SBI Life to invest Rs 9,600 cr in share market in FY'12

NEW DELHI: Country's leading life insurer SBI Life will invest up to Rs 9,600 crore in Indian equity market this fiscal, taking its capital market exposure to over Rs 34,000 crore, a senior company official said today.

"We will make incremental investment of about Rs 16,000 crore in securities in 2011-12, of which 60 per cent would go to the stock market," SBI Life Insurance managing director M N Rao told PTI.

The life insurer has an investment of about Rs 25,000 crore in equities.

"This incremental investment will take the total exposure in capital markets to over Rs 34,000 crore," he added.

The company, which managed assets worth Rs 40,163 crore at the end of March 31, expects over 40 per cent growth in its assets under management (AUM) during the current fiscal.

"We expect to take our AUM to about Rs 60,000 crore. For this, we will make investments in market instruments," Rao said.

SBI Life Insurance is a joint venture between State Bank of India and France-based BNP Paribas Assurance. SBI owns 74 per cent of the total capital in the JV and the rest is held by BNP Paribas Assurance.

For the financial year ended March 2011, the life insurer reported a 33 per cent growth in net profit at Rs 366 crore. Its total premium income grew by 28 per cent to Rs 12,912 crore during the period.

During the fiscal, the new business premium collection stood at Rs 7,572 crore, which is a rise of 7 per cent over the previous financial year.

The company is planning new products in the unit-linked as well in traditional segment for which it has applied to the insurance regulator IRDA.

On company's plans to raise funds from the capital market, Rao said SBI Life is a well capitalised company and does not need funds as of now.

"We will wait for clarity on Insurance Bill and IPO guidelines. The initial public offer (IPO) is unlikely to happen in the next 2-3 quarters," he said.

The paid up capital of SBI Life Insurance stands at Rs 1,000 crore.

The Bill, pending with a Parliamentary Standing Committee, has proposed to increase the foreign share holding limit in an Indian insurance firm to 49 per cent from the present 26 per cent. PTI JD NKD MVS RAH 05011008 NNNN

RBI policy meet, Q4 results to decided market mood this week

NEW DELHI: The stock market may undergo a phase of consolidation this week in light of the RBI's policy meet on Tuesday and the announcement of the quarterly results of various companies, including Hero Honda Motors and Bharti airtel.

According to experts, there is a lack of a catalyst to lift the equity market out of its current range. Investors must not get adventurous for the time being and wait for more clarity on the direction of the main indices, they said.

"Overall, the sideways consolidation pattern could persist in May also, as quite a few key companies are yet to announce their results," IIFL Head of Research (India Private Clients) Amar Ambani said.

The Bombay Stock Exchange's 30-share Sensex index fell by 466.27 points to settle at 19,135.96 in the week gone by on FII selling, mixed corporate earnings, high inflation, hardening interest rates and concerns over the 2G scam.

"The RBI credit policy and quarterly results are the major factors to determine the market trend this week. Most of the global markets are at two-year highs after the US Fed kept interest rates unchanged at 0.25 per cent and announced a USD 600 billion treasury buy-back," Motilal Oswal Securities Associate VP Senior Analyst Technical Equities Parag Doctor said.

He said, however, that continued FII selling, fear of a hike in interest rates by the RBI and concerns over the 2G scam have created a negative sentiment in the market.

Analysts also said that investors must remain cautious as there are no major short-term triggers for the market to rise materially.

Market players also said that on May 3, the RBI is expected to raise key short-term rates again, as inflation still remains high. If the rate increase is 50 basis points, the market may look a little negative, they feared.

Bank of India will announce its Q4 results on May 2. Hero Honda Motors Q4 results will come up on May 4, followed by Bharti Airtel, Kotak Mahindra Bank and Cipla, whose results will be announced on May 5.
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