SEBI Chairman's Thought Provoking Points on MFs

Over 200 luminaries were present at SEBI's workshop for Mutual Fund Trustees and Independent Directors of Asset Management Companies yesterday, at Mumbai. SEBI Chairman, Mr. Bhave made a couple of interesting observations:

1. Profits of Asset Management Companies have gone up four-fold since SEBI banned entry loads.

2. People talk of investors withdrawing money from mutual funds - decline of Rs10,000 crore in 1 year. The gross figures are - Addition Rs63K; Reduction Rs73K. If Rs63,000crore of new money came into mutual funds - then taking a saving of 2% (on account of entry load being banned), investors have benefited to the extent of Rs1,260crore. Which other regulatory move has given back Rs1,260 crore to investors in 1 year?

Definitely worth pondering over.

Next IPO Scam (Part 2)

In Part 1 of this post, last week, I mentioned about the unusual activity in the newly listed share. Volumes had gone crazy and the share price was jacked up to double the IPO price. I mentioned that the indicaters pointed to circular trading.

The share price has expectedly gone down to below the IPO price. Wonder how many small investors have burnt their fingers. Wonder whether the manipulaters have managed to make their money - or whether greed will make them go for an action replay!