Click on to the capital market tracking websites like rediffmoney.com, moneycontrol.com, et al, and the first thing one notices is an animated online ad wherein a [virtual] DJ is remixing music and dancing to various tunes. Wondering what such spunky ads are doing in websites that are believed to carry some serious numbers? Well, that’s how Motilal Oswal Asset Management Company is marketing its maiden offering – an Exchange Traded Fund (ETF). In fact, named as MOSt Shares M50, this new offering from Motilal Oswal (it’s India’s first fundamentally weighted ETF based on Nifty as well) seeks investment return that corresponds to the performance of S&P CNX Nifty Index. This means that the constituents of MOSt 50 Basket will be the same as the constituents of Nifty. Globally, fundamental indexing is popular among investors, but it is yet to take off in India. However, if MOSt Shares M50 clicks with Indian investors, it is set to mark a beginning of new era for ETFs. But what is it that prompted this AMC to position the product in an entirely different way from its traditional counterparts? “It’s a unique investment product that combines the benefits of active allocation and passive execution by using a fundamental weighing approach to the most popular market benchmark - Nifty. As an ETF platform, MOSt Shares M50 also provides the benefits of a mutual fund and a share,” says Nitin Rakesh, MD & CEO, Motilal Oswal AMC. Well, we’ll wait for the performance.

Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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10/08/2011 9:49pm

India’s first US Equities based ETF tracking the NASDAQ-100 Index, MOSt Shares NASDAQ 100 provides Indian investors with an exposure to top 100 US and international non-financial securities listed on The NASDAQ Stock Market® based on market capitalization. NASDAQ-100 Index is developed and maintained by The NASDAQ OMX Group, the world's largest exchange company.

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10/08/2011 9:52pm

The common minimum programme (CMP) has added just another twist to the banking sector tale. It says that it is all for “managerial and commercial autonomy for public sector units”. On the other hand it also says that rural spending will be doubled in the next three years meaning that the government will now direct lending.
There is an apparent contradiction in the statement. Can there be any managerial autonomy for public sector banks (PSBs) if credit is being directed by the government?. No wonder most PSBs fell like ninepins on May 28, 2004. The bankkex fell 6.3 per cent as compared to the 4.4 per cent fall in the BSE Sensex.

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10/08/2011 9:55pm

Let’s assume you raise $6 million in cash with help from other investors. That will be the bank’s initial equity, the owner’s stake. Next you obtain a charter, rent a building, furnish it with all the necessary equipment, hire and train a staff, and open your doors for business.
You’ll need to deposit some of your initial stake at the Fed. Those funds will be used to clear checks written by your own depositors. You’ll also need to keep enough cash in the vault to meet the demand for withdrawals by your depositors. Let's assume initial expenses of $1.2 million. That leaves $4.8 million, of which you allocate $2 million to vault cash and $2.8 million to your Fed account.

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10/08/2011 9:58pm

The experience of most people with banks is at the retail level -- making deposits, writing checks, and perhaps taking consumer loans or small business loans. These activities, while important to individuals, represent a minor part of the banking business. For an understanding of the major role that banks play in the economy, we need to look at the activities of truly large banks.

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