Investors offload $370 mn from India-focused offshore funds in May
Foreign investors pulled out investments worth $370 million from India-focused offshore funds in May 2012 due to continuing uncertainty in both domestic as well as global economy.
In the last week of April, Standard & Poor’s said that it would revise India's sovereign outlook to 'Negative' from 'Stable'. This made investors redeemed $334 million in April. However, in February and March (before the S&P re-rating), investors invested funds worth $393 million and $14 million respectively in these funds , according to data from Morningstar.
India-focused funds attracted major investments in the first three months since January when broader markets gained in excess of 20%. On 11th June, the S&P cited economic slowdown and political roadblocks to policy-making and warned that India could be the first BRIC (Brazil, Russia, India, China) nation to lose investment-grade rating... Read more
Reliance Capital gets SEBI approval for 26% stake sale in RCAM
Reliance Capital has received SEBI (Securities and Exchange Board of India) approval for its proposed stake sale in Reliance Capital Asset Management (RCAM).
Approval for the stake sale has also been received on 13th June from the Monetary Authority of Singapore (MAS). The Reserve Bank of India (RBI), Competition Commission of India (CCI), and the Pension Fund Regulatory and Development Authority (PFRDA) have already granted their approval for the proposed stake sale.
The company had signed final agreements with Nippon Life Insurance to sell 26% stake in RCAM earlier this year, subject to regulatory approvals. Nippon Life will invest an aggregate value of Rs. 14.50 billion (US$ 290 million) to acquire 26% strategic stake in RCAM. The transaction pegs the total valuation of RCAM at approximately Rs. 56 billion (US$ 1.1billion)… Read more
AUM rises for 2nd consecutive month in May: CRISIL
According to a CRISIL Research report, the mutual fund industry’s month-end assets under management (AUM) rose for the second consecutive month to close marginally below the Rs. 7 trillion mark (Rs. 6.99 trillion) in May, gaining around 3% (Rs. 191 billion).
The report, issued on 8th June, said, “The AUM rise was mainly due to inflows into money market/liquid funds; equity and income funds too witnessed inflows.”
Equity funds witnessed a net inflow of Rs. 4 billion in May but assets declined on mark to market losses. Month end assets of equity funds declined by over 5% (Rs 92 billion) to Rs. 1.70 trillion at the end of May as the underlying equity markets represented by the benchmark S&P CNX Nifty fell by over 6% in May, dragged down by weak global and domestic cues… Read more
Fund Managers’ Speak
The Pitfalls of Protectionism: Mark Mobius
Free, fair and open trade is essential to fostering a thriving global economy. In the past, when economic conditions have deteriorated, we’ve seen governments in developed and emerging economies alike engage in protectionist policies. With growth in many countries slowing this year (tied in part to the crisis in the Eurozone), Mark Mobius says, “I’m concerned that protectionism could be on rise. In the end, I believe these policies don’t really protect anyone.”… Read more
“Safe haven demand has led yields on treasury bonds to ease,” says Franklin Templeton
Indian benchmark treasury yields eased on hopes the central bank will cut rates at its mid-quarter policy review scheduled later this month.
Signs of a slowing global economy along with intensification of the Euro area are likely to result in a concerted policy action by central banks across the world… Read more
“Softening oil prices with easing inflation strengthens monetary easing,” says Franklin Templeton
Hopes of monetary easing, positive global sentiment and initial signs of policy action helped Indian equities post a sharp rally the week and outperform global/Asian peers. The sharp bounce back in Indian equities was not surprising, given that the markets had been impacted by a slew of developments both in India and overseas and most of the negative news seem to have been priced in… Read more
Real challenges in Brazil: Mark Mobius
Brazil, the “B” in the emerging markets entities known as the “BRIC” countries (Brazil, Russia, India, China), has entered what I think can fairly be described as a rough patch of sluggish growth. Since my last update on Brazil, the country has experienced heightened economic challenges that threaten its competitive position to slip… Read more
“For the year 2012, we expect the Sensex to end with single digit returns,” says Peerless MF
Kaushik Dani, head of equity, Peerless Funds has over 16 years of experience in fund management, investments and related areas. Replying to Yash Ved of IIFL, Kaushik Dani says, “Global problems are very much in play due to the Eurozone debt crisis and slowing economic growth elsewhere in the world. This, coupled with deteriorating domestic macro-economic factors would keep the markets under pressure in the near term.”… Read more
NSE, India Post launch financial literacy initiative ‘Jagruti’ in Patiala
The National Stock Exchange (NSE) and the head post office of Patiala have started a financial literacy initiative in Patiala, Punjab. The alliance is part of a larger partnership with India Post to take the equity cult to the small towns and cities of India. These include Midnapore, Bhagalpur, Pushkar, Ajmer, Hardwar, Muzzafarnagar, Bilaspur, Vidisha and Bharuch.
NSE is putting up large sized screens at more than 50 post offices in the country, including the one at Patiala. The messages on the screens are aimed to increase awareness among people on safe investing and investor friendly products.
Joint Managing Director of NSE, Chitra Ramkrishna said, “We have constantly been trying to reach out to the tier-II and tier-III cities to bring more people into the formal financial system.’’… Read more
SEBI & NISM to start financial education in schools in two years
The market regulator SEBI (Securities and Exchange Board of India) and the National Institute of Securities Market (NISM) are planning to develop course material on financial education for high-school students.
To introduce financial education in schools, the NISM started talks with the finance ministry, human resource development ministry and others in August 2011. And SEBI is interacting with the Reserve Bank of India, and Insurance Regulatory and Development Authority… Read more
Net outflows stands at Rs. 410 million in May
According to the AMFI (Association of Mutual Funds in India) data, gold ETFs (exchange traded funds) have seen net outflows of Rs. 410 million in May 2012 compared to Rs. 510 million in April 2012.
The total net inflows in gold ETFs stood at Rs. 40.46 billion in 2011. The largest investment in gold ETFs was in September 2011, with net inflows of Rs. 9.88 billion. In March 2012, the assets under management (AUM) in gold ETFs stood at Rs. 103.12 billion, which is almost seven times the aggregate AUM of Rs. 15.09 billion for non-gold ETFs… Read more
ICICI Prudential PMS Real Estate Portfolio divests from KUL Ecoloch
ICICI Prudential PMS Real Estate Portfolio, a diversified real estate portfolio, has successfully divested its investment in KUL Ecoloch a township Project in Pune being developed by River View Properties Pvt Ltd, a subsidiary of Kumar Urban Development Ltd. The portfolio had invested Rs. 475 million and the investment has generated a gross IRR of about 27% on its investment.
Rahul Rai , Head-Real Estate, ICICI Prudential AMC said, “We believe in the tremendous potential of the reality space that is synchronous with India’s growth and are always looking at providing opportunity to our investors to participate in this asset class. Our investment in KUL Ecoloch and successful exit is a reinforcement of the return potential of this segment and the strength of our investment process that has helped accomplish this feat”. He further added “We are continuously looking out for such opportunities to invest with developers developing projects that we believe are likely to generate superior risk adjusted returns.”… Read more
Modification of KYC data
According to CDSL Ventures Ltd (CVL), a client can modify his KYC (know your customer) information (previously verified by KRA or KYC Registration Agency) after submission of completely filled modification form with documentary proofs to the intermediary.
The same may be updated by the intermediary through his KRA login, using the ‘Modify’ KYC option under the ‘KYC’ menu.
All the existing regulations and procedures pertaining to new KYC entry and dispatch would also apply to modifications in KYC data. Modification form for individual and non-individual category can be downloaded from—
The new KYC form may be used for modification of KYC data provided the word ‘Change’ is mentioned at the top of the KYC form.
CVL is a wholly-owned subsidiary of Central Depository Services (India) Ltd, a leading securities depository in the country.
Sundaram MF launches Fixed Term Plan-CW
Sundaram Mutual Fund has launched Sundaram Fixed Term Plan-CW, a close-ended income scheme with the duration of 367 days from the date of allotment of units. The new issue closes on 20 June 2012.
The objective of the scheme would be to generate income with minimum volatility by investing in debt and money-market securities, which mature on or before the maturity of the scheme. The scheme offers dividend payout and growth option.
The scheme will allocate up-to 100% of assets in money market instruments, short-term and medium-term debt instruments with low to medium risk profile. The scheme shall not make any investment in repo in corporate bond or in securitised debt. The minimum application amount is Rs. 5000… Read more
Deutsche MF launches Hybrid Fixed Term Fund
Deutsche Mutual Fund has launched DWS Hybrid Fixed Term Fund-Series 7, 39 months, a close-ended debt fund. The new issue will close on 27 June 2012.
The objective of the fund is to generate income by investing in high quality fixed income securities maturing on or before the date of the maturity of the scheme and to generate capital appreciation by investing in equity and equity related instruments. Growth and dividend (regular, quarterly and annual payout) option are offered under the scheme… Read more
Axis MF launches Axis Focused 25 Fund
Axis Asset Management has launched Axis Focused 25 Fund-an open ended equity fund. The fund will have a concentrated focus on select 25 best ideas at any point of time with a majority of companies being drawn from the top 200 Indian companies (based on market capitalization). The fund has been launched on the strong premise that quality companies tend to maintain their growth trajectory despite downturns.
Data compiled since 2003-2011 bears this out. Data indicates that the top 10 companies within the BSE 100 Index delivered an average return on equity of 37% as compared to 26% for the BSE 100 index.
Axis Asset Management Company Ltd will have strict internal risk management limits for the Axis Focused 25 Fund too. These limits will seek to ensure that the portfolio, though restricted to a maximum of 25 companies, is well-diversified across sectors and is not illiquid… Read more
L&T MF floats 91 Days Fund
L&T Mutual Fund has launched a new fund named as L&T FMP - VI (June91D A), a close ended income scheme having a tenor of 91 days. It would mature on 18 September 2012. The new issue will close on 19 June 2012.
The investment objective of the scheme would be to achieve growth of capital through investments made in a basket of debt/fixed income securities maturing on or before the maturity of the scheme. The scheme offers two options viz. growth and dividend (payout) option. The scheme would allocate up to 100% of assets in debt and money market instruments with low to medium risk profile… Read more
India ranks 23rd in financial literacy among 28 countries: Survey
When it comes to saving for emergencies, Indians lack financial planning, according to a global survey. Over 70% Indian respondents can barely manage personal economic emergencies for three months… Read more
Edelweiss MF announces change in fund management team
Edelweiss Mutual Fund has announced that Kapil Punjabi, fund manager-debt has resigned from the services of Edelweiss Asset Management and hence ceases to be a Key Person and Fund Manager of all the Fixed Income Schemes of Edelweiss Mutual Fund from the close of business hours of 6 June 2012… Read more
Investor sentiment is most pessimistic since summer 2011: Survey
Fears of a global economic slowdown have come sharply back into focus, and expectations of decisive action by policy makers have grown, according to the BofA Merrill Lynch Survey of Fund Managers for June.
A net 11% of the global panel believes that the global economy will deteriorate in the coming 12 months–the weakest reading since December 2011. Last month, a net 15% believed the economy would strengthen and the negative swing of 26 percentage points is the biggest since July-August 2011 as the sovereign crisis built. The outlook for corporate profits has suffered a similarly negative swing. A net 19% of the panel believes that corporate profits will fall in the coming 12 months. Last month, a net 1% predicted improving corporate profits… Read more