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.