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September News Letter

September News Letter

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Published by satish kumar

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Published by: satish kumar on Dec 08, 2011
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12/08/2011

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Karvy Research Desk For private circulation only
 
1
MMoonntthhllyyNNeewwssLLeetttteerr 
 
PF/MFNL/17102011/753
 
October 17, 2011
 
For more information contact:Shivram Yedithi,
Email: shivram.y@karvy.com
Neelima Bajaj,
Email:
 
neelima.bajaj@karvy.com
:+91 40 4467 7542,
Production:
Raju A
Equity Market Roundup:
Indian markets ended in red for the third consecutive month withSensex and Nifty losing 1.3 and 1.2% respectively. Same was the casewith Global markets which shed some significant points. Theturbulence in the markets was seen globally with fears over USrecessionary expectations and continued saga of European Debt crisis.While entire world is facing slowdown in growth, Asian marketspredominantly China and India have been facing inflationary pressuresas well. RBI came up with a further rate hike to add up to theircontinued fight against ever growing inflation. Good rainfall and
Moody‟s positive outlook on Rupee denominated bonds failed to ignite
positive sentiments among investors, and weak IIP numbers andglobal cues played major role in continued downslide of markets.Another major concern for the month of September was weakening of Rupee which many have owed to the reduced inflows and net outflowof FII money. Fresh bail out being planned for Greece to fight defaultand US urging into taking strong steps to fight unemployment andrecessionary concerns along with Q2 results will play major role indefining market direction for the month of October.
Debt Market Roundup:
The month was marked by two major events in the month of September, RBI continuing rate hike of policy rates and then at theend of month when government announced borrowing of additionalRs.53000 Crores in the second half of the year.Hike in policy rates had a short term impact on the G-secs with 10year benchmark yields spiking up and then settling down in the range8.25-8.30% till the last day when government announced additionalborrowing program which again sparked yield to close at 8.42.Corporate bonds were steady with only slight movement. Withmajority considering September hike to be end of cycle will bewatching at inflation numbers, IIP numbers which will form basis forthe action taken by RBI when they meet again for monetary policyreview on 25th October. Global growth moderation and domesticfactors will drive the debt and money markets.
 
CONTENTS
Equity & Debt Market Roundup :1Ongoing and Upcomin
g NFO‟s
:2Synopsis & Infra bonds :3Tax free bonds & ELSS schemes :4FD schemes :5
 
Equity Funds Performance :6Debt Funds Performance :7Indices Watch :8
MF Activity:
 
Equity DebtDateGrossPurchase(Cr.)Gross Sale(Cr.)Net (Cr.)GrossPurchase (Cr.)Gross Sale(Cr.)Net(Cr.)
02-Sep-11 to 30-Sep-11 9649.2000 10426.5000 -777.1000 86020.8000 62815.3000 23205.8000
FII Activity:
 
Equity DebtDateGrossPurchase(Cr.)Gross Sale(Cr.)Net (Cr.)GrossPurchase (Cr.)Gross Sale(Cr.)Net (Cr.)
02-Sep-11 to 30-Sep-11 47722.0000 47880.5000 -158.3000 17146.2000 18854.0000 -1707.4000
 
 
Karvy Research Desk For private circulation only
 
2
MMoonntthhllyyNNeewwssLLeetttteerr 
 
PF/MFNL/17102011/753
 
October 17, 2011
 
For more information contact:Shivram Yedithi,
Email: shivram.y@karvy.com
Neelima Bajaj,
Email:
 
neelima.bajaj@karvy.com
:+91 40 4467 7542,
Production:
Raju A
 
LIST OF ONGOING & 
UPCOMING NFO’
s
NFO’s
:
Tata Retirement Savings Fund:
 
NFO Opens
07-Oct-2011
 
 
NFO Closes
21-Oct-2011
 
 
Fund Type:
An open-ended Fund
 
Fund Class:
Asset Allocation Fund with three sub plans suited for different age groups
 
Minimum Investment:
Rs.5,000
 
Objective:
To provide a financial tool for long term financial security for investors based on their retirementplanning goals.
IDBI Gold Exchange Traded Fund:
 
NFO Opens
19-Oct-2011
 
 
NFO Closes
02-Nov-2011
 
 
Fund Type:
An open-ended Exchange Traded Fund
 
Fund Class:
Gold
 
Minimum Investment:
Rs.10,000
 
Objective:
 To invest in physical Gold with the objective to replicate the performance of Gold in domesticprices. The ETF will adopt a passive investment strategy and will seek to achieve the investment objective byminimizing the tracking error between the Fund and the underlying asset.
HDFC Gold Fund:
 
NFO Opens
07-Oct-2011
 
 
NFO Closes
21-Oct-2011
 
 
Fund Type:
An Open-ended Fund of Fund Scheme
 
Fund Class:
Gold
 
Minimum Investment:
Rs.5,000
 
Investors without Demat Account can apply.
 
Objective:
To seek capital appreciation by investing in units of HDFC Gold Exchange Traded Fund (HDFCGETF).
 
 
Karvy Research Desk For private circulation only
 
3
MMoonntthhllyyNNeewwssLLeetttteerr 
 
PF/MFNL/17102011/753
 
October 17, 2011
 
For more information contact:Shivram Yedithi,
Email: shivram.y@karvy.com
Neelima Bajaj,
Email:
 
neelima.bajaj@karvy.com
:+91 40 4467 7542,
Production:
Raju A
 
SYNOPSIS-TOPIC FOR THE MONTHSave Tax and earn attractive returns as well:
It is that time of a year when people start looking for the investments for tax saving purpose. It does make sense tostart early to plan allocation of the one lakh which can be saved in variety of instruments depending on theanticipated risk and returns. There are various tax saving instruments apart from traditional PPF, NSC, KVP whichfall in Low risk low return criteria.ELSS, Equity Linked Savings Scheme funds as name suggests is tax saving product linked to the equity markets.This gives better returns but is riskier when compared to the traditional instruments. Thus, it may not be advisableto invest entire one
lakh into ELSS funds but can be a part of everybody‟s portfolio. One assuming higher risk can
have 50% and one with conservative outlook may go for 10-20% of ELSS funds in their tax saving portfolio. Giventhe tax saving feature these funds have a lock-in period. It is advisable to consult your financial advisor or do athorough study of the funds before choosing from the universe of funds available.When investing in an ELSS funds, one more factor which can be looked at is the Dividend part. Since these fundshave lock-in, if dividend option is chosen one can get tax free dividends prior to the lock-in as well.Apart from the one lakh savings, Government has introduced Long term infrastructure bonds wherein one can investand save additional tax on Rs.20,000. A Rs.20,000 investment in Infra Bonds can save Rs.2,060, Rs.4,120 andRs.6,180 in taxes for those falling in the 10%, 20% and 30% tax slab, respectively.Currently there are two issues running by IFCI Ltd and PFC ltd, both Government of India Undertaking companiesand thus are rated highly as well. Besides saving an additional amount from Tax, they also pay you annual couponsup to 8.75%, which deems it an attractive investment avenue.Listed here are the key features of these issues.
Power Finance Corporation Long Term Infra Bonds:
 
Issue Opens
29-Sep-2011,
Issue Closes
04-Nov-2011
.
 
Public issue of bonds by an infrastructure company under
Sec 80 CCF
.
 
The bonds are rated
 „AAA /Stable‟ by CRISIL, „
AAA-
Stable‟ by ICRA, indicating highest safety
 
 
Minimum Application:
Rs.5,000 or 1 Bond
 
Coupon:
8.50% to 8.75%
 
These bonds will be issued only to Resident Indian Individuals (Major) and HUF
 
The bonds will be listed on BSE and can be traded after the 5 year lock-in period.
IFCI Long Term Infra Bonds Series III:
 
Issue Opens
21-Sep-2011,
Issue Closes
14-Nov-2011
.
 
Public issue of bonds by an infrastructure company under
Sec 80 CCF
.
 
BWR
 „
AA-
‟ by Brickwork Ratings India Pvt. Limited CARE‟A+‟ by CARE Ratings (Credit Analysis & ResearchLtd.) „LA‟ by ICRA Limite
d.
 
Minimum Application:
Rs.5,000 or 1 Bond
 
Coupon:
8.50% to 8.75%
 
Resident Indian Individuals (Major) and HUF through Karta of the HUF
 
Proposed to be listed on BSE
 
Bonds shall be issued both in dematerialized form and physical form. However, trading allowed only indematerialized mode after the expiry of lock-in Period of 5 years.

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