Mutual Fund Newsletter – September 16 to 20, 2013

India Infoline News Service | Mumbai |

The Reserve Bank of India (RBI) said on Monday it did not receive any bids at its special repo auction for mutual funds.

Top Stories

MF investments in debt funds at 6.4mn in April-July: SEBI
The number of individual investor portfolios in India declined 1.3 million to 41.5 million at the end of July 2013 from 42.8 million at end July in the previous financial year (April 2012-March 2013), according to SEBI (Securities and Exchange Board of India) data. The number of folios in equity schemes had fallen by over 1.4 million in April-July 2013-14 to 31.7 million at end-June from 33.1 million at end-March 2013, SEBI data added. The total number of folios in debt funds rose by about 0.22 million to 6.4 million at the end of July 2013 while the number of folios of exchange traded funds increased by over 2,960 to 0.74 million accounts at the end of July 2013, SEBI data showed... Read more

SEBI eases KYC rules for foreign investors

SEBI seeks to create atmosphere of trust in stock market
Market regulator SEBI (Securities and Exchange Board of India) plans to create an atmosphere of trust in the market, confidence in the investor and efficiency in the system. The regulator is working towards a “stricter and prompter enforcement” regime using the latest technology and strengthen insider trading norms, according to SEBI's annual report for 2012-13. An area of concern for SEBI is the lack of involvement by retail partipants as “more of domestic savings have been channelised into physical assets of late and financial savings have undergone a marked decline.”... Read more

PFRDA lets investors switch scheme for better returns
In order to offer an option for better returns, Pension Fund Regulatory and Development Authority (PFRDA) has relaxed rules to let small investors switch from the subsidised Swavalamban scheme to other schemes. "There were several requests from NPS Lite/Swavalamban subscribers seeking porting of their permanent retirement account numbers (PRANs) from NPS Lite/Swavalamban to the All Citizen Model of the new pension system (NPS). The PFRDA, after examining the matter, approved the shifting/porting of NPS/Lite/Swavalamban accounts to NPS-All Citizen model and other sectors," PFRDA said in a circular on 20th August... Read more

New Appointments

IDBI MF appoints Ganti Murthy as Head- Fixed Income
Ganti Murthy has recently joined IDBI Asset Management Ltd as Head-Fixed Income. He has 20 years of experience in the mutual fund industry having worked with SBI Funds Management Co. Ltd., UTI AMC and Cholamandalam AMC in various capacities in Funds Management Department. Murthy was Head-Fixed Income with Peerless Funds Management Co. Ltd., immediately prior to joining IDBI Asset Management Ltd. Murthy is a B.Sc (Hons) & holds a Masters in Financial Management from Jamnalal Bajaj Institute of Management Studies and a P.G. Diploma in Systems Management from NIIT.

Special Stories

Cos to make public details of buyback offer: SEBI
Market regulator SEBI (Securities and Exchange Board of India) has asked listed companies to make public the details of their buyback activities as mentioned under new regulations. Merchant bankers are also mandated to file a post-offer report with SEBI. Merchant bankers need to disclose details such as date on which previous buyback was authorised and completed, amount earmarked for the current buyback, whether the amount used is less than 50% of the amount earmarked, date of release of advertisement and name of newspapers where it was published, SEBI said in a circular on Tuesday... Read more

Domestic News

No bids at special repo auction for mutual funds: RBI
The Reserve Bank of India (RBI) said on Monday it did not receive any bids at its special repo auction for mutual funds. The special repo auction held at 10.25% permitted banks to borrow funds from the central bank to lend to mutual funds.

HDFC MF launches HDFC CPO-I-36M September 2013
HDFC Mutual Fund has launched HDFC CPO-I-36M September 2013, a Plan under HDFC Capital Protection Oriented Fund-Series I, a close-ended capital protection oriented income scheme. The scheme would be open for subscription between September 16, 2013 and September 30, 2013. The scheme is focused towards protection of capital... Read more

US Fed may reconsider tapering in FY 2014: IDBI MF
At the end of its two day meeting, the US Federal Open Market Committee had decided to continue with its current policy of Quantitative Easing of monthly bond purchases of USD 85 billion and refrained from announcing a reduction in the buying program or ‘tapering’. This was in a complete about-face from what it had said in its May meeting that it may resort of tapering of the bond purchase program, Ganti Murthy, Head–Fixed Income, IDBI MF, said.

The US Fed had worried world markets, especially emerging markets, when they had spoken about tapering its bond purchase program in May 2013. Currencies worldwide took a beating especially the rupee which fell in value of about 20% against the dollar. The market expected that the Fed, even if they do not resort to tapering the bond purchase program would at least announce a calendar for the same. What had spooked the Fed to reverse its own thinking was the rise in yields across all asset classes in the interregnum since May... Read more

SEBI signs MoU with Argentina's securities market regulator
Market regulator SEBI (Securities and Exchange Board of India) on Monday said it has signed an MoU (memorandum of understanding) with its counterpart in Argentina to promote mutual assistance and information exchange related to securities markets in both the countries. The MoU was signed by UK Sinha, Chairman, SEBI and Alejandro Vanoli, Chairman, Comisión Nacional de Valores, Argentina on September 16, 2013, during the 38th IOSCO annual conference being held in Luxembourg... Read more

Fed announcement to aid India to tackle inflation: IDBI MF
The decision by the Federal Reserve to postpone the rollback of its stimulus measures was greeted by the markets worldwide in general and India in particular, V. Balasubramanian, Fund Manager-Equity and Gold, IDBI MF, said. This move by Fed offers the policy makers in our country some more time to adjust and address domestic economic problems which were also accompanied by capital outflows. No doubt, the Fed may have to take the decision to scale down the bond buying programme sooner or later, but the dovish tone by the Fed provides the Government and the RBI some breathing space. This obviates the urgency to address all problems at one go. The announcement by Fed will help India to tackle the BoP crisis, inflation etc. The equity market viewed these as a positive measure and this move by Fed may give some sort of guidance to the RBI when it plans to review the mid-term monetary policy today. There is a chance that RBI may reverse partly, the monetary tightening measures it took during the second week of July 2013 and afterwards to address the currency crisis.

Learning

Company warrant: A part of your investment portfolio?

Most of us are familiar with financial instruments such as stocks, derivatives, options, mutual funds, etc. Some of these products also form a major part of our investment portfolio. In case, if some of us are not aware of these financial instruments, there is ample information available in books, newspapers and on Internet on these products. But have you heard about the term ‘company warrant’? Can a warrant certificate issued by a company comprise a part of your investment portfolio? The obvious answer for most of us would be‘ Don't know’... Read more

International News

ICI urges US SEC to refine money market fund proposal
ICI President and CEO Paul Schott Stevens made the following statement today as ICI filed its comment letter on the US Securities and Exchange Commission’s money market fund regulatory proposal:

“While ICI welcomes the SEC’s decision to exempt Treasury and government money market funds from structural changes, we urge the agency to extend similar exemptions to tax-exempt funds, to preserve the important benefits they provide in the economy. We also offer an alternate method of exempting funds for retail investors from structural changes to preserve individuals’ ability to use money market funds. Further, we caution the SEC against imposing dual regulations on money market funds, because doing so would drive investors into products that are less regulated and potentially riskier... Read more

Investors flooded into Hedge Funds in August
Hedge fund investor flows built upon the prior month’s increase to post the largest net inflows since August 2012. Investors added an estimated US$19.6bn during the month, the largest monthly inflow of the year. Performance losses reduced AUM by US$20.8bn, or -0.78%, resulting in a very slight monthly decline of overall industry AUM to US$2.688 trillion. Investor interest in equity exposure via hedge funds has increased in each of the last three months. August’s net inflow of US$8.6bn was the universe’s largest show of investor interest in nearly thirty months, since April 2011. Investors showed interest in both directional and non-directional exposure. Given that market neutral strategies are significantly smaller than directional equity, the large flows to the group are significant... Read more

US long-term MF inflows at $1billion in latest week: ICI
Total estimated inflows to US-based long-term mutual funds were $1 billion for the week ending Wednesday, September 11, 2013, the Investment Company Institute reported yesterday. Equity funds had estimated inflows of $5.24 billion for the week, compared to estimated inflows of $903 million in the previous week. Domestic equity funds had estimated inflows of $2.47 billion, while estimated inflows to world equity funds were $2.77 billion. Hybrid funds, which can invest in stocks and fixed income securities, had estimated inflows of $1.28 billion for the week, compared to estimated inflows of $349 million in the previous week... Read more

Hedge Fund Administrator Survey: Alternative AUA grows to $5.90 trillion by Q2 2013
Alternative investment assets under administration (AUA) of 38 firms stood at $5.90 trillion during the end of second half of 2013, according to the latest Hedge Fund Administrator Survey from eVestment. The survey found asset growth was ubiquitous across the industry with both small and large firms showing impressive assets under administration (AUA) gains. Average growth for the period was 14.15%, while median AUA growth was 12.74%... Read more
 

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