes, there might be some pauses in the market as general elections results are awaited. We can also say that till before the election results, markets are likely to remain under pressure and there will be clear picture of where we are heading; it will emerge only after the results are declared on May 16. If the Congress-led UPA or BJP-led NDA comes to power, there are chances that markets will run ahead. If the third front takes office, then markets are likely to see some downward corrections.

•Recently, the RBI, in its monetary policy, cut the repo and reverse repo rates by 25 basis points. Do you think this will have any major impact on the markets?
I think the central bank has taken the right step by slashing the repo and reverse repo rates; there are chances that interest rates will start coming down from here. However, it is essential to point out that it may not have a huge impact on the markets. The markets will wait till results of the elections are announced.

•FIIs are entering the market yet again. Do you see increased inflows from them after the election results are announced?
I think that risk appetite is increasing slowly and FIIs are coming in as they feel that this is the only market that has some future growth prospect. With interest rates going down, they feel this is the right time to invest in the market as well. Apart from that, FIIs are also doing a good amount of profit booking. So, once we have clear picture on political front, we will witness more inflows from FIIs.

•After the tremendous redemption pressure seen by various fund houses last year, the MF industry’s AUM is improving. Despite that, investors are shying away from investing in MF schemes…
The MF industry, in line with the equity indices, has shown some smart recovery.
Gradually, people have realised that we are coming out of the financial crisis. People are waiting for the right time to invest in MFs, and I think this is the right time.

•More and more mutual fund houses are increasing their exposure to large-cap stocks. What are the reasons for this?
Various factors are playing in the minds of fund managers, like corporate governance and most importantly, the liquidity issue. These factors are good in large-cap stocks compared to small-cap stocks. Apart from that, mid-cop stocks have also given some fabulous returns in the past.

•During January and February this year, we witnessed several fund houses holding cash. But, in the last month, they have started deploying the cash in the market. Also, despite, an upward rally in the markets, fund houses are not offering new equity schemes. When do you see new equity schemes flowing in the markets?
Markets have improved in the last one month. So, fund houses think that this is the right time to invest. Now onwards, there might not be much correction in the markets and we feel that, investing at this time might give good returns to investors.
We haven’t seen much inflow in equity schemes, compared to debt schemes. But, I think that we will start witnessing new equity schemes being launched by various fund houses in the coming days. We too are coming out with an equity combined with debt scheme very soon.

DSP BlackRock World Energy Fund looks Sebi's approval

Open ended fund of funds scheme, investing in international fund
DSP BlackRock Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch DSP BlackRock World Energy Fund, an open-ended fund of funds scheme, investing in international fund. The face value of the new issue will be Rs 10 per unit.
The primary investment objective of the scheme is to seek capital appreciation by investing predominantly in the units of BlackRock Global Funds – World Energy Fund and BlackRock Global Funds – New Energy Fund. The scheme may, at the discretion of the investment manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The scheme may also invest a certain portion of its corpus in money market securities and/or money market/liquid schemes of DSP BlackRock Mutual Fund, in order to meet liquidity requirements from time to time.
Features of the scheme
Investment option: The scheme offers two plans viz. regular and institutional plan with growth and dividend option. The dividend option further offers dividend payout and dividend reinvest facility.
Minimum application amount: The minimum investment amount under regular plan will be Rs 5000 and in multiples of Re 1 thereafter and under institutional plan will be Rs 5 crore and in multiples of Re 1 thereafter.
The scheme seeks to collect a minimum subscription amount of Rs 1 crore during NFO period.
Asset allocation: The scheme will invest 50-100% in units of BlackRock Global Funds (BGF)-World Energy Fund (WEF) or other similar overseas mutual fund scheme(s) with high risk profile. It will invest 0- 30% in units of BlackRock Global Funds (BGF)-New Energy Fund (NEF) or other similar overseas mutual fund scheme(s) with high risk profile (in the shares of BGF – WEF and BGF - NEF, an Undertaking for Collective Investment in Transferable Securities (UCITS) III fund). It will also invest 0-20% in money market securities and/or units of money market/liquid schemes of DSP BlackRock Mutual Fund with low to medium risk.
Load structure:
Regular Plan:
Entry load: The scheme will levy an entry load of 2.25% for investments less than Rs. 5 crore of the initial value of Rs. 10/- during NFO/applicable NAV during continuous offer. For investments of Rs. 5 crore and above, no entry load will be charged.
No entry load on direct applications, i.e. applications not routed through a distributor/agent/broker.
Exit load: 1% will be the exit load for holding period less than 6 months from the date of allotment. 0.50% exit load for holding period more than 6 months but less than 12 months from the date of allotment. While no exit load will be levied for holding period more than 12 months.
Institutional Plan: There will be no entry load and exit load.
Benchmark index: 70% MSCI World Energy (Net) and 30% MSCI World (Net).
Fund Manager: Aditya Merchant will be fund manager for the scheme.

Fund Action: Jubilant Organsosys; Rolta India; Yes Bank

Jubilant Organsosys: Deutsche Securities buys 19.16 lk shrs at Rs 120/sh.
Rolta India: Ward Ferry Mgmt sells 14.28 lk shrs at Rs 89.90/sh.
Yes Bank: Abhi Ambi Financial Svcs buys 40.9 lk shrs at Rs 82.50/sh.
Indiabulls Securities: Sandstone Cap India Master Fund buys 54.77 lk shrs at Rs 27/sh. Orient Global Cinnamon Cap sells 62.26 lk shrs at Rs 27/sh.Motherson Sumi: Samvardhana Motherson Fin buys 1.92 cr shrs at Rs 81.50/sh. Motherson sells 1.4 cr shrs at Rs 80.50/sh. Renu Sehgal sells 12.05 lk shrs at Rs 83/sh. Laksh Vaaman Sehgal sells 14.40 lk shrs at Rs 85/sh.
Ispat Industries: Jaypee Capital buys 4.08 lk shrs at Rs 13.90/sh.
K Sera Sera: Basmati Securities buys 2.2 lk shrs at Rs 10.35/sh.
Astral Poly: IDFC Mutual Fund 2.58 lk shrs at Rs 51.90/sh.
Parekh Aluminex: AAP Investments buys 3 lk shrs at Rs 56.10/sh. Merrill Lynch sells 3.47 lk shrs at Rs 56/sh.

Thursday, April 23, 2009

Debt funds may bounce back on RBI's rate cuts

Debt funds may soon be back in vogue, thanks to yesterday’s rate cuts by the Reserve Bank of India (RBI). Experts opined that long-term debt fund returns would become more attractive going forward.

RBI slashed repo rate by 25 basis points to 4.75 per cent and reverse repo rate to 3.25 per cent. Repo is the rate at which RBI lends to banks while reverse repo is the rate at which banks park their surplus money with the central bank.

Government bonds reacted positively with benchmark government yields dropping to 6.18 per cent today.

However, fund managers said the outlook for liquid funds remained gloomy as short-term money market rates have come down due to the excessive liquidity in the system.

“Liquid funds will toe the line of money market rates. Three-month liquid fund returns are expected to be in the range of 4-5 per cent and six-month returns would come down to 5 per cent,” a fund manager said.

According to Value Research online, the returns for ultra short-term debt funds have come down to 1.42 per cent for the 3-month period. Liquid plus funds are curently yielding 8.40 per cent returns for one year.

Arvind Bansal, CIO (multi-manager funds), ING Investment Management, said that short-term funds may not see much of an upturn in sentiment. “Short-term rates have already come down significantly and spreads are on the higher side. For long-term funds, there is still some room left and yields may go down further.”

Long-term gilt and bond funds are expected to be benefited largely from these cuts. Medium- and long-term gilt funds are giving returns of 16.18 per cent per annum. The best fund in the category is posting 40.59 per cent returns.

“Rate cuts have come as a positive surprise for the markets. The yield curve has shifted downwards and it bodes well for both gilt and bond funds,” said K Ramkumar, fund manager, Sundaram BNP Paribas Mutual Fund.

Financial planners say it is better to invest in a long-term floating rate fund now as it offers lower volatility.

Floating rate funds are currently offering 8.76 per cent returns for one year.

Monday, April 20, 2009

Allianz, Bajaj Fin in India asset management venture

Germany's Allianz will take a 51 percent stake in an Indian asset management joint venture with financial services firm Bajaj Finserv as it extends its operations in Asia's third-largest economy
The German insurer's planned entry comes after a fiscal year when assets under management in India's 35-member mutual fund industry fell as a slowing economy and turbulent financial markets hit investment valuations and detered retail investors.
Allianz joins the likes of South Korea's Mirae Asset and France's Axa who have entered the industry in the last two years. Goldman Sachs has deferred plans to start mutual fund operations in India, and many more are going slow.
"We are delighted to extend our partnership to the mutual fund business, which may take about a year to commence operations," Rahul Bajaj, chairman of Bajaj Finserv said in a statement.
Allianz has minority stakes in two Indian insurance ventures, Bajaj Allianz Life Insurance Co Ltd and Bajaj Allianz General Insurance Co Ltd, and had told Reuters last August it was in talks with the Bajaj Group for an asset management venture.
India's mutual funds industry managed about $83 billion at the end of 2008/09 fiscal year in March, down from more than $100 billion a year earlier, data from the Association of Mutual Funds in India showed.

Sunday, April 19, 2009

‘Stock prices reflected extreme pessimism’

In early March, there was a unipolar view that stocks would rally only after the elections. To us, that raised the risk of carrying high cash levels. We took a contrarian view that the markets could rally before the elections or maybe correct after it and deployed much of our cash. - SANJAY SINHA, CEO, DBS CHOLA MUTUAL FUND

Stock prices are reverting back to mean from a phase of extreme pessimism. But sectors which have bounced back in this rally may not be the ones which revive first, says Mr Sanjay Sinha, CEO of DBS Chola Mutual Fund, in an interview with Business Line. Mr Sinha also believes that with order flows from government projects likely to revive post-elections, this may not be the right time to hold a very defensive portfolio.
Excerpts from an interesting conversation:
There has been a view, based on economic data from the US, that the worst of this economic crisis is behind us. That is underpinning this stock market rally. What is your view on this?
There are three major pockets of economic activity in the world- the US is one and Europe and Japan are the other two. Data emerging from the US may be suggesting that it is now gearing up on a path of recovery. That cannot be said for UK and Japan as yet. Therefore, we cannot say with absolute confidence that the entire global economy is in a recovery mode. But the US does seem to be responding to stimulus measures and other steps taken by the government.
Is the current mood of optimism leading to the market ignoring negative news? The bad unemployment numbers from the US, for instance.
I believe the unemployment numbers would be a lag indicator of the economy rather than a lead indicator. Industries would first downsize in order to adjust to lower output; that is what reflects in unemployment data.
Once there is a productivity improvement, that reflects in better output and finally in the unemployment numbers. Going by that, there could even be further addition to the unemployment numbers. But an economic revival may well precede that.
The other part that you said, that the market is choosing to ignore data and is focusing on positive news alone; I do concede. But then, the markets tend to be more sensitive to the future than to the present or the past.
Therefore, if there is a sense of the macro economic conditions recovering, markets may begin to rally ahead of that. We have been in an extended period of pessimism. When one sees some vibrancy come into the market, then more optimism will come into the system. Factors such as the wealth effect leading to better spending and a better economy will follow.
But sometimes, these rallies are also false rallies. If you want to be absolutely certain of the outlook, then one would need to wait for the economic numbers to be consistently good for a period of time.
In India, the market has been buoyant though the earnings season is just round the corner. Do you think stock prices have discounted the worst case scenario on earnings?
If you see the way different sectors have corrected over the last year, prices do seem to have captured the differential impact (of the slowdown) on earnings of sectors. That is why some sectors such as real estate have corrected far more than others like, say — FMCGs.
But if you are talking of the recent rally, and asking if the stocks which have bounced back are going to see recovery ahead of others, that may not be the correct assessment. Investors are probably responding to just a low price, rather than to the sectoral outlook at this stage.
Is the market focusing too much on the near term? Cement and auto stocks have been marked up on the back of despatch and sales numbers over the last quarter.
I think cement and auto stocks had corrected significantly in anticipation that we will be in an extended downturn. But recent numbers seem to be negating that point of view. Stock prices are thus reverting back to their median levels.
If I have to extrapolate this to a broader market view, the overall market had given in to extreme pessimism, which was not warranted. India does have relative insulation from what is happening globally. That distinction needs to be made and is being made now. We do have elections coming up and that has put policy announcements on the back burner. That gives me optimism that policy imperatives will be pursued once the new government is in.
Regardless of what form that government will take, there are policy initiatives that will have to be taken. If you see the targets for the Twelfth Five Year Plan, we may now have to push through pending projects to keep to the timetable. You may see higher news flow after the elections on the order books of infrastructure and capital goods companies. That will have a cascading impact to connected sectors such as steel, cement and so on.
FIIs have been net buyers over the past month in Indian stocks. Is it correct to extrapolate this data and say risk appetite has revived?
Risk appetite has been restored globally, to some extent. Funds are flowing into the emerging markets and into India too. But to multiply a fortnight’s numbers and say that FII flows will be strong for year will not be realistic. The IMF and World Bank have both come out with the outlook that global GDP will be in positive territory for 2010, compared to 2009. If that is correct, the optimism will have to build up in the second half of 2009 itself. That could lead to better FII flows. India does continue to stand out as a great destination based on its macro outlook. I would not be surprised if 2008-09 ends with a positive FII flow as compared to 2008.
What stance have domestic institutions taken amid this rally?
The mutual fund (inflow) numbers have turned positive since the second half of March. There was also a fair amount of cash with mutual funds which is now getting deployed into stocks.
As far as insurance companies are concerned, there are two sets of strategies. The private sector insurance companies usually see a seasonal bunching up of inflows in the January-March quarter. That has largely been deployed in recent weeks.
On the other hand, public sector insurance companies have already deployed their funds and are playing a contrarian role in the markets, by being sellers. That’s why the ‘domestic institution’ action which you see in aggregate numbers show such fluctuation.
Many equity funds have not matched the benchmarks in this rally; but some of DBS Chola’s funds have. Why is this?
In the early part of March we saw that there was an unipolar view in the markets that stocks would rally only after the elections. To us, that raised the risk of carrying high cash levels. Therefore, we took a contrarian view that the markets could rally before the elections or maybe correct after it. Now, both these legs may play out.
The markets may rally in the run up to the elections on the back of global cues. We may come to a threshold level by the time election results are out. If the fear of an unstable coalition government at the Centre is not well-founded, then the markets may well gain momentum.
Basically, we took the call that timing the market to perfection may not be possible. Therefore, we almost completely deployed cash levels in our large cap funds. That paid off, because in the last rally, our funds have moved into the top quartile.
Are you sticking to a defensive position on your portfolios? What are your key sector bets now?
We had not created a very defensive position in our portfolio and therefore suffered in the meltdown. But the view we have to take now has to be prospective and not retrospective.
I believe that stocks or sectors that were battered for low order flows and so on would come back in a more stable scenario. We have created a portfolio around that. In alphabetical order, that would be auto, cement, construction, oil and gas and pharmaceuticals.

Share of foreign mutual funds’ asset base falls sharply

The share of mutual fund assets under management (AUM) by foreign and predominantly foreign companies in India has declined drastically over the last fiscal, ended March 2009.
Assets managed by foreign and dominantly foreign asset management companies (AMCs) have fallen to 11.5 per cent of the total AUM of the industry, from 20.6 per cent in March 2008.
In other words, foreign mutual funds which managed more than one-fifth of the total AUM of the industry last year now manage a little over one-tenth of it.
The Indian AMCs accounted for 79.39 per cent of the total asset base of the industry as on March, 2008, while this has come up to 88.5 per cent as on March, 2009.
The classification of AUMs as foreign/Indian or predominantly foreign/Indian is according to the segmentation observed by the Association of Mutual Funds in India (the fund houses which have been classified as predominantly Indian has been taken as Indian AMCs).
“We classify mutual fund houses as Indian or foreign based on the ownership pattern in the AMC’s, said Mr A P Kurian, Chairman, AMFI. “While we cannot make a generalisation as to why foreign AMC-assets have fallen drastically, this could be because these fund house could be having more redemptions and less inflows”, said Mr Kurian.
Also, some of them have a different business plan and focus more on big ticket, high networth individuals, said Mr Kurian.
Fund managers also observed that there was a shift in ownership of some AMCs, from foreign to Indian.
Standard Chartered Plc sold its asset management business to the Indian, Infrastructure Development Finance Company (IDFC) in March last year.
Similarly in November, Delhi-based Religare Enterprises Ltd (REL) acquired Lotus India Asset Management Company, a predominantly foreign joint venture.
Another reason, according to Mr Rajan Krishnan, CEO of Baroda Pioneer AMC is that “the visible growth has happened in the top five-six AMCs during the past one year, which are Indian or majority Indian-owned.”
The global troubles faced by companies such as AIG impacted sentiment towards global fund houses operating in India, said the Chief Executive Officer of a fund house.
In some cases these AMCs had parked their investments in a single instrument or put huge money in real estate which then back-fired when the real estate sector suffered, said another fund manager.

The dominant foreign players have been lying low or losing money, said Mr Dhirendra Kumar, CEO of Value Research. One reason for their fall in assets was that that they were heavy on equity schemes which suffered as a result of the market fall during the year, said Mr Kumar. Domestic players do not have such an intense presence in equity.
Foreign firms have lately come under cloud, added Mr Kumar. The market in India has become far less receptive to global fund houses or brands, he said.

Saturday, April 18, 2009

JM Auto Sector Funds announces changes in fundamental attributes

JM Financials Mutual Fund has approved the change in fundamental attributes of the scheme and its conversion from an Open ended sector scheme to an open ended equity scheme vided their resolution dated 7 April 2009 and 15 April 2009 respectively. The change in fundamental attributes include change in name, investment objective, investment strategy, benchmark index, asset allocation and other related matters of JM Auto Sector Fund. Accordingly the following changes are proposed in JM Auto Sector Fund with effect from 23 May 2009.
Details about the changes:
1. Change of name of the scheme to: JM Mid Cap Fund
2.Change of investment objective of the scheme: The investment objective of the scheme will be to generate long term capital growth at a controlled level of risk b predominantly investing in Mid Cap companies. Consequent to the above changes in the investment objective of the scheme, the scheme will undergo a change from an open ended sector scheme to an open ended equity scheme.
3. Change of asset allocation pattern of the scheme: Under normal circumstances the asset allocation of the scheme would invest upto 65%-100% in equity and equity related instruments with high risk profile and invest upto 35% in money market instruments / debt securities.
4. Investment Strategy: JM Mid Cap fund, as the name suggests will be a purely mid cap fund. It is an open ended growth scheme which focuses on investing in the midcap segment of the market with a disciplined investment approach. Being a growth oriented scheme, the scheme seeks to invest a substantial portion of its portfolio in equity and equity related instruments. Under normal circumstances, around 65% of the corpus shall be deployed in such securities and the balance in debt/money market instruments. However, whenever the valuations of securities rise in a sharp manner, the scheme will take advantage of trading opportunities presented and in such a scenario, the scheme will have a high turnover rate. The scheme will endeavor to use a mix of top down and a bottom up approach.
The strategy will be to identify stocks that can demonstrate strong growth over 3 year's horizon on the back of scalable business. The scheme seeks to achieve long-term growth of capital at controlled level of risk by primarily investing in midcap stocks. The midcap segment comprises mostly of companies that have been able to sustain themselves in the initial phases of growth. Since may companies out of this segment would show higher growth in future and move towards the large variety of business to choose from. Further, this segment is relatively under researched and hence offers an excellent opportunity for bottom-up focus thus enabling the spotting of winners ahead of the market.
5. Benchmark: The benchmark of the scheme would be – CNX Mid Cap Index
6. Fund Manager: The scheme would be managed by Mr. Sanjay Chhabaria

Investing in 'Grandfather instruments'

Generation, following the footsteps of their elders? There may be a few in a hundred, who would do so.
This holds good for financial planning too, and even going about choosing the type of financial instruments.
Youngsters normally prefer to invest in equities with greed to earn higher returns, as against investors belonging to the older generation, who look for stable and regular returns from investment instruments.
Young greedy investors, who had been fascinated by the dazzling skyward rally of the equity markets in early 2008, have witnessed their portfolio value virtually halving.
With their portfolio worth reducing, investors have been forced to look for avenues outside D-Street. “Which avenue to choose in this scenario?” is the question perplexing the investors, hit by the global meltdown and volatility of the markets.
Have we ever tried to consider and review investing into instruments used by our grandparents and people of the older generation? Most of us might have never thought of investing into instruments like Post Office Money back scheme, National Saving Certificate and the like.
We normally hear about them from our grandfathers, and senior citizens, particularly in the context of retirement planning. Lets thus call such instruments, as `grandfather` instruments, within the realm of our discussion on considering them as a prospective investment option, and try to review them as under : -
Public Provident Fund (PPF) scheme was introduced by the government in 1968. This `grandfather` instrument, can be opened by any individual assessee, while a guardian can open the account on behalf of minor.
A PPF account can be opened by any individual assessee. (Guardian can open the account on behalf of minor). Along with the exempt (Income Tax) interest of 8% per annum, calculated on the minimum balance from the fifth day till the end of the month, the investment tool also can be used for tax planning purpose, u/s 80C of the I.T. Act.
One can build a decent corpus by investing the principal amount over a period of 15 years. The minimum lock-in period is 7 years. On expiry of the 15 year duration, the PPF account can be prolonged for duration of 5 years at a time.
During the period, the minimum amount one can invest is Rs 500 and then in multiples of Rs 5. The maximum amount in a financial year can be Rs 70,000, in lump sum or installments.
PPF can also help you acquire a loan of up to a maximum 25% of the balance from the third financial year to the sixth financial year. However, the loan option is not available once you start withdrawing, that is sixth year after opening of account.
Post Office Monthly Income Scheme (MIS) is mostly opted by Voluntary Retirement Scheme (VRS) takers and retired people looking for fixed monthly income.
While PPF limits the account to one person, here, one can open multiple MIS accounts and each account can be converted into a joint account and vice versa.
MIS requires a minimum investment of Rs 1,500 or in multiples thereof. The upper limit for a single account is Rs 450,000 while that for a joint one is Rs 900,000. Alongside one can also claim a bonus of 5% on maturity. (Revised on Dec. 8, 2007)
However, unlike the case in PPF where interest is tax free, the interest income of 8% in this case is taxable. It is however not subjected to TDS (tax deducted at source) deduction. Also, the balance is exempt from tax. Alongside, one can claim a bonus of 5% on maturity of the instrument which is 6 years. (Earlier, it was 10%; the same has been revised to 5% with effect from Dec.8, 2007.)
National Savings Certificates (NSCs), are certificates issued by government of India that can be availed in the denominations of Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 at all post offices across India. This ‘grandfather’ instrument carries an interest of 8% which is compounded half yearly and has a maturity period of 6 years.
Though the interest of 8% is subjected to tax, a full amount of Rs 100,000 can be deployed towards tax planning exercise, eligible for deduction u/s 80C of the I.T. Act.
Kisan Vikas Patra (KVP) works in a similar way to NSCs and can be availed in same denominations across post offices in India.
They attach an annual interest rate of 8.25% and maturity period of 8 years and 7 month. They have been propagated as a safe route for investors who wish to double their investment. That is if one procures KVP certificate of Rs 100, one will earn up to Rs 200 on maturity.
While these instruments may be low on their returns aspect as compared to equities and mutual funds, they beyond all doubts, are backed by government, and hence are comparatively safer.
So `grandfather` instruments like these would prove to be safer and prudent to park your funds into, and improve the worth of your portfolio, particularly when the stock markets are highly volatile, as is the case in the current scenario.
Moreover, by investing in these instruments, you can follow the footsteps of your parents or grandparents and also build your retirement corpus.

Investment Mantras for Women

There are some myths about women when it comes to investment. Some of them are…
Women are not as active as men when it comes to investing money; they generally keep themselves away from taking investment decisions; they are well known for spending money or keeping it idle rather than investing it for earning more; even, non-working women are mostly dependant on their spouses for meeting their day to day expenses…
Though, to some extend its true that women are dependant on their spouses for finance, they should also think about their future. Problems don’t come giving prior notice. What if they face the situations of being divorced or widow?
In such cases the main problem for a woman is the regular flow of income to take care of their needs, provided they are not buck-earners. However, in the current scenario of layoffs, lack of job security and slowdown, even earning women can also face these problems.
As per the latest International Labor Organization (ILO) report, the deepening economic and job crisis across the globe is expected to increase the number of unemployed women by up to 22 million in the year 2009.
The global employment trends (GET) report by ILO indicated that, of the 3 billion people employed around the world in 2008, 1.2 billion were women (40.4%). It said that, in 2009, the global unemployment rate for women could reach 7.4%, compared to 7% for men.
Women should start thinking and understanding the importance of money and its investment aspect to avoid critical situations at any stage of their lives. They need to develop skills to plan for their financial needs.
Generally, women tend to keep cash idle rather than investing it. They tend to think that this `idle cash` can be easily used for contingencies and to spend on their personal care like beauty parlors and jewellery etc.
However, as an exception, few women do invest into risk-averse avenues such as bank deposits and post offices` schemes. They generally avoid risky options such as equities, as they think that it takes a rocket science to understand equity markets` trends, patterns and volatile nature.
Instead of worrying about the `complexity` of equity markets, they should equip themselves with the basic knowledge about investing to make fruitful investments.
Financial independence is a very crucial thing for women in today’s world. Women from different age groups should start investing from the early stages of their lives to secure the future and for better lifestyle.
Below are the various investment options for women from different age groups.
Age group 20 - 30 years
You can call this stage as `Young Unmarried Stage`. Women from this age group can plan their future very well as there are various investment options available suiting their needs at this stage. Investing in equities is perhaps the best option for the women at this stage.
Equities are well known for growth and good returns, provided the markets are doing well. The dividend income from equities can also help them to earn regular income. They can follow intraday trading and buy today sell tomorrow (BTST) strategies. Other investment options for this group are derivatives, F&O and equity linked mutual funds.
Age group 30 - 40 years
This stage is called `Young Married With Children Stage`. In this stage women have to think about their children also. To secure the future of their children they should opt for the investments options which suit them. There are different categories of mutual funds and insurance policies like educational plans. Women between this age group should go for such plans.
Age group 40 – 50 years
This is `Married with Older Children Stage`. As children become old, parents have to keep funds ready for their higher education and marriage. This is a very crucial stage for any parent as their children’s career depends on their education and parents have to arrange funds for their education.
Accordingly women should opt for the investment options like insurance plans for the marriage and education purposes.
Age group 50 – 60+ years
This stage is called `Retirement Stage`. At this stage, women can invest into less risky and safer investment options such as PPF, NSC, Post Office Saving Schemes and debt instruments for the steady flow of income at the later stages of lives.
A word of advice
Before making any investment, women need to do the cost benefit analysis of their investment options. They should analyze the risk associated with it, its liquidity and safety aspects. They just need to understand the basics of investing and opt for the right kind of avenues which will suit them. If they follow the basics, no doubt, a woman can also be as good investor as a man!

India well placed to benefit from improving int'l mkt: Fidelity

Fidelity International said attractive share valuations indicate the bearish phase in global markets may be over and India is well placed to benefit from the improving global environment.
"My belief that the market is bottoming out is underlined by attractive valuations, market sentiment and by looking at current market conditions in relation to the historical bear and bull market cycles," Fidelity International President Investments Anthony Bolton told reporters.
About India Bolton said the country's economy was largely domestic consumption-led, which meant that it has been less affected by the deceleration in global growth.
"As an economy that has continued to grow in spite of unprecedented turmoil in the global economy, I think India is well placed to benefit from an improving global environment," he added.
Fidelity International has a presence in India through Fidelity Mutual Fund, which launched its first fund in 2005.
Talking about the company's growth over the last four years, Ashu Suyash, Managing Director and Country Head India, Fidelity International, said, "as one of the fastest growing among the new asset management companies, we are delighted with the progress we have made over a short span of time.

Friday, April 17, 2009

Reliance Mutual Fund Under Performs The Time Periods

Background:
Reliance Capital Limited is the sponsor of Reliance Capital Assets Management Ltd set up in June 1995. Reliance Capital Ltd. is a member of the Reliance Group and has been promoted by Reliance Industries Limited (RIL), one of India's largest private sector enterprises. The fund house manages assets worth Rs 80962.94 crore at end of March 2009.
Reliance Growth Fund (G) an open-ended equity scheme launched in September 1995. The investment objective of the scheme is to achieve long-term growth of capital through a research based investment approach. The minimum investment amount is Rs.5000 and in multiples of Re.1 thereafter. The unit NAV of the scheme was Rs 233.32 per unit as on 13 April 2009.
Portfolio: The total net assets of the scheme increased by Rs 152.02 crore to Rs 3239.85 crore in March 2009.
Reliance Growth Fund (G) took fresh exposure to two stocks in March 2009. The scheme purchased 8.98 lakh units (1.72%) of Financial Technologies (India), 7.32 lakh units (1.47%) of United Spirits in March 2009.The scheme completely exited from Cambridge Solutions by selling 56.00 lakh units (1.44%) in March 2009.
Sector-wise, the scheme took no fresh exposure to any sector in March 2009.Sector-wise, the scheme did not exit completely from any sector in March 2009.
The scheme had highest exposure to Lupin with 21.53 lakh units (4.58% of portfolio size) followed by Reliance Industries with 7.86 lakh units (3.70%), Divis Laboratories with 12.02 lakh units (3.54%) and Jindal Steel & Power with 9.27 lakh units (3.44%) among others in March 2009.It reduced its exposure to State Bank of India by selling 1.98 lakh units to 6.13 lakh units (by 0.68%), Divis Laboratories by selling 1.88 lakh units to 12.02 lakh units (by 0.37%), Jain Irrigation Systems to 21.87 lakh units (by 0.27%) and Bharti Airtel by selling 4025 units to 11.64 lakh units (by 0.16%) among others in March 2009.
Sector-wise, the scheme had highest exposure to Pharmaceuticals - Indian - Bulk Drugs at 8.12% (from 8.47% in February 2009), followed by Banks - Public Sector at 4.90% (5.54%), Computers - Software – Large at 4.19% (4.26%) and Telecommunications - Service Provider at 3.89% (3.94%) among others in March 2009.
Sector wise, the scheme had reduced exposure to Banks - Public Sector to 4.90% (by 0.64%), Pharmaceuticals - Indian - Bulk Drugs to 8.12% (by 0.35%), Plastics Products to 2.31 % (by 0.27%), and Sugar to 1.98% (by 0.08%) among others in March 2009.
Performance: The scheme underperformed the category average over all the time periods.
Over three-month period ended as on 13 April 2009, the scheme posted returns of 14.25% underperforming the Sensex that posted returns of 20.90%. Over 6 month period, the scheme's returns dropped to 3.34% underperforming the Sensex that fell 3.02%.
The returns of the scheme over one year period fell 30.92% underperforming the Sensex that plunged by 30.62%.

ETFs V/s Mutual Funds

You must have heard from people that the gold ETF was the best investment in 2008! Are you aware what a gold ETF is? Let us first know what basically an ETF is.
ETF is the abbreviation for exchange traded fund, a financial instrument that tries to imitate its benchmark index by investing in stocks in the same proportion as that of the benchmark index.
On other hand a mutual fund is a trust that pools the savings of a number of investors and invests the collected money.
You can say that an ETF is similar to an index mutual fund which also invests in stocks in the same proportion as that of the benchmark index. So Nifty BeES ETF by Benchmark Mutual Fund invests in the same stocks as that of its benchmark S&P CNX Nifty Index.
You may be wondering how are ETFs different from mutual funds, as both collect money from investors and invest in scrips or other assets like gold.
The factors in which these two differ from each other are
Low cost:
ETF have lower cost as they are generally passively managed and invest only in index based stocks. They don’t trade, buy or sell stocks frequently, and the proportion for investment in each scrip is normally fixed, based upon the weightage of that scrip in the index.
Thus, ETF requires low management expertise as research and marketing expenses are less.
Mutual Funds on the other hand are more dynamically managed and hence have a higher expense ratio. Fund houses spend a lot of money on research of scrips. They buy and have a tendency to churn the scrips more frequently.
Take this for example Nifty BeES has a cost structure of around 0.50% as compared to 1.25% of ICICI Prudential Index Fund. Apart from management costs, mutual funds also charge entry and exit load which take almost 2% out of your total investments; whereas in ETF, you have to pay only brokerage charge.
Liquidity:
ETFs can be sold or bought like stocks during market hours, unlike mutual funds which can be bought and sold only at the day’s end as per their calculated net asset value (NAV).
To understand the above, lets us assume, if you want to redeem your investment on a particular day for some monetary need and by sheer bad luck the market begins to fall. As ETFs are traded on the markets you can minimize your loss by immediately selling your ETF.
Had you wanted to redeem from a mutual fund you would have had to wait till the end of the trading session for the generation of NAV; by the time the market might have fallen substantially, leading you to suffer a higher loss.
Long-term investor protection:
the stock exchanges, thus Asset Management Company managing the ETF is not involved in the transaction. However, in case of mutual fund, units are purchased and sold by the Asset Management Company.
This may lead to investors suffering if there is a large exit of money from the scheme as was witnessed in many mutual fund schemes during the October-November 2008 period. During the period, long term investors had to suffer, due to large outflow of funds from schemes which led to many fund managers selling their best assets in fire sales.
Thus, ETF protects long-term investors` value as assets are not sold even when there is large selling seen in ETFs.
Low tracking error:
ETFs have very low tracking error, which is the difference between the returns by funds measured against its benchmark index. This is because, ETFs invests in stocks that constitute the benchmark index, in the same proportion as their weightage in the index. Also the gap between ETF`s NAV and market price is less because of arbitrage opportunities which traders take advantage of.
On the other hand, mutual funds are not so keen to invest in stocks in the same proportion of the benchmark index of the scheme, and mostly deviate from the returns posted by the index. Index funds have high tracking error as there is no arbitrage between the funds` NAV and market.
Thus, if you believe that index will gain, have limited funds to invest in stocks, and not comfortable with any particular scrip, then exchange traded fund will be the right investment option.

Thursday, April 16, 2009

What are the kind of stocks/sectors one should be buying now?

Find below views of Mr. Sandip Sabharwal
Part I - The anatomy of the bear
As I sit to analyze the kind of stocks and sectors one should be buying into at this point of time with a medium term perspective it is important to analyze the anatomy of the bear market. In order to do this I would first go back to the last phase of the bull market, which was the main phase of excesses and extreme euphoria.
Epilogue – The big blow off - This phase started from the month of September 2007 and lasted till January 2008. This was the period in which the Sensex went up from around 14500 to 21000. This was the time period in which valuations went up ridiculous levels, there was a huge deluge of money from hedge funds, there was extreme leveraging and retail investor frenzy was at its maximum. At the risk of repeating this was also the period in which even most professional fund mangers could not see the fact that the bubble had become so big that it had to burst. The genesis of the last phase of the bull market lay in the beginning of the rapid monetary easing by the US Federal Reserve subsequent to the start of the mortgage crisis and the beginning of the emergence of the financial crisis in the US and Europe. As a very good friend of mine puts it “ This was a phase where as the easing cycle started a large number of hedge funds thought that the liquidity is now going to over flow from a glass that was already full, without realizing that there was actually a very very big hole in the glass”.This was the phase of the market where fundamentals were of no relevance and companies with grand plans and worst cash flows outperformed most of the other stocks. In this phase the BSE Mid cap index went up from 6000 to 10000 level a gain of a whopping 66%.
I will break up the bear market of the last 15 months into three parts
PART 1
The end of Euphoria – January to September 2008 – This was the first phase of the bear market and was pre Lehman Brothers collapse. In this phase there was a sudden reversal of liquidity flow and was also the phase in which commodities kept on rallying ( till around July to September depending on the commodity we are talking about) and was the phase in which inflation was a bigger concern in most emerging markets and euro zone. In this phase there was a very rapid increase in policy rates by central bankers all over the world as crude, copper, steel prices etc kept on rallying in the backdrop of a slowing global economy and reducing liquidity. This was the phase in which most market participants underestimated the scale of the problems in the financial systems in the Western economies and in general loss levels were underestimated. Economies all over the globe kept on moving from bad to worse in this period. However this was also a period in which lot of emerging market economies were believed to be relatively insulated and their suffering would only be due to collateral damage. This was the time period in which both mid cap and large cap companies fell in value. However this was also a phase where there was some sort of distinction in the markets between companies that would be relatively insulated from the slowdown effect. Companies that had good order books or a good execution history were relatively spared in the carnage. This was sort of a normal bear market phase in which markets fall by 25-30%.In this phase hedge funds faced huge redemption pressures and most emerging markets saw significant outflows. In this phase which lasted till the middle of September 2008 the Sensex fell by 30% and the BSE Mid Cap index by 45%.
PART II
End of liquidity and execution disbelief – September 2008 to January 2009 – This was the period in which financial institutions in the USA started collapsing. Although smaller companies were collapsing the big one like Lehman hit everyone on the head. This led to liquidity totally drying up globally. The three month LIBOR shot up to nearly 4%, yields on US Treasury bills became virtually zero as capital preservation became the prime focus. This was the time period in which there was forced selling from a large number of FII’s and Hedge Funds due to the virtual collapse of the financial system in Western economies. There was extreme panic in the month of October/November 2008 and led to the formation of a panic bottom in the markets in October 2008. This was also the phase till be beginning of December 2008 where there was a virtual collapse in mid cap stocks although large cap stocks started stabilizing after making the panic bottom. In this phase valuations were of no importance. There was huge execution disbelief and due to the liquidity crunch the market started doubting the execution ability of projects that were already awarded. In this phase order books lost their relevance and most market participants started believing that things will never improve. This was the time when central bankers globally started cutting rates aggressively and also started pumping huge amount of liquidity into the system. However the fear was so high that nothing seemed to have any impact. Markets started to improve from the beginning of December before Mr. Ramalinga Raju burst into the scene in the first week of January.In this phase companies with high debt levels, requirements of refinancing, high forex exposure, requiring large working capital fell the most.In this phase the Sensex fell by another 35% and the BSE Mid cap index fell by another 40%.
PART III
Total Disbelief and the lack of confidence – January 2009 to Beginning March 2009 – Even as markets had started stabilizing from the beginning of December 2008 the Satyam scam broke out and this combined with the process of change in regime in the USA and a constantly deteriorating scenario in the economic scenario globally led to the virtual “Falling off the cliff” of the markets, specially on the mid cap space. This was the phase in which no one wanted to own any mid cap stock and even large cap stocks with suspect accounting standards or suspect managements saw their stock prices crashing extremely badly. This was a phase in which most Western economies stock markets made new lows and most emerging markets held on to their October lows in term of large cap indices. However mid caps continued their free fall. This was the phase in which I believe that mid caps finally bottomed out as investors who were still holding out finally lost patience and sold these stocks at dirt cheap valuations. This was the phase which was the total reverse of October 2007 to Jan 2008 where investors just wanted out of mid caps. This was also the time in which investors wanted to stick to the bluest of blue chips and risk perception was the highest.In this phase companies with suspect management practices, suspect accounts, commodity companies or those with exposure to the Middle East countries fell the most.In this phase the Sensex fell by around 23% and the BSE Mid Cap index fell by around 30%.
In the second part of the article I will talk of what are the segments of the markets to buy into now.
INCIDENTLY MARKETS ARE LOOKING OVERSTRETCHED IN THE NEAR TERM. SHOULD GIVE UP SOME GAINS.

Wednesday, April 15, 2009

SBI Mutual Fund cuts minimum investment limit in 4 funds

State Bank of India's mutual fund unit on Wednesday lowered the minimum monthly investment limit in select funds to 100 rupees, joining the likes of UTI Mutual Fund and ICICI Prudential Asset Management.
The funds are Magnum Balance, MMPS-93, MSFU Contra fund and SBI Blue Chip fund.
SBI Mutual Fund hopes to attract about 250,000 investors in the first year with this initiative, SBI chairman O.P. Bhatt said.
Typically, the minimum investment into Indian mutual funds is 500 rupees, but an increasing number of money managers are lowering the investment threshold, in a bid to attract small investors from tier II and tier III cities.
Source: http://in.reuters.com/article/domesticNews/idINBOM28785320090415

Tuesday, April 14, 2009

UTI AMC attracts bids from 4 investors; valued at Rs 3,500 cr

The highest bid has valued UTI AMC at around Rs 3,500 crore, which is around 7.3% of the assets under management.
Schroders, Vanguard Mutual Fund and T Rowe Price have reportedly submitted bids to acquire 26% strategic stake in UTI Asset Management Company (UTI AMC), India’s oldest and fourth-largest fund house.
The highest bid has valued UTI AMC at around Rs 3,500 crore ($690 million) which is around 7.3% of the assets under management (AUM), The Economic Times reported today.
UTI AMC has four shareholders State Bank of India (SBI), Life Insurance Corporation of India (LIC), Bank of Baroda (BoB) and Punjab National Bank (PNB), holding 25% stake each.
It was formed six years ago when the government was forced to restructure the erstwhile Unit Trust of India, following a payments crisis. Its assured return schemes were transferred to a separate company called Special Undertaking of UTI (SUUTI), and the rest was moved to UTI AMC.
The latter’s four state-owned shareholders had acquired the firm from the government for Rs 1,250 crore. The ET report adds that each of these four shareholders will sell part of their stake to the strategic investor instead of a fresh issue of shares.
The plan to induct a strategic partner in UTI AMC was announced last year by the former finance minister P Chidambaram. UTI AMC had even toyed with the idea of a public float but this didn’t materialise as the markets turned turtle.
It had originally considered a private placement followed by an IPO that would have brought down the stake owned by its four shareholders to 51%.
The shareholders had planned to raise around Rs 2,500 crore last year that would have valued the asset management firm at Rs 6,500 crore. The bids which are reportedly submitted for the strategic stake now values UTI AMC 46% lower than this.
Among those who had courted the firm earlier include Japan’s Shinsei Bank and the National Australia Bank. Shinsei has since then joined hands with private investor Rakesh Jhunjhunwala to launch a mutual fund venture in India.
There were a couple of deals involving mutual fund houses last year where Religare Enterprises bought out Lotus AMC and IDFC acquired Standard Chartered’s asset management business in India.

30% cap on MFs' exposure to money market papers

In a bid to reduce concentration risk for mutual funds, the Securities and Exchange Board of India (Sebi) On Monday said that funds’ exposure to money market instruments of an issuer will be capped at 30 per cent of its net assets. Schemes can, however, continue to invest up to 15 per cent or 20 per cent of net assets, as the case may be, in other investment grade debt instruments of an issuer.
“These limits will not cover investments in government securities, T-Bills and Collateralised Borrowing and Lending Obligations (CBLO),” the market regulator said.
A large number of schemes, including FMPs, had invested heavily in debt instruments of a single company. Such kind of exposure to the money market instrument of a single issuer made these schemes risky for investors in the event of a default. According to a Crisil report, nearly one-third of fixed income funds have parked more than one fourthof their assets in one company.
Huge exposure to a single company leads to non-diversified portfolio. The report further said that 38 per cent of the debt schemes have significant exposure to the NBFC sector.
While the mutual fund industry has applauded the move, there are still a number of schemes that have invested a sizeable portion of their net assets in a single company. For example, Birla Sunlife FTP series AL retail plan has invested 24.73 per cent in Wockhardt. Similarly, HDFC's 18M Jan2008 retail FMP has put in 23.36 per cent of its net assets in Tata Motors.
Parijat Agrwal, head of fixed income at SBI Mutual Fund, said, “This is a step in the right direction for mitigating risk. Mutual fund portfolios will now become more structured.”
However, experts say that even the 30 per cent limit is very high as funds can invest 15-20 per cent in debt instruments of an issuer, which will take the total exposure to 45-50 per cent.

Monday, April 13, 2009

India is better placed compared to global economy: Nanavati, Religare MF


Saurabh Nanavati is the CEO, Religare Mutual Fund where he oversees all functions including investments, operations and sales. Saurabh`s last assignment was with HDFC Standard Life Insurance, as chief investment officer overseeing USD 2 bn in equity and debt investments besides other asset classes. Prior to HDFC Standard Life Insurance, he was with Deutsche Asset Management for little under 4 years. His earlier assignments also include stints with multinational institutions like Reuters and HSBC India. Saurabh holds an Electronics Engineering degree and is an MBA in Finance from Jamnalal Bajaj Institute of Management Studies.Here are some excerpts from an exclusive interview with Saurabh Nanavati.
What investment philosophy does Religare Mutual Fund follow to provide value to investors? Is it different for a bull market or a bear market?
The 2 broad tenets of our investment philosophy are ``Active Fund Management`` and ``Being True to Mandate``.
Active Fund Management - Our Core Investment premise is that the Equity Markets are not completely efficient and therefore a well organized and thorough research effort combined with a disciplined portfolio management approach will enable outperformance of the market index over time.
True to Mandate - The fund`s investment mandate is paramount. We do not have a style bias. The Stock selection, industry and asset allocation will flow from the fund objectives.We do not have a different style for a bull market and a bear market.
What are the attributes you look for in stocks before taking a buy or sell call? Also give us an idea about your research team.
We have a proprietary stock categorization model. We categorise stocks into 7 different categories - Star, Leaders, Warriors, Diamonds, Frog Prince, Shot Gun and Commodity.Each category has a detailed description of the kind of fundamental attributes that we expect the company to possess. This approach helps the fund managers to focus on the attributes that drive stock performance and keep a watch for red flags.

As regards the investment team, we have a clear segregation between fund managers, analysts and dealers. We have 3 fund managers, 4 analysts and 1 dealer at present in the AMC team and an additional 2 Fund Managers on the PMS side.The analysts track roughly 280 stocks at present and we are looking at increasing the coverage by another 40 stocks in the next 3 months.

Give us your outlook for the markets in 2009? Will we see the effects of global financial crisis receding?
The first three months of 2008 were good but the situation deteriorated in the next nine months. This year, 2009 may see 12 bad months and the situation might continue even to the first half of 2010.
The global financial crisis is going to take a long time to resolve and the growth paradigm of mercantilism wherein the developing world produces goods and services to meet the insatiable appetite of the US consumer may never take centre stage again.

Capital flows are also likely to remain subdued due to risk aversion. Further, the governments of the western world who are injecting capital into their banks would like them to keep that capital at home. This crisis has heightened the risk of protectionism in the US and other developed markets as they are under public pressure to do whatever it takes to halt the decline.

However for India, the agenda must be the opposite - we must tear down the red tape and barriers that act as a hindrance to foreign capital. But we must also be vigilant to ensure that our economy and businesses are protected against unfair trade.

What are your predictions on the interest rate movement over medium term? Could you share your perspective on the Indian bond markets for 2009 given the continuous monetary easing and increasing government borrowings?

In the second half of 2006, RBI had then indicated its concerns regarding credit growth and started raising interest rates. But the economy did not feel the pinch of rising interest rates because foreign money was flooding into the system. In FY2007 total foreign capital inflows surged to over USD 50 billion and then doubled to USD 108 billion in FY2008. To put this in perspective the capital inflows in FY2008 were an 8 fold jump compared to the inflow in 2002.

The RBI continued to hike rates in the first half of 2008 and the economy was slowing in response to that. But the slowdown has morphed into an abrupt halt with the collapse of the banking system and credit markets in the western world which started in late 2007 and is still ongoing.

RBI has since changed its stance to a pro-growth strategy in Oct 2008 and started cutting interest rates. We feel that the rate cut stance will continue up to Sept 2009 and we can expect another 100 bps reduction in Repo, 150 bps in Reverse Repo and 50 bps in CRR in the coming months.

Bond yields have however factored in some of these cuts, and we feel that the 10 year yield may not rally beyond 5.50% from 6% currently, in an absolutely bullish case beyond 5.25%. This is because of increased government borrowings. We expect government borrowings to exceed their projections for next year as there will be a fall in direct and indirect revenue collections due to the downturn.

What is your approach for investing in government and corporate papers? How much do you rely on external credit rating while investing in the corporate paper?

Our fixed income philosophy is based on 3 parameters - Safety, Liquidity and Consistency.Again we have a defined investment philosophy and process, with clear segregation between credit analysts, fund managers and dealers. We currently have 2 credit analysts, 3 fund managers and 2 dealers.Credit analysts rely on external credit as a starting point post which they do their own internal analysis.Both in equity and debt, if the respective equity analysts and credit analysts do not approve of a security, the portfolio manager cannot buy it in his portfolio.Due to an increased risk aversion globally, government paper and corporate paper spreads have increased to around 300 bps from 150-200 bps earlier. We feel that the spreads may not compress to earlier levels for the next 18-24 months. However, a higher spread means a higher yield and therefore if the credit analyst has done his job well, it will enable the fund manager to buy the Corporate paper and earn a higher yield for the investor.

According to you what lessons should we take from the India`s biggest fraud at Satyam?Recent report by CRISIL substantiates weak governance practices in 50% of the 29 IPO graded by them since May 2007. How do you rate India Inc on corporate governance parameters?

At a philosophical level, India was always taking the higher moral ground as compared to the developed markets, that 50% of the Sensex companies were promoter owned, faster decision making and great corporate governance. This has been shattered after the Satyam episode. So when analysts say Satyam was an accident, I disagree. Investors have lost faith in our corporate governance standard currently and the whole market will suffer because of this episode.We clearly have issues on corporate governance parameters and I personally feel, that there will be some startling disclosures in the next 12 months by India Inc. Auditors too will tighten their requirements and not sign off easily on grey areas, forcing more disclosures.

Recent quarters showed significant drop in corporate earnings on back of higher input and fund cost. Going forward, what is your take on FY10 earnings? Will it continue to fall?

For the last 6 months, we have been communicating a 5-10% EPS de-growth from FY08 to FY10, to the market. This is for the Nifty stocks. The broader markets may have a higher earnings fall. Six months back, analysts consensus were talking of 15% growth and currently they have brought down these estimates to flat growth. We are yet sticking to our stance of a 5-10% earnings fall in this period.Difficult to predict when this will turn but our sense is we are at least 18 months away from a trend reversal.

With the impact of global economic meltdown started reflecting into domestic economy, how do you see the economic outlook moving ahead?

India is yet much better placed as compared to the global economy. But it may be difficult to meet the growth projections of 5.5-6% growth for FY10. Even assuming a normal and good monsoon, our expectations would be around 4-4.5%. There will be a definite slowdown in the services sectors and manufacturing sectors due to reduced demand. Job losses will peak between April to Sept 2009 and this will curb demand growth at the ground level.Looking at the positive side, there are three factors which should aid India decouple itself from this global recession after 12-18 months.a) Sub-prime - Due to RBI`s conservative policies, India is actually not having a major sub-prime kind of an issue - of home loan defaults and banking collapses at the ground level. This is a big positive. India yet has a financial system intact as compared to the rest of the world.b) Rural Consumption - This theme is definitely intact and will be largely responsible for India`s 4-4.5% GDP growth rate. The pay commission increase of last year will reflect in increased or stable rural spending.c) Political Reforms - The third factor will definitely be the elections and the new government stance. Difficult to talk of the outcome but the industry will need to be fleet-footed in terms of anticipating and understanding the new government`s stance on issues, as well as their powers to push reforms in a coalition situation.

What are challenges faced by the MF industry in the current scenario? How do you plan to overcome these challenges? What is your outlook for the MF industry in 2009?

MF investors are facing a confidence crisis at this point of time, post the Sept-Oct 2008 liquidity crisis. We will also see consolidation in the mutual fund industry in the coming two years. This business is for the long-term serious players only and carries fiduciary responsibility. I am sure promoters have now realized this and are re-visiting their business plans.From our perspective, it is time to get back to basics. Simple products, customer education, increasing visibility, strong platform to deliver consistency and shareholder commitment. Small innovations sometimes deliver fantastic results. All these are our focus areas.I am sure the industry will emerge stronger at the end of 2009. Let me assure you that the transparency levels are yet the highest by far in this industry and customers will appreciate it, once the risk appetite comes back.

Religare AMC is relatively new in the MF industry, what are your plans for scaling up the business?

Of the three existing business models in India AMC Industry - Retail, Institutional and Quasi-Institutional, Religare AMC has adopted the Retail Business Model. With the acquisition of Lotus Mutual Fund, Religare AMC now has a presence in 38 cities through 41 own branches. We intend to set-up a further 62 branches in 62 cities in the next 18 months to increase our network to a 100 cities. With a presence in 100 cities through own branches, Religare will be in the top 7-8 AMCs from a distribution reach perspective. It is important to understand the difference of having your own branch and having a presence through the registrar offices which are in over 150 locations.

Apart from managing fund house, what other things you like to do?

Spending time with my children (aged 5 and 2), reading economic articles and cricket. Proving skeptics wrong, in every walk of life, is also what I enjoy the most. I am going back to the movie ``Matrix``, where Keanu Reeves was told that ``this has been never done before`` to which he replied ``that`s why it will succeed``.


Source: http://www.myiris.com/newsCentre/storyShownew_opt.php?fileR=20090413142504196&secID=fromnewsroom&secTitle=From%20the%20News%20Room&dir=2009/04/13