Foreign assets of MFs decline to Rs. 31.9bn in end-March

Foreign liabilities of AMCs associated with the MFs increased by Rs 4.5 billion to Rs 32.9 billion in March 2013

February 10, 2014 4:49 IST | India Infoline News Service
The Reserve Bank of India today released the data related to the results of Survey of India’s Foreign Liabilities and Assets for the Mutual Fund Companies – 2012-13.
The data compiled are based on annual survey on India’s foreign liabilities and assets (FLA) of the mutual fund companies (MFs) and Asset Management Companies (AMCs) covering 45 companies which held/acquired foreign assets and/or liabilities during current and/or previous years.
Foreign liabilities of MFs with two broad components (i) units issued to non-residents and (ii) other foreign liabilities arising out of unpaid income/ dividend to non-residents, sale proceeds pending repatriation, etc., declined by Rs. 53.7 billion (US$ 1.5 billion) to Rs. 383.4 billion (US$ 7.0 billion) in March 2013. Units issued to non-residents, the major component of foreign liabilities at face value, declined from Rs. 256.6 billion in March 2012 to Rs. 217.4 billion in March 2013.
Foreign assets of MFs also declined from Rs. 39.3 billion in March 2012 to Rs. 31.9 billion (US$ 0.6 billion) as at end-March 2013; as a consequence, net liabilities of MFs declined by Rs. 46.4 billion (US$ 1.3 billion) to Rs. 351.4 billion (US$ 6.5 billion) in March 2013. Equity securities remained the major component of MFs foreign assets which declined from Rs. 38.0 billion in March 2012 to ` 30.8 billion in March 2013. None of the MF companies invested in debt securities abroad.
United Arab Emirates (UAE), USA, UK, Singapore, Mauritius, Canada and Hong Kong  were the major countries which together accounted for nearly 35 per cent of total foreign liabilities of the mutual fund companies in March 2013.
Luxembourg (with share of 58.4 per cent in March 2013) was the major country with respect to foreign assets of MFs, followed by USA (15.6 per cent) and Hong Kong (5.9 per cent).
Foreign liabilities of AMCs associated with the MFs increased by Rs 4.5 billion to Rs 32.9 billion in March 2013. Foreign assets of AMCs increased marginally from Rs 1.6 billion in March 2012 to Rs 1.7 billion in March 2013. As a consequence, net liabilities increased from Rs. 26.9 billion in March 2012 to Rs. 31.2 billion in March 2013.
Mauritius accounted for the maximum share of foreign liabilities (29.0 per cent), followed by UK (19.5 per cent) and Japan (15.8 per cent). Singapore and Guernsey accounted for more than two-thirds share in of foreign assets of AMCs in March 2013.
Reinvested earnings of the AMCs, which are estimated as the difference (positive or negative) between company’s net profit/loss and its distributed dividends, increased from Rs 2.9 billion in 2011-12 to Rs. 3.2 billion in 2012-13.

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