These days Rising in Inflation is playing very important role in Indian Markets. From last couple of weeks inflation figures have started moving upwards at 11.42% till 14th June, 08 which is the highest in more than 13 years and even it is above the comfort zone of RBI – Reserve Bank of India, which is around 5.5%.

Increase in Commodity & Crude Price has resulted in increase in Inflation Figures. Mainly these figures have arrived due to Fuel, Chemicals, textiles & Manufacturing Industries. Looking towards the trends these figures have not come to a consolidation mode and so till the end of this year these figures seems to remain in double figures.

But do these figures will really affect the markets in future or not?

Few Weeks back nobody use to track Inflation figures and suddenly when it started booming with our economy and all the public media started highlighting these figures. It is just a phase and one of the reasons for market to react in such circumstances.

If India is moving towards the growth then these figures will also grow day by day, which will be always more than the historical levels.

India’s path for High growth would result in High Income Levels and Low resistance to rising prices.

Very importantly do not forget, If India is growing and so these figures have to, and in future these figures will be part of the Growth. I don’t think so that these double figures would be a major concern in future.

Sumit Jain

The whole upward trend started in 2003, April Ended with NIFTY at 934.05 from where It went up to 6374 till 10/01/2008, 5439.95 points rise in NIFTY. So, technically if we talk about retracement of about say 50% i.e  2719.97 points then also NIFTY may touch 3600-3700 levels.

So it means coincide of SENSEX at 12400-12600. And now we will be suffering from this crucial level.

So get Ready to travel in this painful journey!

Chandni Jain

History of Mutual Fund

What is history of Mutual Funds in India ?
We have define History of Mutual Funds as different Phase in Indian Markets.

First Phase - 1964-87

1. Started in 1963 with Unit Trust of India, Government of India & RBI.
2. Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India.
3. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI.
4. First scheme launched by UTI was Unit Scheme 1964.
5. In 1988 UTI had Rs.6,700 crores of Assets Under Management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

1. In 1987 public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) got the Entry in MF Industry.
2. SBI was the first non- UTI Fund established in June 1987 followed by Canbank (Dec 87), Punjab National Bank (Aug 89), Indian Bank (Nov 89), Bank of India (Jun 90), Bank of Baroda (Oct 92).
3. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
4. At the end of 1993, the mutual fund industry had Assets Under Management of Rs.47,004 crores.

Third Phase -1993-2003 (Entry of Private Sector Funds)

1. In 1993, a new era started in the Indian MF industry, giving the Indian investors a wider choice of fund families.
2. In 1993 first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
3. The 1993 SEBI Regulations were substituted by a more comprehensive and revised Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.
4. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions.
5. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds Involvement.

Fourth Phase since February 2003

1. In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.
2. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds.
3. Till March, 2008 assets under management was Rs.505152 crores under 421 schemes.

Source: amfiindia.com