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September 2011

The month of August witnessed a lot of volatility in the markets and eventually it crashed in the month of August. Equity markets ended the month of August with a huge downfall - BSE Sensex and S&P Nifty both ended down by 8.36% and 8.77% respectively. There was a heavy downfall in small cap stocks and BSE Small Cap Index lost a whopping 14.14% in the month and on the other hand BSE Midcap index lost 9.28%. BSE Realty, BSE Metal and BSE IT were the worst hit sectors in the month.

Economic uncertainty in most parts of the world and concerns of slow recovery have also impacted the Indian market which continues to witness high inflation. Volatility is likely to continue in the Indian markets. However, long term investors can look at entering equity markets at the current levels and gradually increasing the equity exposure. Unlike 2008 the Indian equity market is significantly oversold and the retail investors are not invested. Though it is difficult to predict the bottom, it would be a good idea to incrementally increase one’s equity exposure. RBI will make its policy announcements on 16th September, 2011 and the Government too is geared up to tackle the issue of rising food prices.
There have been certain regulatory changes which are brought about by SEBI like introduction of transaction charges for investments of Rs. 10000 and above. All investors are advised to take a note of these changes. SEBI has also announced its thoughts on Portfolio Management Services and Altrenate Investment Funds. The final outcome will be keenly watched.

We have received a good response to our recently concluded NFO of SBI Gold Fund. I would like to thank our Business Associates and Investors for their support and patronage for this scheme and would like to assure that we shall continue to launch such innovative products in the future too. This scheme will reopen for subscription with effect from September 19, 2011.

We will be soon launching SBI Capital Protection Oriented Fund – Series III, which is a 3 - year close ended capital protection oriented fund and the NFO for the same opens on September 15, 2011 and ends on September 29, 2011.  The fund is rated AAA (ind) (SO) (EXP) by Fitch and thus it would be ideally suitable for investors with low to medium risk profile. Please contact your financial advisor or get in touch with our nearest ISC/ISD to know more about the product and invest in it.

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