Adj Q2 EPS of $1.03 tops Wall St. view of 99 cts
* Reaffirms full-year earnings forecast
* Shares slip in pre-market trade
NEW YORK, July 24 (Reuters) - Power company Exelon Corp (EXC.N), which earlier this week withdrew a hostile takeover bid for NRG Energy Inc (NRG.N), posted a 12 percent drop in second-quarter earnings on slack demand for electricity and higher costs for nuclear fuel.
Net earnings fell to $657 million, or 99 cents per share, from $748 million, or $1.13 per share, in the year-ago quarter.
Adjusted earnings for the quarter of $1.03 topped analysts' average forecast of 97 cents per share, according to Reuters Estimates.
The company, which owns the PECO utility in Pennsylvania and ComEd in Chicago, reaffirmed its expectation that it would earn an adjusted $4.00 per share to $4.30 per share for the full year.
Third quarter adjusted earnings are expected to be between 90 cents per share and $1.00 per share.
Shares in Exelon slipped 0.5 percent to $53.75 per share in premarket trading. (Reporting by Matt Daily, editing by Gerald E. McCormick
Investing your windfall
By Dene Mackenzie on Thu, 23 Jul 2009
Economic downturn Living smart
Paying off a mortgage and/or any debt should be a priority for anyone inheriting money during the current recession, a panel of experts selected by the Otago Daily Times recommends.
ABN Amro Craigs sharebroker Chris Timms, wealth management adviser Craig Myles, Forsyth Barr sharebroker Peter Young and financial planner Peter Smith were asked by the newspaper to provide some guidance to two selected groups - a family with three children, parents 35 years old, and with a $100,000 mortgage; and a couple aged 55, with children who had left home, and who had three grandchildren.
Each family was assumed to have inherited $350,000.
Younger couple
Paying off the mortgage, and any debt - either partially or in full, depending on circumstances - should be a priority for the young family who had inherited money, according to our panel of experts.
"This releases at least $750 a month, assuming a 20-year mortgage payment. To keep the mortgage requires $1.27 to be earned for every dollar paid into the mortgage," Mr Smith, the principal of Smith Financial Planning, said.
The couple should repay student loans and should join KiwiSaver, if they had not already done so.
If one parent stayed at home, he or she should still join, paying the minimum of $1040 a year into the scheme to get tax advantages.
With up to $250,000 left to invest, depending on things like repaying student loans, the couple could form a family trust.
Mr Smith recommended them spending up to $20,000 on an educational holiday, going to places such as Japan, Egypt, Turkey, Northern France and the United Kingdom, but also visiting fun parks in Australia on the way.
"It is good to see the world at a young age and understand some of our heritage, such as war zones."
The family could consider one major home renovation of up to $30,000.
Mr Smith recommended setting up an education fund for the children's university fees.
A balanced fund from any of the major providers, such as AMP, ASB, AXA, ING or Tower, would be suitable; but the fund probably needed to be $50,000.
Investing what was left:
• Cash fund for emergencies - $15,000.
• New Zealand fixed-interest PIE - $40,000.
• Listed property companies - $15,000 and reinvest distributions.
• New Zealand share-managed funds - $20,000.
• Managed funds in Australia and Asia - $60,000.
Mr Myles, a director of Myles Wealth Management, put $20,000 aside for emergency funds and assumed the spending needs of the younger couple would be met from income for the next five years.
He would put $67,500 in a defensive blend of high quality, highly rated and tax-efficient funds, invest in some property assets and use growth assets that would be currency-protected if they were international.
He would put $162,500 in growth assets, predominantly shares that were activity-managed and well diversified across countries, sectors, industries and companies.
Currency hedging would be put in place and Mr Myles had a preference for some protective strategies against prolonged falls in markets.
Mr Young suggested the couple seek recommendations for a growth portfolio investment, with the knowledge that as a growth investor they would prefer predominantly sharemarket investments with a small fixed-interest component.
As a growth investor, they would have to accept the portfolio might lose value for extended periods in the course of seeking capital appreciation over the recommended minimum period of, for example, five years.
A growth portfolio would have:
• Cash - a portfolio should have some available cash for emergency funds or any investment opportunity that arose.
• Fixed interest - a small weighting of fixed interest would provide some quarterly income to top up cash reserves.
• Property - a small exposure to the listed property sector would provide diversity and a good income from dividends of about 8% to 14%. Listed property stocks were also PIEs where the maximum tax paid on the dividend was 30%.
• Australian and New Zealand equities - Mr Young would have the largest weighting of the portfolio split between New Zealand and Australian shares.
Trading ban for 6 months not applicable to ESOPs
MUMBAI: Market regulator SEBI has clarified on the interpretation of certain amendments in the insider trading norms, in response to a few queries
The regulator said the six-month restriction for directors and employees to transact in shares of a company is only intended for trading on stock exchanges and not applicable to the exercise of employee stock options (ESOPs) and sale of these shares. Sebi noted that employees can subscribe to ESOPs, even if they have sold shares during the previous six months, but added that the restriction on market purchases for the next six months would be applicable, once shares bought through ESOPs are sold. The regulator also clarified that employees can sell shares in case of emergency on approval from the company’s compliance department. It also said employees are free to trade in Nifty or Sensex futures, subject to the company’s code of conduct. In response to whether the minimum holding period of 30 days while buying shares through an initial public issue would be applicable to bonus, rights share issues and ESOPs, Sebi said this restriction is limited to IPOs. It added that the company is free to decide the holding period for the others issue of shares.
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Where Goldman Really Makes Its Money
Goldman Sachs made $5.7 billion of trading revenue in the last quarter. That run rate (over $22 billion per annum) is almost as much as the pre-crisis peak.
Twenty-Two billion dollars per annum is roughly $200 per year per household in the United States.
If it is someone's trading revenue, it presumably comes out of someone else's pocket, so measuring it per household is appropriate.
The trading revenue of "Wall Street" investment banks (including Barclays ( BCS - news - people ), the trading parts of Citibank and similar entities) peaked at over $500 per household in the Western world
Broker snap: Housebuilders' rally a 'false dawn'
LONDON (SHARECAST) - KBC Peel Hunt, a long time bear on the housebuilding sector, is once again exhorting its clients to take profits on the housebuilders in the wake of what it regards as “a positive spin” put on housing market figures by property web site Rightmove. “Rightmove has hailed the bottom of the housing market, citing a 20% rise in new sellers as evidence. A rise in new sellers in fact has the opposite effect, correcting the buyer imbalance now driving the market,” KBC’s Robin Hardy argues. Hardy is also sceptical about the soothing noises coming from the industry during the recent round of trading updates. These “painted a picture of optimism: price stability, scope for margins to begin re-building and asset values to stop falling. This was based on the distorted price environment, a drift from second-hand into new homes and the favourable selling conditions resulting from available stock,” Hardy believes. The new build industry faces a “hard sell in the autumn,” in Hardy’s view, and “hopes of a return to selling 'off-plan' are a pipedream.” Turning to specific stocks, KBC believes that the recent advance by Barratt Developments – up almost 15% over the last week – probably makes a large cash call more likely, with the broker guessing that the company would tap the market for around £500m. With or without an equity issue, KBC believes Barratt’s valuation is “stretched on an NAV [net asset value] or EPS [earnings per share] basis.” The broker concedes that bulls are driving the share price direction of housebuilders at the moment but claims “the false dawn is coming to an end; a negative tone is set to return but not just yet.” Investors dedicated to maintaining exposure to the sector are advised to switch into “less exposed stocks such as Bellway, weaker performers such as Taylor Wimpey or stocks allied to transactions such as Travis Perkins
Where Goldman Really Makes Its Money
We still don't know the truth behind Goldman Sachs' trading profits.
Goldman Sachs made $5.7 billion of trading revenue in the last quarter. That run rate (over $22 billion per annum) is almost as much as the pre-crisis peak.
Twenty-Two billion dollars per annum is roughly $200 per year per household in the United States.
If it is someone's trading revenue, it presumably comes out of someone else's pocket, so measuring it per household is appropriate.
The trading revenue of "Wall Street" investment banks (including Barclays ( BCS - news - people ), the trading parts of Citibank and similar entities) peaked at over $500 per household in the Western world.
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Revenue like this is usually paid for a service. Ultimately I thought the service was intermediation between savers in China, Japan and the Middle East (who want Treasuries) and dis-savers in the Anglo countries (who want to fund exotic credit card debt and mortgages). That remains the only service that looks large enough to justify that sort of revenue. (The real service having been finding suckers such as municipalities and insurance companies to hold the toxic waste such as CDO squared re-securitization paper.)
That said, given almost nobody knows how to make $22 billion per annum trading and jealousy is a common trait, conspiracy theories abound. The current conspiracy theory is that this money comes from front-running clients in the market with very rapid trading. The New York Times recently promoted this view.
Trading ban for 6 months not applicable to ESOPs
MUMBAI: Market regulator SEBI has clarified on the interpretation of certain amendments in the insider trading norms, in response to a few queries
from companies. The regulator said the six-month restriction for directors and employees to transact in shares of a company is only intended for trading on stock exchanges and not applicable to the exercise of employee stock options (ESOPs) and sale of these shares. Sebi noted that employees can subscribe to ESOPs, even if they have sold shares during the previous six months, but added that the restriction on market purchases for the next six months would be applicable, once shares bought through ESOPs are sold. The regulator also clarified that employees can sell shares in case of emergency on approval from the company’s compliance department. It also said employees are free to trade in Nifty or Sensex futures, subject to the company’s code of conduct. In response to whether the minimum holding period of 30 days while buying shares through an initial public issue would be applicable to bonus, rights share issues and ESOPs, Sebi said this restriction is limited to IPOs. It added that the company is free to decide the holding period for the others issue of shares.
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Market fall pushes T. Rowe Price 2Q profit down
BALTIMORE -- Investment Manager T. Rowe Price Group Inc. said Friday second-quarter earnings fell as revenue from managing investments declined 27 percent from a year ago.
The company reported net income of $100 million, or 38 cents per share, compared with $162.2 million, or 59 cents per share. Revenue fell to $442.2 million from $586.5 million a year earlier.
Analysts surveyed by Thomson Reuters expected profit of 34 cents on revenue of $423.8 million.
The Baltimore-based company said investment advisory revenue earned from mutual funds distributed in the United States decreased 29 percent, or $100.7 million, to $248.8 million. Average mutual fund assets in the second quarter were $179.6 billion, a decrease of 26 percent from the average for the comparable 2008 quarter.
However, the company said that trend has reversed and it reported mutual fund assets at June 30 of $189 billion, up $30.2 billion from the end of March
HDFC Mutual Fund revises load structure
In accordance with the requirements specified by the SEBI circular no. SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009, no entry load will be charged for purchase / additional purchase / switch-in accepted by the Fund.
Similarly, no entry load will be charged with respect to applications for registrations under Systematic Investment Plan/ Systematic Transfer Plan / HDFC Flexindex Plan accepted by the Fund.
The upfront commission on investment made by the investor, if any, shall be paid to the ARN Holder (AMFI registered Distributor) directly by the investor, based on the investor's assessment of various factors including service rendered by the ARN Holder.
Exit LoadThe scheme will charge an exit load / CDSC (if any) up to 1% of the redemption value charged to the unitholder by the fund on redemption of units shall be retained by each of the schemes in a separate account and will be utilized for payment of commissions to the ARN Holder and to meet other marketing and selling expenses.
Any amount in excess of 1% of the redemption value charged to the unitholder as exit load/ CDSC shall be credited to the respective scheme immediately
RNRL, TCS, Wipro among favourite picks of fund managers in Jun
NEW DELHI: Software exporters Wipro, Tata Consultancy Services and ADA Group firm Reliance Natural Resources are among the companies which
fancy of fund managers in June, while Punjab National Bank and Indian Oil Corporation lost some flavour. An analysis of buy and sell transactions by mutual funds during May shows that the fund houses purchased stocks from sectors like power, software, housing finance and sugar, while offloading shares from banking, refineries and airlines. According to brokerage firm Sharekhan, state-run NTPC, ONGC, TCS, Essar Oil and Reliance Petroleum figure amongst the favourite picks by the equity funds in the month of May. Besides, MFs were also seen adding a couple of new stocks to the portfolio. The top new picks for equity funds includes, UCO Bank, Swaraj Mazda, Bhushan Steel and Purvankara Projects, the data compiled by Sharekhan shows. Besides, in the mid-cap equity funds portfolio stocks of Mahindra Satyam, RNRL, Hindalco Industries and Network 18 Media caught the fancy of the MFs. In the last month, domestic MFs have made complete exits from the portfolio of equity funds in the scrips of a host of firms including Ansal Properties, HOEC and Wire and Wireless.
Is There High Interest in a Low-Carbon Mutual Fund?
By Marc Gunther - Marc Gunther You want a car that gets good gas mileage and you want energy efficient appliances (or at least I hope you do). But do you want a low-carbon investment portfolio? The Green Century Balanced Fund is betting that you do. The Boston-based mutual fund says it is the first U.S.-based fund to disclose its carbon footprint, which is 66% less than the carbon intensity of the S&P 500 Index. Let’s be clear what we’re talking about here. This isn’t an accounting of how much energy the mutual fund company uses in its offices or how often its staffers get on planes. It’s an analysis of the tons of carbon emissions per million dollars of revenue that are generated by the companies held by the Balanced Fund, compared to the firms in the S&P 500. Why would you care? Not merely because you want to invest in mutual funds and companies that are greener and cleaner than average (although, again, I hope you do) but because those funds and companies will over time outperform their peers -- an arguable but much iffier proposition. In a prepared statement, Simon Thomas, the chief of executive of Trucost, a firm that did the analysis for Green Century, said:
"There will clearly be winners and losers from climate change regulation, with companies that are less carbon intensive than their sector peers standing to gain competitive advantage."
While, as they say, past performance is no guide to future returns, the tiny ($47 million in assets under management) Green Century Balanced Fund has, in fact, outperformed the S&P 500 Index over the last decade:
"The Green Century Balanced Fund’s returns for the one-, three-, five-, and ten-year periods ended June 30, 2009 were -13.36%, -3.78%, -1.05%, and 4.64%, respectively. The S&P 500® Index returns for the one-, three-, five-, and ten-year periods ended June 30, 2009 were -26.21%, -8.22%, -2.24% and -2.22%, respectively."
Of course, this is partly due the fact that Green Century is a “balanced” fund -- as of March 31, it held more than 40% of its assets in cash and bonds -- and stocks have underformed cash and bonds lately, to say the least. Still, there’s a big idea here -- that mutual funds, and not just companies, should be required to disclose the carbon footprints of their holdings. To learn more about that, I called up Cary Krosinky, a vice president of Trucost, which is based in the U.K. I’ve been meaning for some time to reach out to privately-held Trucost because one of its big investors is Robert A.G. Monks, the estimable shareholder advocate who I profiled in FORTUNE (“Investors of the World, Unite!“) back in 2002. Cary told me that Trucost published two relevant studies on the topic this year -- one on the carbon intensity of U.S. mutual funds in April, another on the carbon intensity of the S&P500 in June. The nonprofit Investor Responsibility Research Center (IRRC) commission the S&P 500 study, which found not just vast differences in the carbon intensity of companies across sectors (which you would expect) but also major differences within sectors (which you might not.) If, as now seems likely, Congress passes a cap-and-trade program to regulate carbon emissions and put a price on fossil fuel emissions, the impact on companies would vary widely. Assuming a market price of about $28 per ton of carbon-equivalent emissions, the study says:
"Exposure to carbon costs varies significantly across companies in the Index. Carbon costs would amount to less than 1% of EBITDA for 203 companies, while 71 companies could see earnings fall by 10% or more."
And:
"Financial risk from carbon costs is greatest in the Utilities sector, where EBITDA at a company level could fall by 2% to 117%."
As for mutual funds, they, too, vary widely in terms of their carbon exposure -- sometimes in unexpected ways. Trucost’s report, called Carbon Counts USA, examined the carbon performance of 91 mutual funds in the U.S., including 16 funds that say they focus on sustainability or socially responsible investing. It did not make all the results public, but it said “the footprint of the most carbon-intensive fund is over 38 times larger than the lowest-carbon fund, reflecting the range in potential carbon risk.”As you’d expect, the 16 funds that focus on sustainability or social investing have, as a group, the smallest carbon footprint, but some are much “greener” than others. Trucost found that the Sentinel Sustainable Core Opportunities Fund has a carbon intensity (692 tons of carbon equivalent emissions per $1 million of revenues of the fund’s holdingss) that is seven times as great as the Ariel Appreciation Fund, which has the smallest footprint (98 tons of carbon equivalent emissions per $1 million in revenues.) Green Century, meanwhile, reports that its footprint is 126 tons of carbon per $1 million in revenues, bigger than the Ariel Fund but just a bit more than half of the average of the sustainability funds tracked by Trucost. The 10 biggest holdings of the Green Century Balanced Fund, as of March 31, were IBM, AT&T, Xerox, Federal Home Loan Bank of Chicago, General Mills, SLM Corp., Telfonica SA, Johnson & Johnson, Advance Auto Parts and Oracle. Gustav Knepper Power Station in Dortmund, Germany What does this all mean? It’s too soon to say. Only over time will we be able to see whether low carbon stocks and funds, as a group, outperform those with higher carbon exposure. Already, though, some investors are factoring carbon into their long-term view. Trucost is using its data to develop investable indexes of low-carbon companies. “If enough investors look at carbon intensity,” Krosinsky tells me, “it will create a competitive dynamic and encourage companies to become more efficient.” More capital would then flow to clean tech, and less to coal plants like the one to the left.
Selloff money to go to National Investment Fund
NEW DELHI: The government on Friday said the disinvestment proceeds of public sector NHPC and Oil India Ltd (OIL) would be credited to the Nation
NIF), and ruled out any plan to restructure the fund. “The process of launching initial public offerings (IPOs) for NHPC and OIL is already in progress. The receipts from the disinvestment would be channelised into NIF,” minister of state for finance SS Palanimanickam said in a written reply to the Lok Sabha. The IPOs of NHPC and OIL are expected to hit the capital markets in August and September, respectively, while the disinvestment of other PSUs would be decided on a case-by-case basis. Asked whether the government proposed to amend the NIF, the minister replied in the negative. Under the existing guidelines, the disinvestment proceeds are deposited in the NIF, which is managed by three public sector mutual funds—UTI Asset Management Company, SBI Funds Management and LIC Mutual Fund Asset Management Company. The NIF currently has a corpus of Rs 1,815 crore. It generated an income of Rs 85 crore in the first year, Mr Palanimanickam said. As per the present rules, stake sale proceeds have to be put into the NIF and are not treated like other tax and capital receipts of the government. The government can use the interest from the fund only for social schemes and restructuring of ailing PSUs. Any change in the way NIF operates will have to be approved by the Cabinet Committee on Economic Affairs. The government is expected to put in place a road map for disinvestment in public sector enterprises by mid-August, for which consultations have already been initiated with various ministries. However, the government has ruled out any plan to go in for strategic sales of companies and would retain a minimum of 51% equity in these entities. The Economic Survey has recommended an annual disinvestment target of Rs 25,000 crore.
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Reliance Mutual Fund declares dividend for two schemes
Anil Dhirubhai Ambani Group firm Reliance Mutual Fund today announced a dividend of up to 50 per cent for its two schemes: Reliance Regular Savings Fund and Reliance Equity Opportunities Fund
The company would pay a dividend of 50 per cent or Rs 5 per unit and 30 per cent or Rs 3 per piece under the equity and balanced options of Reliance Regular Savings Fund, respectively, it said in a statement.
The fund house has also announced a dividend of 20 per cent or Rs 2 per unit under the retail and institutional plans of Reliance Equity Opportunities Fund. It has fixed July 24 as the record date for dividends.
"Reinforcing the investors' faith, Reliance Mutual Fund has maintained its strategy of giving timely and regular dividends on its schemes," Reliance Capital Asset Management CEO Sundeep Sikka said.
At the end of June, Reliance Mutual Fund has a corpus of over Rs 1,08,332 crore for over 71 lakh investors.
MFs give arbitrage funds a break, stop fresh inflows
MUMBAI: At a time when domestic mutual funds continue to aggressively scramble for more money to boost their asset base, they have made an exception
arbitrage funds. Several top arbitrage schemes of mutual funds have stopped accepting fresh money from investors, as lack of sufficient arbitrage opportunities between the cash and futures markets have made it tedious for them to generate competitive returns to the existing unitholders itself. Top schemes in the category, including Kotak Equity Arbitrage, UTI Spread, ICICI Prudential’s Blended Plans and Equity and Derivative Income Optimiser Plans, are no longer taking money, officials at these mutual funds told ET. Mutual fund distributors said HDFC Arbitrage, IDFC Arbitrage Plans and JM Arbitrage Advantage have also been closed to fresh subscriptions, though this could not be independently verified with them. Sandesh Kirkire, CEO of Kotak Mutual Fund, which manages the biggest arbitrage fund of roughly Rs 1,000 crore, said: “We decided to stop accepting fresh money, keeping in mind the interests of the existing holders because the market is hardly conducive for arbitrage.” Arbitrage schemes, considered relatively risk-free, aim to profit from the pricing anomalies between shares and equity futures. While they use at least 65% of their fund corpus to take advantage of such pricing anomalies, these hybrid schemes are structured to invest up to 35% of their corpus in money market papers such as certificate of deposits and commercial paper. Arbitrage opportunities are at its best in a bull market, when futures trade at a premium to the underlying shares or indices. This allows traders to buy the underlying and sell futures. Analysts say nowadays, futures are mostly trading at a discount to the underlying, resulting in fewer opportunities to cash in on the price differentials. The interest rate scenario of late has also not been favourable for these funds, unlike last year when they switched to money market instruments to sustain returns in the absence of arbitrage opportunities. In the bull run, these schemes aimed at returning 9-11%, but in the last year, average returns from this category have been roughly 7%, according to Value Research, a mutual fund tracker. Funds fear that the returns from this category would shrink further if assets grew more, with these schemes finding favour among the risk-averse investors, amid the existing uncertainty. “It did not make sense to accept more applications at the expense of the existing unitholders. This is a temporary measure,” said Nilesh Shah, deputy MD and CIO of ICICI Prudential Asset Management.
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SC to decide on 'dividend stripping' by mutual funds
The Supreme Court will decide whether mutual fund brokers can resort to a process (dividend stripping) of creating a short-term loss to avoid tax.
A Bench headed by Justice S H Kapadia has issued notice broking firms on a batch of petitions filed by the income-tax department challenging the Bombay High Court judgment that a broker was entitled to have his/her loss set off against income from any other transaction or source.
Dividend stripping happens when a mutual fund declares a tax-free dividend for unit-holders, who after taking the dividend exit the scheme. The net asset value of the scheme declines and unit-holders are able to show a capital loss. As a result, the exchequer misses a chance to tax capital gains.
However, the unit-holder gets the dividend and the mutual fund earns the entry and exit load.
According to the petition, these agents resort to dividend stripping as they know that after the dividend is declared, the net asset value (NAV) of the MF decreases.
Brokers purchase units at a higher price and sell them immediately after the declaration of dividend, knowing that the sale of such units would result in a loss, which they could adjust against the profits derived from the sale and purchase of shares and securities, it added.
In one case, the department alleged that Bang Security had received as dividend more than Rs 14 crore from mutual funds between 1999 and 2001 and had claimed exemption from tax under Section 10 (33) of the Income Tax Act, 1961.
However, at the same time it had shown a loss of Rs 14.35 crore incurred between 2000 and 2002 from purchasing units.
SBI Mutual Fund Uses IVR to Boost Customer Experience
An independent IT solutions and services company announced that it's implemented an interactive voice response, or “IVR” solution for an India asset management company to help manage its mutual funds arm.
Datacraft installed IVR technology at SBI Funds Management, a company that manages more than 100 different funds under SBI Mutual Fund, to help improve customer interaction and let customers use their voice to obtain the latest Net Asset Values of SBI’s Mutual Fund schemes.
The technology features a speech recognition solution powered by Nuance (News - Alert) that's designed to increase users’ experiences. The solution is designed to help SBI Mutual funds enhance customer satisfaction, reduce time to service people and increase agent productivity at the customer support center, the company said.
The speech-enabled IVR service will likely play a key role in improving the end-user interaction, Datacraft said. A touchtone-only environment would have made the system cumbersome and likely would have frustrated customers, officials said.
“The solution will improve customer service by offering more intuitive access to information and streamlining transactions,” said Sunil Manglore, CEO at Datacraft India, in a statement. “In addition, the solution will also increase customer satisfaction by shortening on-hold time and overall call duration.”
SBI Funds Management selected speech-enabled IVR based on surveys of customer calls and an analysis of call patterns. Datacraft India offered consulting and application development services to design and implement the IVR solution, the company said.
IVR services are crucial to ramping up a company’s brand image in the wake of growing competition in India's financial services sector. Datacraft’s deployment of such a service demonstrates the company’s ability to improve the interaction between clients and their customers, Manglore said.
The recent announcement supports a recent report from market research firm T3i Group that found that the global IVR market will grow to $514 million by 2013, up from an estimated $431 million this year. As TMCnet reported, the IVR market is growing because of a resurgence of self-service applications, as well as the power of VXML to link Web applications to voice.
A separate report by market research firm DMG Consulting predicted that the IVR solutions market will see a CAGR of 13.4 percent for the hosted/managed inbound IVR sector and 18.7 percent for the outbound IVR segment over the next four years.
Datacraft, a subsidiary of global IT solutions and services provider Dimension Data, operates more than 50 offices across 13 Asia Pacific countries. The firm helps clients plan, build, support, manage, improve and innovate IT infrastructures.
Amy Tierney is a Web editor for TMCnet, covering unified communications, telepresence, IP communications industry trends and mobile technologies. To read more of Amy's articles, please visit her columnist page.
* Reaffirms full-year earnings forecast
* Shares slip in pre-market trade
NEW YORK, July 24 (Reuters) - Power company Exelon Corp (EXC.N), which earlier this week withdrew a hostile takeover bid for NRG Energy Inc (NRG.N), posted a 12 percent drop in second-quarter earnings on slack demand for electricity and higher costs for nuclear fuel.
Net earnings fell to $657 million, or 99 cents per share, from $748 million, or $1.13 per share, in the year-ago quarter.
Adjusted earnings for the quarter of $1.03 topped analysts' average forecast of 97 cents per share, according to Reuters Estimates.
The company, which owns the PECO utility in Pennsylvania and ComEd in Chicago, reaffirmed its expectation that it would earn an adjusted $4.00 per share to $4.30 per share for the full year.
Third quarter adjusted earnings are expected to be between 90 cents per share and $1.00 per share.
Shares in Exelon slipped 0.5 percent to $53.75 per share in premarket trading. (Reporting by Matt Daily, editing by Gerald E. McCormick
Investing your windfall
By Dene Mackenzie on Thu, 23 Jul 2009
Economic downturn Living smart
Paying off a mortgage and/or any debt should be a priority for anyone inheriting money during the current recession, a panel of experts selected by the Otago Daily Times recommends.
ABN Amro Craigs sharebroker Chris Timms, wealth management adviser Craig Myles, Forsyth Barr sharebroker Peter Young and financial planner Peter Smith were asked by the newspaper to provide some guidance to two selected groups - a family with three children, parents 35 years old, and with a $100,000 mortgage; and a couple aged 55, with children who had left home, and who had three grandchildren.
Each family was assumed to have inherited $350,000.
Younger couple
Paying off the mortgage, and any debt - either partially or in full, depending on circumstances - should be a priority for the young family who had inherited money, according to our panel of experts.
"This releases at least $750 a month, assuming a 20-year mortgage payment. To keep the mortgage requires $1.27 to be earned for every dollar paid into the mortgage," Mr Smith, the principal of Smith Financial Planning, said.
The couple should repay student loans and should join KiwiSaver, if they had not already done so.
If one parent stayed at home, he or she should still join, paying the minimum of $1040 a year into the scheme to get tax advantages.
With up to $250,000 left to invest, depending on things like repaying student loans, the couple could form a family trust.
Mr Smith recommended them spending up to $20,000 on an educational holiday, going to places such as Japan, Egypt, Turkey, Northern France and the United Kingdom, but also visiting fun parks in Australia on the way.
"It is good to see the world at a young age and understand some of our heritage, such as war zones."
The family could consider one major home renovation of up to $30,000.
Mr Smith recommended setting up an education fund for the children's university fees.
A balanced fund from any of the major providers, such as AMP, ASB, AXA, ING or Tower, would be suitable; but the fund probably needed to be $50,000.
Investing what was left:
• Cash fund for emergencies - $15,000.
• New Zealand fixed-interest PIE - $40,000.
• Listed property companies - $15,000 and reinvest distributions.
• New Zealand share-managed funds - $20,000.
• Managed funds in Australia and Asia - $60,000.
Mr Myles, a director of Myles Wealth Management, put $20,000 aside for emergency funds and assumed the spending needs of the younger couple would be met from income for the next five years.
He would put $67,500 in a defensive blend of high quality, highly rated and tax-efficient funds, invest in some property assets and use growth assets that would be currency-protected if they were international.
He would put $162,500 in growth assets, predominantly shares that were activity-managed and well diversified across countries, sectors, industries and companies.
Currency hedging would be put in place and Mr Myles had a preference for some protective strategies against prolonged falls in markets.
Mr Young suggested the couple seek recommendations for a growth portfolio investment, with the knowledge that as a growth investor they would prefer predominantly sharemarket investments with a small fixed-interest component.
As a growth investor, they would have to accept the portfolio might lose value for extended periods in the course of seeking capital appreciation over the recommended minimum period of, for example, five years.
A growth portfolio would have:
• Cash - a portfolio should have some available cash for emergency funds or any investment opportunity that arose.
• Fixed interest - a small weighting of fixed interest would provide some quarterly income to top up cash reserves.
• Property - a small exposure to the listed property sector would provide diversity and a good income from dividends of about 8% to 14%. Listed property stocks were also PIEs where the maximum tax paid on the dividend was 30%.
• Australian and New Zealand equities - Mr Young would have the largest weighting of the portfolio split between New Zealand and Australian shares.
Trading ban for 6 months not applicable to ESOPs
MUMBAI: Market regulator SEBI has clarified on the interpretation of certain amendments in the insider trading norms, in response to a few queries
The regulator said the six-month restriction for directors and employees to transact in shares of a company is only intended for trading on stock exchanges and not applicable to the exercise of employee stock options (ESOPs) and sale of these shares. Sebi noted that employees can subscribe to ESOPs, even if they have sold shares during the previous six months, but added that the restriction on market purchases for the next six months would be applicable, once shares bought through ESOPs are sold. The regulator also clarified that employees can sell shares in case of emergency on approval from the company’s compliance department. It also said employees are free to trade in Nifty or Sensex futures, subject to the company’s code of conduct. In response to whether the minimum holding period of 30 days while buying shares through an initial public issue would be applicable to bonus, rights share issues and ESOPs, Sebi said this restriction is limited to IPOs. It added that the company is free to decide the holding period for the others issue of shares.
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Where Goldman Really Makes Its Money
Goldman Sachs made $5.7 billion of trading revenue in the last quarter. That run rate (over $22 billion per annum) is almost as much as the pre-crisis peak.
Twenty-Two billion dollars per annum is roughly $200 per year per household in the United States.
If it is someone's trading revenue, it presumably comes out of someone else's pocket, so measuring it per household is appropriate.
The trading revenue of "Wall Street" investment banks (including Barclays ( BCS - news - people ), the trading parts of Citibank and similar entities) peaked at over $500 per household in the Western world
Broker snap: Housebuilders' rally a 'false dawn'
LONDON (SHARECAST) - KBC Peel Hunt, a long time bear on the housebuilding sector, is once again exhorting its clients to take profits on the housebuilders in the wake of what it regards as “a positive spin” put on housing market figures by property web site Rightmove. “Rightmove has hailed the bottom of the housing market, citing a 20% rise in new sellers as evidence. A rise in new sellers in fact has the opposite effect, correcting the buyer imbalance now driving the market,” KBC’s Robin Hardy argues. Hardy is also sceptical about the soothing noises coming from the industry during the recent round of trading updates. These “painted a picture of optimism: price stability, scope for margins to begin re-building and asset values to stop falling. This was based on the distorted price environment, a drift from second-hand into new homes and the favourable selling conditions resulting from available stock,” Hardy believes. The new build industry faces a “hard sell in the autumn,” in Hardy’s view, and “hopes of a return to selling 'off-plan' are a pipedream.” Turning to specific stocks, KBC believes that the recent advance by Barratt Developments – up almost 15% over the last week – probably makes a large cash call more likely, with the broker guessing that the company would tap the market for around £500m. With or without an equity issue, KBC believes Barratt’s valuation is “stretched on an NAV [net asset value] or EPS [earnings per share] basis.” The broker concedes that bulls are driving the share price direction of housebuilders at the moment but claims “the false dawn is coming to an end; a negative tone is set to return but not just yet.” Investors dedicated to maintaining exposure to the sector are advised to switch into “less exposed stocks such as Bellway, weaker performers such as Taylor Wimpey or stocks allied to transactions such as Travis Perkins
Where Goldman Really Makes Its Money
We still don't know the truth behind Goldman Sachs' trading profits.
Goldman Sachs made $5.7 billion of trading revenue in the last quarter. That run rate (over $22 billion per annum) is almost as much as the pre-crisis peak.
Twenty-Two billion dollars per annum is roughly $200 per year per household in the United States.
If it is someone's trading revenue, it presumably comes out of someone else's pocket, so measuring it per household is appropriate.
The trading revenue of "Wall Street" investment banks (including Barclays ( BCS - news - people ), the trading parts of Citibank and similar entities) peaked at over $500 per household in the Western world.
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Revenue like this is usually paid for a service. Ultimately I thought the service was intermediation between savers in China, Japan and the Middle East (who want Treasuries) and dis-savers in the Anglo countries (who want to fund exotic credit card debt and mortgages). That remains the only service that looks large enough to justify that sort of revenue. (The real service having been finding suckers such as municipalities and insurance companies to hold the toxic waste such as CDO squared re-securitization paper.)
That said, given almost nobody knows how to make $22 billion per annum trading and jealousy is a common trait, conspiracy theories abound. The current conspiracy theory is that this money comes from front-running clients in the market with very rapid trading. The New York Times recently promoted this view.
Trading ban for 6 months not applicable to ESOPs
MUMBAI: Market regulator SEBI has clarified on the interpretation of certain amendments in the insider trading norms, in response to a few queries
from companies. The regulator said the six-month restriction for directors and employees to transact in shares of a company is only intended for trading on stock exchanges and not applicable to the exercise of employee stock options (ESOPs) and sale of these shares. Sebi noted that employees can subscribe to ESOPs, even if they have sold shares during the previous six months, but added that the restriction on market purchases for the next six months would be applicable, once shares bought through ESOPs are sold. The regulator also clarified that employees can sell shares in case of emergency on approval from the company’s compliance department. It also said employees are free to trade in Nifty or Sensex futures, subject to the company’s code of conduct. In response to whether the minimum holding period of 30 days while buying shares through an initial public issue would be applicable to bonus, rights share issues and ESOPs, Sebi said this restriction is limited to IPOs. It added that the company is free to decide the holding period for the others issue of shares.
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Market fall pushes T. Rowe Price 2Q profit down
BALTIMORE -- Investment Manager T. Rowe Price Group Inc. said Friday second-quarter earnings fell as revenue from managing investments declined 27 percent from a year ago.
The company reported net income of $100 million, or 38 cents per share, compared with $162.2 million, or 59 cents per share. Revenue fell to $442.2 million from $586.5 million a year earlier.
Analysts surveyed by Thomson Reuters expected profit of 34 cents on revenue of $423.8 million.
The Baltimore-based company said investment advisory revenue earned from mutual funds distributed in the United States decreased 29 percent, or $100.7 million, to $248.8 million. Average mutual fund assets in the second quarter were $179.6 billion, a decrease of 26 percent from the average for the comparable 2008 quarter.
However, the company said that trend has reversed and it reported mutual fund assets at June 30 of $189 billion, up $30.2 billion from the end of March
HDFC Mutual Fund revises load structure
In accordance with the requirements specified by the SEBI circular no. SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009, no entry load will be charged for purchase / additional purchase / switch-in accepted by the Fund.
Similarly, no entry load will be charged with respect to applications for registrations under Systematic Investment Plan/ Systematic Transfer Plan / HDFC Flexindex Plan accepted by the Fund.
The upfront commission on investment made by the investor, if any, shall be paid to the ARN Holder (AMFI registered Distributor) directly by the investor, based on the investor's assessment of various factors including service rendered by the ARN Holder.
Exit LoadThe scheme will charge an exit load / CDSC (if any) up to 1% of the redemption value charged to the unitholder by the fund on redemption of units shall be retained by each of the schemes in a separate account and will be utilized for payment of commissions to the ARN Holder and to meet other marketing and selling expenses.
Any amount in excess of 1% of the redemption value charged to the unitholder as exit load/ CDSC shall be credited to the respective scheme immediately
RNRL, TCS, Wipro among favourite picks of fund managers in Jun
NEW DELHI: Software exporters Wipro, Tata Consultancy Services and ADA Group firm Reliance Natural Resources are among the companies which
fancy of fund managers in June, while Punjab National Bank and Indian Oil Corporation lost some flavour. An analysis of buy and sell transactions by mutual funds during May shows that the fund houses purchased stocks from sectors like power, software, housing finance and sugar, while offloading shares from banking, refineries and airlines. According to brokerage firm Sharekhan, state-run NTPC, ONGC, TCS, Essar Oil and Reliance Petroleum figure amongst the favourite picks by the equity funds in the month of May. Besides, MFs were also seen adding a couple of new stocks to the portfolio. The top new picks for equity funds includes, UCO Bank, Swaraj Mazda, Bhushan Steel and Purvankara Projects, the data compiled by Sharekhan shows. Besides, in the mid-cap equity funds portfolio stocks of Mahindra Satyam, RNRL, Hindalco Industries and Network 18 Media caught the fancy of the MFs. In the last month, domestic MFs have made complete exits from the portfolio of equity funds in the scrips of a host of firms including Ansal Properties, HOEC and Wire and Wireless.
Is There High Interest in a Low-Carbon Mutual Fund?
By Marc Gunther - Marc Gunther You want a car that gets good gas mileage and you want energy efficient appliances (or at least I hope you do). But do you want a low-carbon investment portfolio? The Green Century Balanced Fund is betting that you do. The Boston-based mutual fund says it is the first U.S.-based fund to disclose its carbon footprint, which is 66% less than the carbon intensity of the S&P 500 Index. Let’s be clear what we’re talking about here. This isn’t an accounting of how much energy the mutual fund company uses in its offices or how often its staffers get on planes. It’s an analysis of the tons of carbon emissions per million dollars of revenue that are generated by the companies held by the Balanced Fund, compared to the firms in the S&P 500. Why would you care? Not merely because you want to invest in mutual funds and companies that are greener and cleaner than average (although, again, I hope you do) but because those funds and companies will over time outperform their peers -- an arguable but much iffier proposition. In a prepared statement, Simon Thomas, the chief of executive of Trucost, a firm that did the analysis for Green Century, said:
"There will clearly be winners and losers from climate change regulation, with companies that are less carbon intensive than their sector peers standing to gain competitive advantage."
While, as they say, past performance is no guide to future returns, the tiny ($47 million in assets under management) Green Century Balanced Fund has, in fact, outperformed the S&P 500 Index over the last decade:
"The Green Century Balanced Fund’s returns for the one-, three-, five-, and ten-year periods ended June 30, 2009 were -13.36%, -3.78%, -1.05%, and 4.64%, respectively. The S&P 500® Index returns for the one-, three-, five-, and ten-year periods ended June 30, 2009 were -26.21%, -8.22%, -2.24% and -2.22%, respectively."
Of course, this is partly due the fact that Green Century is a “balanced” fund -- as of March 31, it held more than 40% of its assets in cash and bonds -- and stocks have underformed cash and bonds lately, to say the least. Still, there’s a big idea here -- that mutual funds, and not just companies, should be required to disclose the carbon footprints of their holdings. To learn more about that, I called up Cary Krosinky, a vice president of Trucost, which is based in the U.K. I’ve been meaning for some time to reach out to privately-held Trucost because one of its big investors is Robert A.G. Monks, the estimable shareholder advocate who I profiled in FORTUNE (“Investors of the World, Unite!“) back in 2002. Cary told me that Trucost published two relevant studies on the topic this year -- one on the carbon intensity of U.S. mutual funds in April, another on the carbon intensity of the S&P500 in June. The nonprofit Investor Responsibility Research Center (IRRC) commission the S&P 500 study, which found not just vast differences in the carbon intensity of companies across sectors (which you would expect) but also major differences within sectors (which you might not.) If, as now seems likely, Congress passes a cap-and-trade program to regulate carbon emissions and put a price on fossil fuel emissions, the impact on companies would vary widely. Assuming a market price of about $28 per ton of carbon-equivalent emissions, the study says:
"Exposure to carbon costs varies significantly across companies in the Index. Carbon costs would amount to less than 1% of EBITDA for 203 companies, while 71 companies could see earnings fall by 10% or more."
And:
"Financial risk from carbon costs is greatest in the Utilities sector, where EBITDA at a company level could fall by 2% to 117%."
As for mutual funds, they, too, vary widely in terms of their carbon exposure -- sometimes in unexpected ways. Trucost’s report, called Carbon Counts USA, examined the carbon performance of 91 mutual funds in the U.S., including 16 funds that say they focus on sustainability or socially responsible investing. It did not make all the results public, but it said “the footprint of the most carbon-intensive fund is over 38 times larger than the lowest-carbon fund, reflecting the range in potential carbon risk.”As you’d expect, the 16 funds that focus on sustainability or social investing have, as a group, the smallest carbon footprint, but some are much “greener” than others. Trucost found that the Sentinel Sustainable Core Opportunities Fund has a carbon intensity (692 tons of carbon equivalent emissions per $1 million of revenues of the fund’s holdingss) that is seven times as great as the Ariel Appreciation Fund, which has the smallest footprint (98 tons of carbon equivalent emissions per $1 million in revenues.) Green Century, meanwhile, reports that its footprint is 126 tons of carbon per $1 million in revenues, bigger than the Ariel Fund but just a bit more than half of the average of the sustainability funds tracked by Trucost. The 10 biggest holdings of the Green Century Balanced Fund, as of March 31, were IBM, AT&T, Xerox, Federal Home Loan Bank of Chicago, General Mills, SLM Corp., Telfonica SA, Johnson & Johnson, Advance Auto Parts and Oracle. Gustav Knepper Power Station in Dortmund, Germany What does this all mean? It’s too soon to say. Only over time will we be able to see whether low carbon stocks and funds, as a group, outperform those with higher carbon exposure. Already, though, some investors are factoring carbon into their long-term view. Trucost is using its data to develop investable indexes of low-carbon companies. “If enough investors look at carbon intensity,” Krosinsky tells me, “it will create a competitive dynamic and encourage companies to become more efficient.” More capital would then flow to clean tech, and less to coal plants like the one to the left.
Selloff money to go to National Investment Fund
NEW DELHI: The government on Friday said the disinvestment proceeds of public sector NHPC and Oil India Ltd (OIL) would be credited to the Nation
NIF), and ruled out any plan to restructure the fund. “The process of launching initial public offerings (IPOs) for NHPC and OIL is already in progress. The receipts from the disinvestment would be channelised into NIF,” minister of state for finance SS Palanimanickam said in a written reply to the Lok Sabha. The IPOs of NHPC and OIL are expected to hit the capital markets in August and September, respectively, while the disinvestment of other PSUs would be decided on a case-by-case basis. Asked whether the government proposed to amend the NIF, the minister replied in the negative. Under the existing guidelines, the disinvestment proceeds are deposited in the NIF, which is managed by three public sector mutual funds—UTI Asset Management Company, SBI Funds Management and LIC Mutual Fund Asset Management Company. The NIF currently has a corpus of Rs 1,815 crore. It generated an income of Rs 85 crore in the first year, Mr Palanimanickam said. As per the present rules, stake sale proceeds have to be put into the NIF and are not treated like other tax and capital receipts of the government. The government can use the interest from the fund only for social schemes and restructuring of ailing PSUs. Any change in the way NIF operates will have to be approved by the Cabinet Committee on Economic Affairs. The government is expected to put in place a road map for disinvestment in public sector enterprises by mid-August, for which consultations have already been initiated with various ministries. However, the government has ruled out any plan to go in for strategic sales of companies and would retain a minimum of 51% equity in these entities. The Economic Survey has recommended an annual disinvestment target of Rs 25,000 crore.
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Reliance Mutual Fund declares dividend for two schemes
Anil Dhirubhai Ambani Group firm Reliance Mutual Fund today announced a dividend of up to 50 per cent for its two schemes: Reliance Regular Savings Fund and Reliance Equity Opportunities Fund
The company would pay a dividend of 50 per cent or Rs 5 per unit and 30 per cent or Rs 3 per piece under the equity and balanced options of Reliance Regular Savings Fund, respectively, it said in a statement.
The fund house has also announced a dividend of 20 per cent or Rs 2 per unit under the retail and institutional plans of Reliance Equity Opportunities Fund. It has fixed July 24 as the record date for dividends.
"Reinforcing the investors' faith, Reliance Mutual Fund has maintained its strategy of giving timely and regular dividends on its schemes," Reliance Capital Asset Management CEO Sundeep Sikka said.
At the end of June, Reliance Mutual Fund has a corpus of over Rs 1,08,332 crore for over 71 lakh investors.
MFs give arbitrage funds a break, stop fresh inflows
MUMBAI: At a time when domestic mutual funds continue to aggressively scramble for more money to boost their asset base, they have made an exception
arbitrage funds. Several top arbitrage schemes of mutual funds have stopped accepting fresh money from investors, as lack of sufficient arbitrage opportunities between the cash and futures markets have made it tedious for them to generate competitive returns to the existing unitholders itself. Top schemes in the category, including Kotak Equity Arbitrage, UTI Spread, ICICI Prudential’s Blended Plans and Equity and Derivative Income Optimiser Plans, are no longer taking money, officials at these mutual funds told ET. Mutual fund distributors said HDFC Arbitrage, IDFC Arbitrage Plans and JM Arbitrage Advantage have also been closed to fresh subscriptions, though this could not be independently verified with them. Sandesh Kirkire, CEO of Kotak Mutual Fund, which manages the biggest arbitrage fund of roughly Rs 1,000 crore, said: “We decided to stop accepting fresh money, keeping in mind the interests of the existing holders because the market is hardly conducive for arbitrage.” Arbitrage schemes, considered relatively risk-free, aim to profit from the pricing anomalies between shares and equity futures. While they use at least 65% of their fund corpus to take advantage of such pricing anomalies, these hybrid schemes are structured to invest up to 35% of their corpus in money market papers such as certificate of deposits and commercial paper. Arbitrage opportunities are at its best in a bull market, when futures trade at a premium to the underlying shares or indices. This allows traders to buy the underlying and sell futures. Analysts say nowadays, futures are mostly trading at a discount to the underlying, resulting in fewer opportunities to cash in on the price differentials. The interest rate scenario of late has also not been favourable for these funds, unlike last year when they switched to money market instruments to sustain returns in the absence of arbitrage opportunities. In the bull run, these schemes aimed at returning 9-11%, but in the last year, average returns from this category have been roughly 7%, according to Value Research, a mutual fund tracker. Funds fear that the returns from this category would shrink further if assets grew more, with these schemes finding favour among the risk-averse investors, amid the existing uncertainty. “It did not make sense to accept more applications at the expense of the existing unitholders. This is a temporary measure,” said Nilesh Shah, deputy MD and CIO of ICICI Prudential Asset Management.
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SC to decide on 'dividend stripping' by mutual funds
The Supreme Court will decide whether mutual fund brokers can resort to a process (dividend stripping) of creating a short-term loss to avoid tax.
A Bench headed by Justice S H Kapadia has issued notice broking firms on a batch of petitions filed by the income-tax department challenging the Bombay High Court judgment that a broker was entitled to have his/her loss set off against income from any other transaction or source.
Dividend stripping happens when a mutual fund declares a tax-free dividend for unit-holders, who after taking the dividend exit the scheme. The net asset value of the scheme declines and unit-holders are able to show a capital loss. As a result, the exchequer misses a chance to tax capital gains.
However, the unit-holder gets the dividend and the mutual fund earns the entry and exit load.
According to the petition, these agents resort to dividend stripping as they know that after the dividend is declared, the net asset value (NAV) of the MF decreases.
Brokers purchase units at a higher price and sell them immediately after the declaration of dividend, knowing that the sale of such units would result in a loss, which they could adjust against the profits derived from the sale and purchase of shares and securities, it added.
In one case, the department alleged that Bang Security had received as dividend more than Rs 14 crore from mutual funds between 1999 and 2001 and had claimed exemption from tax under Section 10 (33) of the Income Tax Act, 1961.
However, at the same time it had shown a loss of Rs 14.35 crore incurred between 2000 and 2002 from purchasing units.
SBI Mutual Fund Uses IVR to Boost Customer Experience
An independent IT solutions and services company announced that it's implemented an interactive voice response, or “IVR” solution for an India asset management company to help manage its mutual funds arm.
Datacraft installed IVR technology at SBI Funds Management, a company that manages more than 100 different funds under SBI Mutual Fund, to help improve customer interaction and let customers use their voice to obtain the latest Net Asset Values of SBI’s Mutual Fund schemes.
The technology features a speech recognition solution powered by Nuance (News - Alert) that's designed to increase users’ experiences. The solution is designed to help SBI Mutual funds enhance customer satisfaction, reduce time to service people and increase agent productivity at the customer support center, the company said.
The speech-enabled IVR service will likely play a key role in improving the end-user interaction, Datacraft said. A touchtone-only environment would have made the system cumbersome and likely would have frustrated customers, officials said.
“The solution will improve customer service by offering more intuitive access to information and streamlining transactions,” said Sunil Manglore, CEO at Datacraft India, in a statement. “In addition, the solution will also increase customer satisfaction by shortening on-hold time and overall call duration.”
SBI Funds Management selected speech-enabled IVR based on surveys of customer calls and an analysis of call patterns. Datacraft India offered consulting and application development services to design and implement the IVR solution, the company said.
IVR services are crucial to ramping up a company’s brand image in the wake of growing competition in India's financial services sector. Datacraft’s deployment of such a service demonstrates the company’s ability to improve the interaction between clients and their customers, Manglore said.
The recent announcement supports a recent report from market research firm T3i Group that found that the global IVR market will grow to $514 million by 2013, up from an estimated $431 million this year. As TMCnet reported, the IVR market is growing because of a resurgence of self-service applications, as well as the power of VXML to link Web applications to voice.
A separate report by market research firm DMG Consulting predicted that the IVR solutions market will see a CAGR of 13.4 percent for the hosted/managed inbound IVR sector and 18.7 percent for the outbound IVR segment over the next four years.
Datacraft, a subsidiary of global IT solutions and services provider Dimension Data, operates more than 50 offices across 13 Asia Pacific countries. The firm helps clients plan, build, support, manage, improve and innovate IT infrastructures.
Amy Tierney is a Web editor for TMCnet, covering unified communications, telepresence, IP communications industry trends and mobile technologies. To read more of Amy's articles, please visit her columnist page.
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