KK Jalan, chief of Employees' Provident Fund Organisation

KK Jalan, chief of Employees' Provident Fund Organisation (EPFO) says it has "no option" but to change its rules and put money into riskier investments by buying stocks for the first time to seek higher returns. To get better returns, the fund with about $125 billion in assets needs to diversify investments, the bulk of which are in government debt.




Employees' Provident Fund Organisation (EPFO), world's ninth largest by assets, may change rules and buy stocks for the first time.

  • It invests about 5 per cent of its assets in AAA-rated corporate debt and a quarter in paper issued by state-run companies.
  • EPFO, funded by payroll contributions, holds 69 per cent of its assets in its provident fund. Another 29 per cent is invested in its $33 billion pension fund and the rest in a life insurance fund.
  • The fund now invests nearly 70 per cent of its annual accruals of about Rs 70000 crore ($11.5 billion) in central and state government bonds, through the State Bank of India , ICICI Securities, HSBC and Reliance Capital as its portfolio managers.

Sensex above closes above 27000

The Sensex rose 151.84 points to 27019.39, It touched all-time high of 27,082.85 and a low of 26,886.22 in trade.
Nifty climbed 55.35 points to 8083.05 after hitting intraday high of 27082.85 and 8101.95, respectively. The broader markets beat benchmarks with the BSE Midcap and Smallcap indices gaining nearly a percent.

The 30-share BSE Sensex closed above the 27000-mark for the first time while the 50-share NSE Nifty hit 8100 level intraday though it failed to hold the same level. The achievement of historical high was completely led by heavyweights like HDFC twins, ITC, Reliance Industries and Bharti Airtel, though selling in ICICI Bank and Tata Motors capped the somewhat upside.

Huge buying interest was seen in cement stocks on the back of higher growth in cement sector (at 16.5 percent in July versus 13.6 percent in June) among eight infrastructure sectors. Grasim Industries, ACC and Ambuja Cements rallied 3-4 percent.

Telecom stocks too were on buyers’ radar on reports that the Narendra Modi government has been planning a new super regulator for the communications sector. New regulator will be called as Communications Commission, which may replace Telecom Regulatory Authority of India (TRAI), said sources. Bharti Airtel was up 4.24 percent and Idea Cellular gained 3.4 percent
The current-account deficit - which mainly indicates that imports are in excess of exports - was 1.7% of gross domestic product at $7.8 billion in the fiscal first quarter.

It was 4.8% of GDP a year earlier, but just 0.2% in the January-March quarter. Strong dollar inflows ensured that India's balance of payment was in surplus in the April-June period.