| Weekly Facts |
| Close | Change | %Change | | BSE Sensex | 16,894.25 | 295.1  | 1.72% | | Re/US$ | 46.89 | 0.2 | 0.51% | | Gold Rs/10g | 17,100.00
| 25.0  | 0.15% | | Crude ($/barrel) | 73.62 | 1.4 | 2.00% | | FD Rates (1-Yr) | 5.00%-6.50% | Weekly change as on Dec 17, 2009 
Impact
The annual inflation rose faster than expected
to a 10
month high on the back of rising commodity prices. Inflation, as
measured by the
WPI (Wholesale Price Index) stood at 4.78% in November as against 1.34%
recorded
in the previous month.
 (Source: Bloomberg)
The food articles index which has 15.40% weightage in the WPI rose at an annual rate of 16.71%, while the manufacturing products index which constitute 63.75% of the WPI, rose at an annual rate of 3.99% in November 2009.
Prices have been rising swiftly over the past few months due to easy monetary policy and falling production of agricultural commodities due to the poor monsoon. But given the inflation, Government and RBI are hesitant to change the policy stance fearing that roll back of easy measures could derail the revival of an economy that grew at 7.9% in the second quarter of 2009-10. However, it is believed that rising inflation might prompt the RBI to hike the reverse repo rates by around 125 bps and the CRR (Cash Reserve Ratio) by 150 bps in 2010, since they may not be able to hold the current rates for long if the inflationary expectations remain at elevated levels.
Impact
 Earlier, switching a mutual fund distributor was the most inconvenient task
which mutual fund investors faced, since several Asset Management Companies
(AMCs) insisted that investors’ procure a No-Objection Certificate (NOC) from
the existing distributor for switching over to another distributor and in turn,
distributors would always “go slow” in issuing the NOC. This was despite the
guidelines from Association of Mutual Funds in India (AMFI), mandating that
investors can change their distributor without any hassles.
To the rescue of the investors, SEBI vide its circular
No.13/187052/2009, dated December 11, 2009 has made it clear that investors can
now shift their distributors without obtaining the NOC. SEBI has also asked AMCs
to strictly comply with the AMFI guidelines, allowing investors to switch their
distributors. We believe that this is overall a good move in the interest
of investors which will now put an end to the inconvenient practice prevailing
in the industry and will ensure that: Proper services are provided by the distributor Proper grievance handling is provided by the AMCs to the investors by
setting up a separate customer service mechanism A window is provided to dissatisfied investors to move to a better
distributor Impact  In accordance with a modified circular (SEBI/MFD/CIR No. 05/12031/03, dated June
23, 2003) issued by SEBI, additional plans, which have substantially different
characteristics than the main scheme, will have to be launched as separate
mutual fund schemes and will not be allowed to be clubbed with the ongoing
open-ended plans (other than the dividend and growth plans).
We believe this guideline by SEBI, is a step to: - Improve the disclosures norms
- Preclude erroneous marketing of funds
- Enable investors to take an informed investment decision
- Avoid confusion in the mind of the investor
In an interview with the Economic Times, Dr. Mark Mobius, the
Chairman of Templeton Asset Management shared his views on Dubai World’s debt
trap. He said "Dubai’s pledge to adopt global standards on transparency and
creditor protection is a giant step in the right direction, and the worst of the
Emirate’s debt crisis is over". The Emirate also has expressed its commitment to transparency,
good governance and market principles in a statement made on Monday that
announced the new bankruptcy law and $10 billion bailout of the state owned
company Dubai World. Dr Mobius also said that "some of these debts have to be
restructured", but he also believes that "the worst is over and Dubai can really
become a big leader, not only in the Middle East but also globally." He added that "there are very good opportunities in the
Emirate’s stock markets for long term investors". - Association of Mutual Funds in India (AMFI)
will delay its online mutual fund trading platform since it faces tough
competition from the online mutual fund trading platform of BSE &
NSE.
- India’s foreign exchange reserves fell by $1.63
billion to $285.74 billion for the week ended December 11, 2009. This was
mainly due to the revaluation of no-dollar assets in the
reserves.
- Mobile Number Portability (MNP) which was
earlier scheduled to be implemented from January 1, 2010 is now delayed till
April 2010.
- The Bombay Stock Exchange (BSE) would allow
brokers empanelled with Asset Management Companies (AMCs) to place orders
through mobile phones in its online mutual fund trading platform in the next
15 days.
- Investors can now invest in the New Pension
Scheme (NPS) even through a post office as the Pension Fund Regulatory and
Development Authority (PFRDA) has allowed Indian Post to distribute both tier I
and tier II accounts of the NPS.
- Citibank which is country’s largest foreign
lender announced the launch of ‘CitiHome One’, which seeks to combine
features of conventional home loan and credit line. The customers of this
product will be able to convert 30% of their total home loan amount into a
credit line and the remaining 70% of the mortgage will be treated as a
conventional home loan.
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| IN THIS ISSUE  Think you know someone that will enjoy this email? Why not send it to a friend? Inflation: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum. (Source: www.investopedia.com) QUOTE OF THE WEEK Quote: "If you do not know how to care for money, money will stay away from you". -Robert Kiyosaki ATTENTION WOMEN!
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