Investors pour $54.2 billion into equity mutual funds - TrimTabs

REUTERS - Investors poured some $54.2 billion into all equity mutual funds and exchange-traded funds in October, the third-largest inflow on record, data from TrimTabs Investment Research showed on Sunday.

All three of the largest monthly inflows into all equity funds have occurred this year, and this year's inflow of $286 billion into all equity funds is the biggest since 2000, TrimTabs added.

"When fund investors are as upbeat as they are now, a short-term pullback would not be a surprise," said David Santschi, chief executive officer at TrimTabs Investment Research.

Fund Investors keep dumping bonds, however. Bond funds posted five consecutive monthly outflows for the first time since late 2003.

Outflows have picked up even though the average fund was up 1.3 percent in September and 0.9 percent in October, TrimTabs said. Bond mutual funds and ETFs redeemed $13.5 billion in October, almost triple the outflow of $4.9 billion in September, the firm noted.

"We cannot emphasize enough how much recent outflows mark a dramatic shift for the fixed-income world," Santschi said. Bond funds have not posted five consecutive monthly outflows since August 2003 to December 2003, TrimTabs said.

New offerings surged to $23.6 billion in past two weeks, and Dealogic reports $4.3 billion already scheduled for this week, according to the research.

The U.S. economy slowed in October, while real wages and salaries climbed a scant 0.5 percent year over year, the researched showed.

TrimTabs said its demand indicators suggest the U.S. stock market may struggle to move much higher over the short-term but that the longer-term uptrend is secure.

While the S&P 500 is up 23.5 percent year-to-date, TrimTabs said its indicators do not point to a major sell-off anytime soon.

TrimTabs said its Demand Index stood at 77.9 on October 30, up a bit from 73.6 a week earlier (readings above 50 are bullish).

Although the index did not rise much, TrimTabs said it managed to clear the 75 threshold.

The short-term outlook is a lot less favorable, TrimTabs said, noting exchange-traded funds flows suggest stocks will have a tough time moving much higher.

Inflows into leveraged short exchange-traded funds stopped in the past week, which is a cautionary sign from a contrarian perspective, TrimTabs said. (Reporting by Scott DiSavino and Jennifer Ablan; Editing by Maureen Bavdek)

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'Current Account Deficit will be contained at 60 billion dollars': Chidambaram

New Delhi, Nov.1 (ANI): Finance Minister P Chidambaram on Thursday said that the Current Account Deficit (CAD) is under control, and will be contained at 60 billion dollars.

"Current Account Deficit shall be contained at 60 billion dollars. It is well under control, and I am confident we will be able to adhere to red line for fiscal deficit. Earlier current account deficit target was 70 billion dollars," he told media here today.

"There has been a sharp pick up in exports in last three months. Trade balance will be well contained, and it will reflect on current account deficit," he added.

He further said that inflation and reviving investments are key challenges for the government.

"We are confident that the steps taken by the Reserve Bank of India (RBI) will bring moderation in inflation," he said.

"The rupee has by and large stabilised, though in my personal opinion it is still trading above its appropriate level. The stability in currency markets will give comfort to take more measures,' he added.

Chidambaram also cautioned the investors against exuberance over market rally.

"Investor confidence in India remains intact. I would caution investors against excessive exuberance over market rally," he said.

He also said that the Foreign Direct Investment (FDI) inflows have been encouraging.

"Looking forward to more FDI inflows in pharmaceutical sector, single brand retail, multi brand retail and telecom sectors," he added.

The BSE Sensex hit an all-time high today breaking its earlier record of 21,206, which was set in January 2008.

The Sensex set a new all-time high record of 21,293.88, up nearly 130 points. The Nifty gained 8 points to close at 6,307. (ANI)

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Ranbaxy 2013 Q3 sales Rs.27.5 Billion

Gurgaon, Oct.29 (ANI): The Board of Directors of Ranbaxy Laboratories Limited, at its meeting held today, announced consolidated sales of Rs.27.5 billion for Quarter three, which was a marginal improvement on the same period in fiscal 2012-13 (Rs.26.7 billion).

A release by the company said that sales had been impacted by the new pricing policy and trade concerns in India and the absence of any post exclusivity sales during the quarter

It also said that earnings before interest, tax, depreciation and Amortization (EBITDA) was Rs.2 billion.

The company release also said that financial performance for YTD ending September 30, 2013 was Rs.77.5 billion, while EBITDA was Rs.5.5 billion.

Ranbaxy said the following exceptional items impacted profit:

.The depreciation of the INR against the USD, though favourable to Ranbaxy's export business had an adverse impact on the Company mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding.

.There was a charge of Rs.3.6 Bn during Q3'13 and Rs.7.6 Bn during YTD Sep'13 on account of these forex items mentioned above. The Company made a provision for Mohali stock write-off and other costs amounting to Rs.0.7 Bn.

.Net Loss after tax, minority interest and share in loss of associate was Rs.4.5 Bn.

Commenting on the business results for the quarter, Arun Sawhney, CEO and Managing Director, Ranbaxy, said: "The Company continues to grow in its focus branded markets in Asia, East Europe, CIS and Africa. In India, however, the announcement of the pricing policy caused some uncertainty in the market, during which our sales in the home market faced some disruptions.

We are confident that we will satisfactorily address the increasing standards of quality and manufacturing processes to uphold the high level of trust that our Doctors, Patients, Regulators and other stakeholders expect from us." (ANI)

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Ranbaxy 2013 Q3 sales Rs.27.5 Billion

Gurgaon, Oct.29 (ANI): The Board of Directors of Ranbaxy Laboratories Limited, at its meeting held today, announced consolidated sales of Rs.27.5 billion for Quarter three, which was a marginal improvement on the same period in fiscal 2012-13 (Rs.26.7 billion).

A release by the company said that sales had been impacted by the new pricing policy and trade concerns in India and the absence of any post exclusivity sales during the quarter

It also said that earnings before interest, tax, depreciation and Amortization (EBITDA) was Rs.2 billion.

The company release also said that financial performance for YTD ending September 30, 2013 was Rs.77.5 billion, while EBITDA was Rs.5.5 billion.

Ranbaxy said the following exceptional items impacted profit:

.The depreciation of the INR against the USD, though favourable to Ranbaxy's export business had an adverse impact on the Company mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding.

.There was a charge of Rs.3.6 Bn during Q3'13 and Rs.7.6 Bn during YTD Sep'13 on account of these forex items mentioned above. The Company made a provision for Mohali stock write-off and other costs amounting to Rs.0.7 Bn.

.Net Loss after tax, minority interest and share in loss of associate was Rs.4.5 Bn.

Commenting on the business results for the quarter, Arun Sawhney, CEO and Managing Director, Ranbaxy, said: "The Company continues to grow in its focus branded markets in Asia, East Europe, CIS and Africa. In India, however, the announcement of the pricing policy caused some uncertainty in the market, during which our sales in the home market faced some disruptions.

We are confident that we will satisfactorily address the increasing standards of quality and manufacturing processes to uphold the high level of trust that our Doctors, Patients, Regulators and other stakeholders expect from us." (ANI)

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JPMorgan in $5.1 billion deal with housing agency

By Aruna Viswanatha and David Henry

REUTERS - JPMorgan Chase & Co has agreed to pay $5.1 billion to settle claims that it and firms it bought misled Fannie Mae and Freddie Mac about the quality of mortgage securities and home loans it sold to them during the housing boom.

The bank and the agencies' regulator said Friday evening that the settlement was expected to be part of a tentative $13 billion deal that JPMorgan is negotiating with federal and state agencies over its mortgage bond liabilities.

But the unusually timed announcement, which appeared to catch other parties involved in the negotiations by surprise, covered not only $4 billion that was expected as part of the larger deal but also an additional $1.15 billion to cover separate issues over home loans.

The $4 billion portion of the payment, which was agreed on several weeks ago according to people familiar with the negotiations, resolves a 2-year-old lawsuit in which the regulator accused JPMorgan of overstating the quality of loans in mortgage securities in sold to Fannie and Freddie.

The agency became impatient waiting for the larger settlement and wanted to move on to resolving similar lawsuits it brought against other banks, one person said.

The additional $1.1 million resolves claims that JPMorgan breached the representations it made about the quality of single-family mortgages it sold the government-sponsored entities, the regulator said.

Negotiations on the final terms of the larger settlement are continuing, people familiar with discussions said on Friday.

While the parties have agreed to the framework of the deal, talks have slowed over whether JPMorgan can shift onto the Federal Deposit Insurance Corp liabilities of Washington Mutual, a failed lender which JPMorgan took over during the financial crisis.

The FHFA settlement leaves open the possibility for JPMorgan to recoup payments related to Washington Mutual. The Justice Department, which is leading the larger negotiations, is seeking a provision in the larger settlement that bars JPMorgan from seeking to push the claims onto FDIC, according to one of the people familiar with the talks.

It is unclear if the FDIC will be part of the larger settlement. FDIC spokesman Andrew Gray declined to comment.

The $13 billion settlement is also expected to include a $2 billion enforcement penalty for JPMorgan's mortgage securities sales which are being investigated by federal prosecutors in California; $4 billion of consumer debt relief; and $3 billion of assorted payments and compensation sought by other government agencies.

"This is a significant step as the government and J.P. Morgan Chase move to address outstanding mortgage-related issues," FHFA Acting Director Edward DeMarco said in a statement.

The bank, the largest in the United States, said the deal was "an important step towards a broader resolution" of the firms mortgage-related issues with government agencies. (Reporting by David Henry in New York and Aruna Viswanatha in Washington; Editing by Richard Chang)

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Jet Air posts worst quarterly loss of 8.91 billion rupees

By Devidutta Tripathy

NEW DELHI (Reuters) - Jet Airways reported its worst quarterly loss on record, squeezed by high fuel costs and a weaker local currency, as it awaits funds from the agreed sale of a stake to Abu Dhabi's Etihad.

Jet, which has lost money in the past six years, said on Wednesday it was awaiting approvals from some regulators for the Etihad deal, without specifying. The agreement, struck to help Jet break out of a pattern of losses in India's airline business, won the cabinet's approval earlier this month.

An Etihad spokesman declined to comment, when asked if Jet's record quarterly loss would have any impact on the deal.

An economic slowdown meant lower yields, a gauge of the average fare paid per kilometre flown, Mumbai-based Jet said in a statement.

A fall in the value of rupee, the high cost of fuel and an increase in fees at some airports also led to the loss, it added.

The net loss for Jet, India's second-biggest carrier by domestic market share, was 8.91 billion rupees for the three months ended September 30, compared with a net loss of 997 million rupees a year earlier.

The loss is the biggest ever for Jet, the first of India's airlines to publish earnings for the quarter, according to data compiled by Thomson Reuters from company filings. It reported a net loss of 7.1 billion rupees in the September quarter of 2011.

Despite the sector's current problems, deep-pocketed foreign players such as Singapore Airlines , AirAsia Bhd and Etihad have been lured to the country by longer-term growth prospects. The government expects passenger air traffic to almost triple during the current decade.

Etihad's $334 million deal for a 24 percent stake in Jet is the first investment by a foreign carrier in an Indian airline since the country last year changed rules to help channel capital into a sector.

But high costs of jet fuel and aggressive pricing as competition increases will likely hurt airlines' finances in the coming quarters, analysts say. Jet paid 8 percent more for fuel from a year earlier, it said.

Income from operations rose marginally to 37.88 billion rupees in the quarter ended September from 37.55 billion rupees a year earlier, Jet said, while expenses jumped nearly a fifth to 48.51 billion rupees. Some of its aircraft sat idle, accounting for 1.2 billion rupees in losses.

WORST PERFORMERS

All players in India's five-player airlines market are losing money with the exception of unlisted IndiGo, the biggest carrier by local market share.

Kingfisher Airlines , once the No. 2 carrier, has not flown in a year for want of cash. India's three listed airlines stocks - Jet, Kingfisher and SpiceJet - are the worst performers this year among 85 global airline stocks studied by Thomson Reuters StarMine.

Shares in Jet Airways are down about 38 percent this year, valuing the company at about $488 million. By comparison, the Nifty is up 4.6 percent.

(Additional reporting by Tripti Kalro in Bangalore and Praveen Menon in Dubai; Editing by Kenneth Maxwell and Mark Potter)

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JPMorgan in $4 billion deal with U.S. housing agency

By Aruna Viswanatha and David Henry

WASHINGTON/NEW YORK (Reuters) - JPMorgan Chase & Co has reached a tentative $4 billion deal with the U.S. Federal Housing Finance Agency to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold them during the housing boom, according to a person familiar with the matter.

JPMorgan and the FHFA, which is pursuing claims on behalf of finance agencies Fannie Mae and Freddie Mac, have agreed on the amount as a tentative part of a potential $11 billion global settlement with government agencies, including the U.S. Department of Justice.

The $4 billion figure was first reported on Friday by the Wall Street Journal.

A spokesman for JPMorgan declined to comment as did a spokeswoman for the FHFA.

The bank and the Department of Justice have discussed a broader deal under which JPMorgan would pay $7 billion of cash and $4 billion of consumer relief, to cover claims from the FHFA and other government agencies.

JPMorgan is seeking a single settlement to resolve all claims from federal and state agencies over its mortgage-related liabilities stemming from the bust in house prices.

Baring a complete breakdown in talks with the Department of Justice, a final deal between the bank and the FHFA is unlikely to happen outside of a broader pact, a person familiar with the matter told Reuters on Friday.

Earlier this week, others familiar with the talks said negotiations continued between the Justice Department and JPMorgan, with the bank circulating several proposals.

The FHFA has sued JPMorgan over mortgage loans totaling some $33 billion. A $4 billion deal would amount to about 12 cents on the dollar, less than the 20-cent rate under an earlier settlement by Switzerland-based bank UBS AG , said Josh Rosner, managing director of Graham Fisher & Co, a New York research consultancy.

At first glance, the tentative settlement looks like "a great deal for JPMorgan," Rosner said. He cautioned that it is unclear how comparable the deals are because the loans at issue have different origins and differences between the balances owed are not known.

CEO Jamie Dimon went to Washington to meet with U.S. Attorney General Eric Holder on September 26 to advance those discussions, but a deal has not been forthcoming.

Though Dimon is intent on getting the legal issues behind the bank, a sore spot with him and other JPMorgan directors has been how much the company will have to pay for bad mortgage deals done by Washington Mutual and Bear Stearns, two troubled institutions that JPMorgan took over during the financial crisis with the encouragement from bank regulators.

JPMorgan reported its first quarterly loss under Dimon on Friday as the company recorded a $7.2 billion hit from litigation expenses largely to build its reserves to settle lawsuits over mortgages. The bank said all of its legal reserves now amount to $23 billion.

(Reporting by David Henry and Karen Freifeld in New York and Aruna Viswanatha in Washington; Editing by Gary Hill and Leslie Gevirtz)

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Vedanta faces low demand for $1.2 billion offshore loan

By Tessa Walsh and Prakash Chakravarti

LONDON (Reuters) - Mining and energy conglomerate Vedanta Resources Plc is struggling to attract commitments for a $1.2 billion five-year term loan as international banks prove less willing to lend to top Indian companies, banking sources said.

Nearly $7 billion of Indian corporate loans are in the market, according to Thomson Reuters LPC data, after India's call to domestic banks to boost US dollar reserves in September prompted an offshore borrowing rush.

Most of the loans are for top private sector companies, but India's macroeconomic problems have taken a toll on sentiment among retail bank investors.

Vedanta's shares were under pressure this week, after Morgan Stanley analysts downgraded the company's stock rating and warned that its Zambian copper assets were overvalued.

The London-listed miner is facing a weak response on a $1.2 billion, five-year term loan A which refinances a $2.97 billion acquisition loan that backed Vedanta's acquisition of a 40 percent stake in Cairn India in 2011.

Low demand for the loan could leave its lead banks - Bank of America Merrill Lynch, Barclays, Citigroup, JP Morgan, RBS and Standard Chartered - overexposed and forced to sell the loan at a loss in the secondary market, bankers said.

The loan has attracted two commitments in senior syndication and three commitments in retail syndication so far, the bankers added.

Vedanta is also seeking to raise another $600 million loan to refinance a bond which comes due in January next year.

The $1.2 billion loan was originally part of a bigger $2.5 billion financing which also included a $1.35 billion bridge loan to a bond issue that was repaid in mid May.

Vedanta originally wanted to raise a bigger $3.5 billion deal but reduced it to $2.5 billion in April after negative investor feedback on a proposed term loan B.

STRUCTURE, PRICING PREDATE CRISIS

Vedanta's $1.2 billion loan was structured and priced before the rupee came under pressure in August after fears for the country's ailing economy spooked the markets.

Other loans for Indian companies are also receiving lukewarm responses as participant banks scale back lending to India. Taiwanese banks, which are some of Asia's largest lenders, are less willing to lend to Indian credits.

Reliance Industries , India's fourth biggest company by market value, has received one response in the general syndication of a $1.75 billion dual-tranche loan which was launched in early September.

A $370 million, five-year loan for technology, engineering, construction and manufacturing firm Larsen & Toubro , one of India's largest private sector companies, also launched general syndication in September but has attracted no banks to date.

Demand for Vedanta's loan has been low despite offering the richest pricing in the Indian offshore loan market. The deal has an interest margin of 275 basis points (bps) and all in pricing of 303.57bps.

"When negativity about India grips market participants, Vedanta is more affected than other companies," said one senior loan banker. "The current deal is a close reflection of true India risk."

Reliance Industries' deal pays top-level all in pricing of 170bps and 186bps for five and six-year money, while Larsen & Toubro's loan pays top-level all in pricing of 154bps.

The weak response to Vedanta's deal suggests that pricing may have to rise further to overcome investors' perception of increased risk in India.

Moody's said on September 12 that higher funding costs for Indian companies will put pressure on margins, particularly for companies challenged by slower growth prospects.

The ratings agency expects rates on rupee and foreign currency borrowing to rise.

Vedanta, which is controlled by former scrap metal dealer and billionaire Anil Agarwal, is facing rising regulatory risks on the metals and mining industry in India including iron ore mining, bauxite mining and alumina processing, according to a Fitch report. (Editing by Chris Mangham)

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