Readings: Iron ore price cut, Close end funds, MF trading derivatives
NMDC Ltd, the largest supplier of iron ore, has slashed its prices by 25% across all categories for long-term agreements for the remaining months of the current fiscal.
Iron ore fines, which constitute almost 60% of its supply for long term agreements would come down to Rs 1,500 per tonne. Iron ore lumps, which are of over 65% ferrous grade would be around Rs 2,500 per tonne.
NMDC sells 2.5 million tonnes of ore a month. The total production of the company is around 30 million tonne annually including exports. The company exports just about 10% of its production.
- Business Standard: Sebi restricts early exits from close-ended funds
Sebi, today said investors will not be allowed to exit close-ended mutual fund schemes before they mature and asked fund houses to list them on stock exchanges.
The decision follows the liquidity crisis the industry faced two months ago with investors pulling out from fixed income funds fearing their credit quality. More than Rs 9,000 crore flowed out of debt funds during the period, forcing the Reserve Bank of India to offer money through a special market operation to ease the pressure.
- Economic Times: MF schemes hike exposure to equity derivatives
A bit of hedging and some speculative bets that hold the promise of good returns are prompting mutual fund schemes to increase exposure to equity derivatives. The past 10 months have witnessed several equity funds raising their investments in the derivatives segment to 15-28% of net assets managed. Industry watchers say much of the exposure is largely to derivatives, F&O, on the Nifty.
. . . fund managers are also selling ‘puts’ to make money in recurrently falling markets.
I think they mean selling calls. If so, that should make life interesting if the Nifty shoots up in a short time.
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