CanBank Mutual Fund sees Rs 277-cr erosion
New Delhi--Canbank Mutual Fund has witnessed a massive erosion of Rs 276.89 crore in investment value under its 14 existing schemes as on March 31, 2001. The mutual fund with a total investor base of 3.5 lakh, has very high exposure to the information technology sector, according to the fund’s audited balance sheet as on March 31, 2001. With IT stocks being hammered to a new low during the last quarter of 2000 from an all-time high in March most of these stocks have shed up to 90 per cent of their value.
The losses in investment have mounted in fiscal 2001 as compared to the figure of Rs 35.17 crore (depreciation in value) as on March 31, 2000.
This is reflecting on the performance of Canbank MF’s schemes. Cantriple+, a balanced scheme, seems to be the worst performer among the 14 schemes as its investment value has eroded by Rs 96.2 crore during the fiscal 2001.
In fact, the total erosion in its asset base is to the tune of Rs 142.37 crore. The net asset value (NAV) has fallen from Rs 23.28 as on March 31, 2000 to Rs 17.07 as on March 31, 20001.
The scheme has highest exposure (Rs 34.37 crore) to IT in its equity portfolio followed by pharma (Rs 17.27 crore), telecommunication (Rs 15.1 crore), etc.
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Liquidity in derivatives market to pick up after a year
Mumbai-- A poll conducted by Ernst & Young, a global consulting firm, on leading capital market players, including officials of stock exchanges, brokers, financial institutions (FIs), primary dealers and Sebi, dealing with the emerging scenario in the Indian capital market, reveals that the majority financial services players feel that liquidity in the derivatives market will pick up after a year or so after the introduction of options trading on July 2.
This is on account of limited knowledge of the new instruments and larger institutional investors waiting for liquidity in the market before jumping into the fray are cited as some of the reasons for this gestation period.
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RBI to tighten up call money market for foreign banks
Mumbai-- The Reserve Bank of India (RBI) is considering various proposals to tighten the existing limits of borrowings and bring them on par with international norms.
This is to reduce the excessive reliance of foreign banks and small new private-sector banks on the inter-bank call money market,
Sources say that a bank can borrow from the inter-bank call money market to adjust negative mismatches between sources and deployment of funds, if the mismatch falls within the limit of 20 per cent of the sources they raised in the market.
However most of the foreign banks and private banks with small deposit base, excessively borrow in the call money market to fund their long-term assets and capital requirements.
The RBI, therefore, it is learnt, is considering a move to prune down the 20 per cent limit so that excessive reliance on the market is scaled down, given that the market is both thin and volatile, and is at a developing stage.
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GTB sells KP scrips as market firms up
Mumbai—Global Trust Bank has begun selling the shares held against its loan exposures to Ketan Parekh’s firms and sold close to Rs 15 crore worth of shares pledged by different KP outfits over the past few days.
The reason prompting the sale could be the firming up of the markets over the last one-week as well the induction of a new chairman at the GTB board. The bank has started lowering outstanding advances to the capital market.
A fortnight ago the new CMD, R S Hugar, announced that the bank will lower its exposure from 11 per cent to five per cent. Under the circumstances, GTB has begun with the KP accounts, which constitute a predominant part of the bank’s stock market exposure.
The bank’s exposure to Parekh’s companies is to the extent of Rs 240 crore, of which around Rs 26 crore is non-fund exposure in the form of guarantees.
As of January, the bank’s total exposure to the capital was Rs 560 crore — marginally above 15 per cent of its total advances of Rs 3612 crore as on December ‘00.
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CSE says IndusInd withheld info on bankrupt brokers
New Delhi— Tapas Datta, executive director of the Calcutta Stock Exchange has hinted at a direct collusion between Hindujas-owned IndusInd Bank and the group of brokers involved in the payment crisis on the CSE in March.
Datta told the joint parliamentary committee probing the stock scam that IndusInd withheld crucial information for four days that the group of brokers with outstandings to the exchange had no money in their accounts.
JPC chairperson Prakash Mani Tripathi said, that nexus would be probed in the second phase of the hearing, he said.
The CSE payment crisis had come to light when the pay-in for settlement number 148 could not be made. The total pay-in amount amounted to Rs 230 crore, including an outstanding of Rs 62 crore for settlement 148.
Tripathi said Datta told members that the discrepancy was noticed after the entities responsible for settlement 148 failed to make their payments at the end of the week.
Among the brokers were Harish Biyani, Dinesh Singhania and Ashok Poddar, all considered to be favourites of Ketan Parekh.
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US stocks end mixed, hurt by profit warnings
New York—As a number of profit warnings and lay-offs came from companies, the biggest being Merrill Lynch, blue chips fell for the third straight day on Tuesday.
The market was also awaiting a decision on interest rates by the Federal Reserve, which is expected to cut rates by a quarter-point on Wednesday. The central bank has already cut rates five times this year, a total of 2.5 percentage points, to reinvigorate the economy.
The Dow Jones industrial average ended Tuesday's session down 31.74, or 0.3 per cent, at 10,472.48, after falling more than 100 points both Friday and Monday.
The Nasdaq composite index advanced 13.75, or 0.7 per cent, to 2,064.62, while the Standard & Poor's 500 index slipped 1.84, or 0.1 per cent, to 1,216.76.

The fact that the Consumer Confidence Index rose to 117.9, which was better than what analysts were expecting, in June did not impress the market. Nor did the fact that orders to US factories for costly manufactured goods jumped 2.9 per cent in May, easily beating the 0.4 per cent rise many analysts were expecting thanks to an especially strong increase in the demand for cars and semiconductors.
Smaller companies fared better with the Russell 2000 index rising 6.63 to 490.82. Analysts have said smaller companies stand to benefit most from lower interest rates.
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