Stock Broker - Interesting statistics

Some time back, i had written about how to chose a stock broker at

How to Choose a Stock Broker ?

Here are some interesting statistics that i came across a news item which is relevant to choosing a stock broker.

Motilal tops cos with max trading terminals. Indiabulls Securities Has Most Trading Accounts; Geojit Ranked Top Commodity Broking Co.


MOTILAL Oswal Securities tops the list of leading brokerages with most number of trading terminals at 7,923 while Indiabulls Securities heads the list of firms with the most number of trading accounts at 2.38 lakh, according to a report put out by business information provider Dun & Bradstreet.

Angel Broking, Kotak Securities and SMC Global Securities bagged the second, third and fourth spot in terms of number of trading terminals while Reliance Money, Bonanza Portfolio and Angel Broking (in that order) are among the top brokerages with most number of trading accounts, the D&B India’s ‘Leading Equity Broking Houses 2008’ report stated.

Equity broking firms which reported significant rise in their trading terminals during the first 10 months of 2007 included Motilal Oswal, Reliance Money and Master Capital. Firms with significant increase in the branches or offices during the first 10 months of 2007 included Bonanza Portfolio, Arcadia, Master Capital, Khandwala Integrated and Reliance Money. Geojit Commodities, Karvy Comtrade and Angel Commodities (in that order) have been ranked “top-three” commodity brokerages in terms of number of terminals.

The 193 equity broking firms included in the study have reported a total of 90,531 trading terminals, which account for about 90% of the equity trading terminals in the country. 118 equity broking firms reported a total of 40,971 sub-brokers, and 171 equity broking houses that provided information on the branches and offices reported 11,648 branches or offices spread across the country. The number of employees reported by the 186 equity broking houses stood at 63,549. A majority of the 193 broking firms, about 80%, featured in D&B report entered the business in the decade following the 1990s.

Mirae Asset Opportunity Fund

Mirae AMC has launched a open ended equity scheme called "Mirae Asset Opportunity Fund". The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 65% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 35%

The corpus of the Scheme shall be predominantly invested in equity and equity related securities including convertible debentures,equity warrants, convertible preference shares, equity derivatives etc. in Indian markets. However, due to market conditions, the AMC may invest beyond the range set out above. Such deviations shall normally be for a short term purpose only, for defensive considerations and the intention being at all times to protect the interests of the Unit Holders.

Scheme Details
Issues opens: February 11, 2008
Issue Closes: March 10, 2008
Type: Open-ended, equity scheme
Plan : Growth Option and Dividend Option. Dividend Option shall have the choice of dividend payout, dividend reinvestment and dividend transfer options.
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter.
Entry Load: For investments below Rs 5 crores, there will be an entry load o Rs 2.25%.
Exit Load:
For purchase amount less than Rs. 5 Crores
a. Redemption within 6 months from the date of allotment 1.00
b. Redemption between 6 and 12 months from the date of allotment 0.50
Purchase amount greater than Rs. 5 Crores NIL
Benchmark : BSE 200
Recurring expenses : Upto 2.5% per annum which includes marketing, investment management and operational costs.

Liquidity - The Scheme will offer units for purchases/switch-ins and redemptions/switch-outs at NAV based prices on all business days on an ongoing basis. The scheme will re-open for purchases on April 8th.

Reliance Equity Saving Fund Series - I

Reliance AMC has launched out with closed ended Mutual fund "Reliance Equity Saving Fund Series - I" which is 10-year Closed-end Equity Scheme. The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equities along with income tax benefit.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 80% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 20%

The scheme may invest in equity shares in foreign companies, ADRs / GDRs and instruments convertible into equity shares of domestic or foreign companies and in derivatives as may be permissible under the guidelines issued by SEBI and RBI. As the scheme is governed by ELSS guidelines, such investment will be made, if the ELSS guidelines permit.

The fund managers will follow an active investment strategy taking defensive / aggressive postures depending on opportunities available at various points of time. Subject to Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, opportunities and political & economic factors.

It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the AMC, the intention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations. However, such changes at all times will comply with ELSS notifications. The asset allocation pattern will be in line with the rules and guidelines of ELSS notifications also.


Scheme Details
Issue Closes: March 17, 2008
Type: Close-ended, equity scheme
Plan : Dividend Payout Option and Growth Option
Minimum Investment: Rs. 5,00. Additional amount in multiples of 500 thereafter. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-.
Entry Load: Nil as it is a close ended scheme
Exit Load: Nil. However, in accordance with the SEBI (MFs) Regulations, NFO expenses not exceeding 6% of the amount mobilised, will be charged to the scheme and will be amortised over a period of 10 years. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.
Benchmark : BSE 100
Recurring expenses : 2.5% per annum which includes marketing, investment management and operational costs.

Liquidity - The amount invested in the scheme shall be subject to a lock-in of 3 years from the date of allotment and thereafter redemption will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices. Eligible investors in Reliance Equity Linked Saving Fund - Series I are entitled to deductions of the amount invested in units of the scheme, subject to a maximum of Rs. 100,000/- under and in terms of Section 80C (2) (xiii) of the Income Tax Act, 1961. The Scheme does not asssure or guarantee any returns.

Switch - in from other schemes in Reliance Equity Linked Saving Fund – Series I, will be available only during NFO and at the applicable load structure from these schemes, if any.

Switch - out: Available only during the Specified Redemption Period after expiry of lock-in-period of 3 years, at the applicable load structure in the respective schemes.

Birla Sun Life Pure Value Fund

Birla AMC has launched a Mutual fund "Birla Sun Life Pure Value Fund" which is a 3-year Closed-end Equity Scheme with an Automatic Conversion into an Open-Ended Scheme upon Maturity. Birla Sun Life Pure Value Fund seeks to generate consistent longterm capital appreciation by investing predominantly in equity and equity related securities by following value investing strategy.

Value investing is buying into stocks that are trading for less than their intrinsic value - stocks that the market is undervaluing. Typical value investing strategies include, strategies like

• Buying stocks with a low price to book value,
• Low price to cash flow
• Low price/earning multiple, and high dividend yields
• Asset Replacement
• Dividend Yield higher than the G-Sec yield
• Valuation mismatch due to invisible/under valued assets (Land, Licenses, Brands, Trademarks,
Patents etc.)
• Situations wherein the value of the Company would be unlocked due to
o Mergers and Acquisition activities
o Restructuring
o Recovery potential
o Retained earnings

Key underlying assumption in Value Investing is that markets are inefficient and over a period of time the market will discover and find the right value for the stock.
Value strategy, is a conservative way of investing in Equities. The primary reason is that these stocks are already available at a substantial discount relative to the general market levels. As such the downside in such stocks is relatively lesser.
The value strategy, while being a blend of Top down and Bottoms up, essentially focuses on companies with long track records and excellent managements. As such the probability of these companies to improve their fundamentals with changing business dynamics is relatively strong.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 85% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 15%

Scheme Details
Issue Opens: January 17, 2008
Issue Closes: March 1, 2008
Type: close-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: Nil as it is a close ended scheme
Exit Load: Nil (for all redemptions/switch outs made during the specified redemption period until the scheme remains closed-end).However, investors offering units for repurchase/ switch out during the specified redemption periods before maturity of the scheme/conversion of scheme into open ended scheme will be charged balance proportionate unamortized issue expenses on the applicable NAV
Benchmark : BSE 200
Liquidity : The scheme will offer for redemption/switch-out of units at Monthly Intervals at NAV based prices. The redemption/switch-outs will be available only during the specified redemption period i.e. first five business days of each month after the date of allotment. The NAVs of the scheme will be announced on a weekly basis and on all business days during the specified redemption period.
Initial Issue Expenses: Entry Load collected during the NFO period shall be utilised to meet the NFO expenses. Remainder of the New Fund Offer expenses, if any, shall be borne by the AMC.

Banks reduce loan interest rates

State Bank of India has brought down its prime lending rate by 25 basis points. The country’s largest bank has brought down rates by the same level as HDFC earlier this month. Bank of India has also lowered rates on home loans and other personal loans.
The reduction in prime lending rate, known as SBI Advance Rate, will bring down interest cost for existing home loan borrowers as all variable rate loans are linked to SBIAR. Until the rate reduction SBI was charging, 2.75% below SBIAR for 5-year floating loans, 2.5% below SBIAR for 10-15 year floating rate loans and 2.25% below SBAR for 15-20 year loans. Loans above Rs 20 lakh were 25 basis points higher.

A few days ago Bank of India has reduced home and other personal loan rates without touching its prime lending rate. A BoI official of the bank said that for new borrowers the rate reduction will range from 25 basis points to 250 basis points depending on the nature of the loan and the tenure.

Last week, a host of banks including Canara Bank and Allahabad Bank announced rate reduction. Chennai-based Indian Overseas Bank said that the bank’s asset liability committee would meet on Friday to review its lending rates. Sources said that the bank was likely to announce a 25 basis point reduction in lending rates on the lines of the cut by SBI and HDFC.

The RBI in its monetary policy hinted that banks were doing very well because they had not passed on a reduction in their costs to borrowers. The finance minister has also been asking banks to ensure that they pass on cost reductions.

As a result of the reduction in the interest rates, the yields on G-Secs which are are an indicator of interest rate movement has decreased thus perking up the bond prices.

Morgan Stanley A.C.E./ACE Fund

Morgan Stanley has launched a Mutual Find after 14 years after they launched their firs fund in India. It is an open ended fund called the ACE (Across Capitalisations Equity) fund whose objective is to generate long-term capital growth from an actively managed portfolio of equity and equity-related securities including equity derivatives.

It proposes to invest the funds as pet the details given below
Equity and Equity Related Instruments: 65% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 35%

Scheme Details
Issue Opens: February 11, 2008
Issue Closes: March 10, 2008
Type: Open-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: The entry load will be as given belo
For purchases of less than Rs. 5 crore: 2.25%
For purchases of Rs. 5 crore and above: Nil
For purchases in SIPs under salary saving schemes for groups of employees through an arrangement with their employer: Nil
Exit Load: The exit load will be as given below
For purchases of less than Rs. 5 crores:
If redeemed on or before the expiry of 1 year from the date of allotment: 1%
After the expiry of one year from the date of allotment: Nil
For purchases of Rs. 5 crores and above:
If redeemed on or before the expiry of 6 months from the date of allotment: 0.5%, otherwise Nil
Benchmark : BSE 2000
Liquidity - The Scheme will offer Units for Purchase and Redemption at NAV related prices on every Business Day on an on-going basis, commencing not later than 30 days from the closure of the NFO period. The Mutual Fund will endeavour to dispatch the Redemption proceeds within 3 Working Days from the acceptance of the Redemption request.
Initial Issue Expenses: Entry Load collected during the NFO period shall be utilised to meet the NFO expenses. Remainder of the New Fund Offer expenses, if any, shall be borne by the AMC.

ICICI Prudential Fusion Fund Series-III

ICICI has launched a new Mutual fund ICICI Prudential Fusion Fund Series – III which is a close-ended diversified equity Scheme, with a maturity period of 3 years, that
seeks to generate long-term capital appreciation by investing predominantly in equity and equity related instruments of companies across large, mid and small market capitalization.

Two options are available to the investor on the date of maturity viz. Redemption or switch-in to ICICI Prudential Fusion Fund Series-II. Investors who would like to switch-in to ICICI Prudential Fusion Fund Series-II will have to specifically opt for switch-in facility. If the investor does not select any option, then the redemption option will be the default option. The option to redeem/switch will be given in the application form of the Scheme.

It will look at investment opportunities in companies representing all possible levels of market capitalization. Under normal circumstances at least 70% of the funds is proposed to be invest in equity and equity related instruments. The fund would be diversified as this fund proposes to invest in large, mid or small caps fund segments. The fund may move upto 30% in debt securities if risk reward ratio is favorable for such allocation.

Scheme Details
Issue Opens: January 8, 2008
Issue Closes: February 21, 2008
Type: close-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: No entry load will be charged since the scheme is a close-ended scheme.
Exit Load: No exit load will be charged. However, being a close-ended Scheme, for redemptions made before the maturity date of the Scheme, i.e redemptions made during the repurchase facility period, AMC will redeem the units after recovering the balance proportionate unamortized new fund offer expenses
Benchmark : S & P CNX Nifty
Liquidity - To provide liquidity to investors, the Fund proposes to provide repurchase facility at quarterly intervals on 15th day from end of each quarter.

HSBC Emerging Markets Fund

Joining the bandwagon of AMCs that had recently launched mutual funds targeting investment in equities of foreign countries such as South East Asia, China etc, HSBC has launched a Mutual Fund called HSBC Emerging Markets Fund.

HSBC Emerging Markets Fund (HEMF) is an open-ended scheme seeking to provide long-term capital appreciation. The scheme will invest in units / securities issued by overseas mutual funds or unit trusts which will primarily be in equity and equity related instruments of emerging economies like Brazil, China, Russia, India, etc. The fund may also invest a limited proportion in domestic debt and money market instruments.

80 - 100% Units/securities issued by overseas mutual funds or unit High trusts of emerging markets. Currently HSBC GEM Equity Fund is envisaged to be used for investing in the emerging markets however; HEMF could use any other global fund of HSBC Group to invest in emerging markets.

0 - 20% Domestic Debt, Money Market instruments (including CBLO Medium & reverse repo) and units of domestic mutual funds.

Scheme Details
Issue Opens: January 28, 2008
Issue Closes: February 25, 2008
Type: Open-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 10,000. Additional amount in multiples of 1 thereafter
Entry Load: 2.5% for investments/switch in below Rs 5 crores, otherwise Nil..
Exit Load : 1% for investments below Rs.5 crores, if redeemed/switched out within 1 year from the date of investment, otherwise Nil.
Benchmark : BSE 200 & MSCI Emerging Markets Index
Liquidity : The Units of the Scheme shall be available for subscription at Applicable NAV based prices, subject to prevalent load provisions, if any on every business day not later than 30 days after the close of the New Fund Offer Period.

HSBC Small Cap Fund

HSBC has launched a Small cap fund. I am unsure how this will take given the recent carnage in the small and mid cap segment.

It's Investment Objective is to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. It is a a close-ended equity scheme with automatic conversion into an open-ended equity scheme at the end of 3 years from date of allotment of units
Options.

The definition of a small cap company will be Companies with the market capitalization which is 1) lower than or equal to the market capitalization of the stock in the BSE Small Cap Index with the largest market capitalization and 2) higher than or equal to the market capitalization of the stock in the BSE Small Cap Index with the smallest market capitalization.

Asset Allocation
Equity & equity related instruments of Small Cap Companies: 65 - 100%
Equity & equity related instruments of other than Small Cap Companies: 0-35%
& Money Market Instruments: 0-35%

Scheme Details
Issue Opens: January 19, 2008
Issue Closes: February 3, 2008
Type: Closed-end, equity scheme with automatic conversion to an open ended fund after 3 years
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 10,000. Additional amount in 1000 and in multiples of 1 thereafter
Entry Load: Nil. Upon conversion into an open-ended scheme**: 2.25% for investments/Switch ins below Rs 5 crores, otherwise Nil.
Exit Load : If the investments are redeemed/switched out within: 1 year: 2%; 2 years: 1.5%; 3 years: 1%; otherwise Nil; Upon conversion, Exit: Nil. Balance proportionate unamortised NFO expenses to be recovered in case of exit within close-ended period.
Benchmark : BSE Small Cap Index
Liquidity :During the close-ended period: Units can be redeemed/switched out on the last 3 business days of every month at NAV based prices, subject to provisions of exit load, if any and recovery of balance proportionate unamortised NFO expenses. Upon conversion into an open-ended scheme: Daily redemption available at Repurchase

LIC Infrastrucure Fund

Joining the bandwagon of AMCs, LIC has also launched a launched a mutual fund that will target investments in the infrastructure fund. It is not surprising to see everyone getting into this bandwagon with a a hope to garner as much investment as possible for this sector given the fact that the Indian GDP growth cannot be achieved if Infrastructure does not perform.

This mutual fund joins the long list of similar finds launched by JM Mutual, Kotak, UTI, AIG and HDFC in the recent past with similar themes.

It is a 36 month close ended equity fund. Upon completion of 36 months, the scheme will automatically be converted into an open ended scheme. Units outstanding under the scheme on the completion of 36 months will automatically continue under the open ended scheme.

The investment objective of the scheme is to provide long term growth from a portfolio of equity / equity related instruments of companies engaged either directly or indirectly in the infrastructure sector.

The fund proposes to invest between 70% and 100% per cent of the fund proceeds into Indian equities related to infrastructure and infrastructure related companies. It has an option to invest upto a maximum of 35% in Debt Securities and Money Market Instruments and Fixed Income Derivative.

Scheme Details
Issue Opens: January 31, 2008
Issue Closes: February 29, 2008
Type: Closed-end, equity scheme with automatic conversion to an open ended fund after 3 years
Plan : Dividend Option,Growth Option. Dividend Option (with Payout Facility only).
Minimum Investment: Rs. 5,000 and in multiples of 1 thereafter
Entry Load: Nil
Exit Load: Units will be redeemed only after recovering the balance unamortised expenses.
Liquidity :Investors can repurchase their investments once in a week during close-ended period and on all business days after the scheme becomes open-ended.

Lotus India AGILE Tax Fund

Lotus AMC has launched a close ended Mutual fund that is an ELSS scheme. The Lotus India AGILE Tax Fund is India's first ever Quant-based tax-saving fund. This means that the stocks selected by the fund would be solely on the basis of a mathematical model rather than research and company fundamentals, technical analysis or opportunity ahead.

The primary objective of this fund is to generate capital appreciation by investing in a passive portfolio of stocks selected from the industry leaders. The portfolio of the scheme will constitute of stocks which qualify the following conditions.

• The market capitalisation of the stock chosen should not be less than the market capitalisation of the last stock of S&P CNX Nifty.
• The floating stock of the company should not be less than the least floating stock of S&P CNX Nifty.
• The stock should have a price history of at least 1 year before the date of investment.
• The industry represented by the stock should be present in the composition of S&P CNX Nifty

Of all the stocks that meet the above criteria, only the top 11 will be selected for investment. Thereafter, 9 per cent of the total corpus will be invested in each of these stocks and the remaining 1 per cent will be invested in debt and money market instruments.

Scheme Details
Issue Opens: November 15, 2007
Issue Closes: February 15, 2008
Fund Category: Equity Tax Planning
Type: Closed-end tax saving scheme
Initial Issue Expense: A maximum of 6% of the amount raised
Benchmark Index: S&P CNX Nifty
Minimum Investment: Rs. 500
Liquidity: After the lock-in period of 3 years from the date of allotment, the scheme will offer redemption or switch-out of units at monthly intervals at NAV based prices.

This model of portfolio management is a very new concept in India and there is only one fund of this model that was launched by Lotus AMC in November 2007. But its very design could mean that it could be a roaring success or a complete disaster. Investors who have a good risk appetite and is willing to experiment with a uniqe form of investment and diversification should invest in this while the not so convinced folks should prefer any good open-end tax saving fund with a proven track record over this fund.

HDFC cuts the prime lending rate for home loans

HDFC has cut the prime lending rate for home loans by 25 bps and this move will benefit old borrowers who are on floating rates.

If you happen to be a burrower of HDFC, your rate goes down by a quarter percent on your due date, which happens every three months. After you have taken a loan, you are eligible for a change of rate and that is what HDFC has done. So it is the old borrowers who are going to be benefited.

Generally, the EMI is kept the same, and the tenure comes down. However, If someone really wants to reduce his or her EMI for whatever reason, he or she can do so, but generally HDFC changes the tenure of the loan.