Mutual Fund Newsletter – July 21 to 25, 2014

The actual implementation on the ground will propel the economy and the market to a new orbit

July 25, 2014 11:33 IST | India Infoline News Service
News this week

Govt may twist Budget 2015 proposal on debt MFs
The Budget 2014-15 aimed to lay down a roadmap for economic recovery and attempted to set in order the accounts, both in terms of deficit and quality of spending. The actual implementation on the ground will propel the economy and the market to a new orbit. However, a major drawback from a capital market viewpoint was the increase in rate of long term capital gains (LTCG) in debt mutual funds to 20% and the period for LTCG raised to 3 years instead of 1 year. The Ministry of Finance is now planning to twist the budget proposal for increasing capital gains to 20% for debt mutual fund investors... Read more

PSUs can invest funds in mutual funds
The government on Tuesday said that the public sector units such as Navratnas and Miniratnas are allowed to invest 30% of their surplus funds in Sebi-regulated public sector mutual funds. Minister of state for heavy industries and public enterprises P Radhakrishnan, in a written reply to the Lok Sabha, said, “It has been decided that Navratna and Miniratna CPSEs can invest 30 per cent of their surplus funds in Sebi-regulated public sector mutual funds.”

“It has also been decided that at least 60 per cent of surplus funds should be placed with public sector banks,” Mr Radhakrishnan added.

SEBI's advisory board suggests separate governance norms for big cos
SEBI's (Securities and Exchange Board of India) International Advisory Board has suggested separate governance standards for "big and complex business groups". The fourth meeting of the IAB of SEBI was held on July 18 & 19, 2014. Major issues discussed during the meeting were:

The IAB deliberated on various facets of corporate governance, e.g. Related Party Transactions (RPTs), Independent Directors, Remuneration of Directors, Audit committee, integrated reporting, etc. The IAB concurred with the approach adopted by SEBI towards corporate governance framework... Read more

Guidelines soon on real estate investment trusts: SEBI
The Securities and Exchange Board of India (SEBI) will soon come out with guidelines for Real Estate Investment Trusts and Infrastructure Investment Trusts. SEBI Chairman UK Sinha said that the regulator is planning to introduce guideline for Real Estate Investment Trusts and Infrastructure Investment Trusts in the next month. REITs will help the growth of the realty sector and there will be a lot of activities in the direction of infrastructure development as well. The SEBI will also come out with a new set of guidelines for Employee Stock Option Plan (ESOP) in the next two weeks.

SEBI issues clarifications on AIF norms
The SEBI issued clarification with respect to the circular on 'Guidelines on disclosures, reporting and clarifications under AIF Regulations'. SEBI has clarified that the deadline for sending of annexure to the placement memorandum to the investors is extended till August 31, 2014. With respect to disclosure of disciplinary history, the same shall be applicable for the last 5 years and where monetary penalty is involved, in cases where such penalty is greater than Rs. 5 lakh... Read more

High net worth business owners: The new philanthropists, StanChart says
In a recent study launched by Standard Chartered Private Bank in partnership with Campden Wealth Research, the Private Bank found that High Net Worth (HNW) business owners in Asia, Africa and the Middle East are highly focused on growing their business, and that personal wealth ambitions come second. The research has also revealed that amidst this focus on growing their businesses and increasing market share, HNW business owners prioritise giving back to their communities, but in ways that contrast to their counterparts in the developed world. “We recognise that entrepreneurs in our footprint of Asia, Africa and the Middle East are keen on philanthropic causes that have a measurable social and economic impact... Read more

Kotak Wealth Management launches 'Top of the Pyramid 2014'
Kotak Wealth Management launched ‘Top of the Pyramid 2014’ report in Mumbai. The report, covering the period 2013, encapsulates the ‘Ready for Change’ mood of India’s UHNHs, in the context of emerging changes across the economic, environment and political landscape of the country. The changing winds saw UHNIs become optimistic and confident which is reflected in their Spends - Luxury Travel, Philanthropy and Investments, with avenues like Private Equity being explored widely. The report estimates a 16% increase in the number of Indian UHNHs to around 117,000 in FY 2013-14, and expects it to triple over the next few years... Read more

PF account holders to get universal numbers
The Employees' Provident Fund Organisation (EPFO) is speeding up work on universal account numbers (UANs) for subscribers. Employees now are allotted another PF (provident fund) account numbers when they switch companies. Earlier, it used to take a while to get accounts transferred to new employers. Since EPFO switched over to online transfers in October 2013, this takes 30 days. This will become even faster with the UANs.

FIIs net investments at Rs. 376Bn in Q1 FY15
Foreign institutional investors (FIIs) have pumped investments worth Rs. 70,550 crore in Indian equities so far this year, according to a media report. During that period, about half their investment was in mid-and small-cap firms. FIIs have increased their stakes in about 150 mid- and small-sized companies during the quarter ended June, the report added.

Of the 350 mid-cap and small-cap companies that have declared their December quarter shareholding pattern so far, FIIs have increased their stakes in about half, or 172 companies. For 64 companies, the holdings remain unchanged, while in the remaining 114, FIIs cut stakes. In the June quarter, foreign investors made net investments of Rs 37,599 crore.

Assets of US retail money market funds rise to $896bn
Total money market fund assets decreased by $2.18 billion to $2.56 trillion for the week ended Wednesday, July 23, the Investment Company Institute reported. Among taxable money market funds, Treasury funds (including agency and repo) increased by $1.54 billion and prime funds decreased by $2.77 billion. Tax-exempt money market funds decreased by $950 million. Retail: Assets of retail money market funds increased by $2.84 billion to $896.27 billion. Among retail funds, Treasury money market fund assets increased by $2.44 billion to $200.09 billion, prime money market fund assets increased by $530 million to $510.18 billion, and tax-exempt fund assets decreased by $140 million to $186.00 billion... Read more

Leader Speak:

RBI rates to be on “hold” till March 2015: HSBC Global Asset
Tushar Pradhan, CIO, HSBC Asset Management (India) Pvt Ltd, says, “We expect rates to be on “hold” till March 2015. This is largely due to the RBI’s stated view that as long as inflation follows the “glide path” to 8%, it may not need to hike rates,”... Read more


Sleepless over low CIBIL score? Here’s how to rebuild it
Unexpected circumstances in life such as bankruptcy, job loss, divorce or a prolonged illness can derail your financial well-being. It is a vicious cycle – financial crunch could lead to payment defaults, which could take a toll on your credit score. Poor credit score dashes your hopes of future credit from prospective lenders. In such cases, rebuilding your credit history can be one of the toughest as well as important things to manage... Read more

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