UTI-MNC Fund declares tax free dividend of 25%

UTI-MNC Fund, an open-ended equity scheme, has declared tax-free dividend of 25% (Rs 2.50 per unit on face value of Rs10/-).

Pursuant to the payment of dividend, the NAV of the dividend option of the scheme would fall to the extent of payout and statutory levy if any. The record date for the dividend is July 28, 2008.

UTI-MNC Fund was launched in April 1998. The objective of the scheme is to predominantly invest in equities and equity related instruments of Multinational Corporations and other liquid stocks.

SBI Mutual Fund declares dividend of 20% on ‘Magnum Comma Fund’

State Bank of India Mutual Fund has declared a dividend of 20 per cent under the dividend option of Magnum COMMA Fund, an open-ended equity scheme.  

The company said in a release that all investor registered under the dividend option of the scheme as on July 25, 2008 will receive this dividend.

The NAV under the dividend plan of the scheme as on July 21, 2008 was Rs 16.39. The record date has been fixed at July 25, 2008.  

However after the payment of dividend, the net asset value (NAV) of the scheme/option would fall to the extent of payout and statutory levy, if applicable.  

Magnum COMMA Fund was launched in June 2005. The last dividend announced by the scheme was of 15% in November 2006.

Gains from MF switch under tax scanner

Indian tax authorities are putting to good use their information network to spot evasion and bolster collection. 

Taxmen have now trained their sights on several investors who had invested a few lakhs in mutual fund schemes and then switched between schemes. The income-tax department is scrutinising the tax returns of several individuals, who have switched their investments during the course of a year. 

The exercise is primarily aimed at preventing tax evasion and ensuring greater compliance. In several cases, the income-tax department has started examining tax returns to ascertain whether investors have short changed it by not paying short-term capital gains tax while exiting a scheme before the completion of one year. Switching schemes does not violate any norms, but investors have to pay a short-term capital gains tax of 15% if they sell the units of a mutual fund or stocks before one year.

Benchmark MF Plans To Launch Oil Bees

The Benchmark Mutual Fund has filed the offer document with the Securities and Exchange Board of India (Sebi) for launching a dedicated scheme of Oil Benchmark Exchange Traded Scheme (Oil BeES). It's an open-ended exchange traded scheme.

The minimum application amount under the scheme is Rs. 10000 and in multiple of Re 1 thereafter. Each unit of Oil BeES issued under the scheme will be approximately equal to one tenth of the price of crude oil. The investment objective of the scheme is to provide returns that, before expenses, closely correspond to the returns provided by crude oil by investing in units of overseas mutual fund schemes including exchange traded funds investing in securities/instruments linked to crude oil and exchange traded notes and other securities/instruments whose returns are linked to crude oil. The scheme will charge 2.25%, as an entry load during NFO period and for continuous offer there is no entry load.

JM Financial Mutual Fund Sells 12% To Hedge Funds For $26M

JM Financial Mutual Fund, the asset management arm of Nimesh Kampani-promoted JM Financial,
has sold 12 per cent stake to three hedge fund investors for Rs 111.7 crore or $26.5 million. The three investors — Valiant Capital Partners, Blue Ridge Capital and Eton Park — have picked up 4 per cent each for about Rs 151 per share in the mutual fund. The total deal size is Rs 111.7 crore, valuing the company at Rs 931 crore, reports Reuters, quoting JM Financial Group Director Vishal Kampani.
The company plans to use the capital to expand and increase its distribution muscle across India, the report added. A non-binding term sheet agreement has been signed between the AMC and the investors subject to signing of definitive agreements and regulatory approvals.
This divestment from JM Financial is a forerunner to JM’s plans for international funds. It plans to launch a Singapore or Mauritius headquartered offshore fund by next year and would be working in close connection with these investors to launch the fund.

Past Mutual Fund Deals
In March, Standard Chartered sold its Indian asset management business to Infrastructure Development Finance Co for $205 million, valuing the firm at about 6 percent of its assets under management. In December, Reliance Capital sold about 5 percent of its fund unit for Rs 500 crore, valuing India’s largest fund firm at 13 percent of total assets.
In October 2007, Pioneer Investments picked up a 51 per cent stake in Bank of Baroda’s Asset Mangement company. In 2006, Canara Bank sold 49 per cent stake in its asset management subsidiary Canbank Investment Management Services to the Netherlands-based Robeco Group NV. Robeco is part of Rabobank. In 2004, SBI divested 37 per cent its mutual fund arm to Societe Generale.
UTI Asset Management, India’s second largest mutual fund group, has also been looking to bring in an international investor in the firm in a pe-IPO deal. The usual suspects Goldman Sachs, Lehman Brothers, Warburg Pincus, Singapore’s sovereign wealth fund GIC and a new investor like Japan’s Shinsei Bank were believed to be in the race for picking up 10-12 per cent stake in the company for about $200 million.
Japanese fund manager Nomura Asset Management evinced sufficient interest to pick up a stake in LIC MF Asset Management Company which manages LIC Mutual Fund.

IDBI to enter mutual funds business

The IDBI Bank Ltd is planning to enter the mutual fund business, a top bank official said here Friday. Talking on the sidelines of a Banking Conclave here, Yogesh Agarwal, the bank’s chairman and managing director, said: “We are talking to a few foreign companies for setting up an asset management company, where we would have the majority holding.”

It is expected that the bank would post a 25 percent credit growth in the current fiscal.

The bank is planning to open five branches abroad, for which it is yet to get necessary approvals. It has applied for full-scale branches in Singapore, Dubai, Bahrain and London and is looking forward to opening a representative office in Shanghai.

IDBI also plans to open 200 new branches in the country.

The bank is also planning to venture into private equity business, either alone or through a joint venture.

IDBI arm IDBI Capital Market Services Ltd is planning to set up a credit information bureau through a joint venture with credit rating agency CARE. The new entity will have a capital base of Rs.200 million.

“We are waiting for the final approval from the Reserve Bank of India to begin operations,” Agarwal said.

It would be a separate company, with both the entities having equal stakes. The credit information bureau would provide information regarding credit worthiness of borrowers.