Mutual Fund Newsletter - October 07 to 11, 2013

MF industry’s investment in banking stocks worth Rs. 227.44 bn comprised 15.7% of the total equity AUM of Rs 1.45 trillion in August.

October 12, 2013 12:16 IST | India Infoline News Service
Top Stories

MF assets fall by 4.5% in Q3 2013: CRISIL

Indian mutual funds’ average assets under management (AUM) fell by 4.5% or Rs 384 bn to Rs 8.08 trillion during the quarter ended September 2013 compared to Rs 8.47 trillion in the previous quarter (excluding fund of funds) as per the latest numbers released by the Association of Mutual Funds in India (AMFI).

The quarter marked the sharpest fall in mutual fund assets since December 2010 as investor sentiments were hurt due to volatility in equity and debt markets following the weak Indian currency. On the category front, money market and ultra short term debt funds’ AUM declined by Rs 231 bn and Rs 183 bn, respectively, while equity funds lost Rs 127 bn... Read more

MFs invested funds worth Rs. 202.84bn in software stocks

Asset management companies (AMCs) exposure to the banking sector has declined Rs. 227.44 billion as on 31st August, which is the lowest level in four years, according to SEBI (Securities and Exchange Board of India) data.

The mutual fund (MF) industry’s investment in banking stocks worth Rs. 227.44 billion comprised 15.7% of the total equity assets under management (AUM) of Rs 1.45 trillion in August.

In August, the BSE Bankex Index fell almost 10%, while the S&P BSE Sensex decreased 3.75%... Read more

MF transactions via stock exchange infrastructure allowed: SEBI

Market regulator SEBI (Securities and Exchange Board of India) on Friday allowed Mutual Funds distributors to use the infrastructure of stock exchanges for purchase and redemption of mutual fund units directly from Assets Management Companies on behalf of their clients.

"It has been decided to allow MF distributors to use recognised stock exchanges' infrastructure to purchase and redeem mutual fund units directly from Mutual Fund/AMCs on behalf of their clients," SEBI said in a circular.

However, this facility was available for stock brokers and clearing members earlier... Read more

Special Stories

SEBI issues consultative paper on REITs

Market regulator SEBI (Securities and Exchange Board of India) on Thursday issued draft guidelines to set up real estate investment trusts (REITs) in India, five years after it had withdrawn a similar proposal.

The Consultative Paper and draft SEBI (Real Estate Investment Trusts) Regulations are placed on SEBI website for Public Comments.

REITs invest primarily in completed, revenue generating real estate assets and distribute major part of the earning among their investors. Typically, most of such investments are in completed properties which provide regular income to the investors from the rentals received from such properties... Read more

Cos raise Rs. 48bn through NCD route

Indian companies raised around Rs. 48 billion so far this financial year through non-convertible debentures (NCDs) to retail investors, according to the SEBI (Securities and Exchange Board of India) data.

Non-banking financial companies — Srei Infrastructure Finance, Shriram Transport Finance, Rural Electrification Corporation, India Infoline Finance and Muthoot Finance — had launched NCD this year to raise funds. In 2012-13, 15 companies had raised in nearly Rs. 170 billion via NCDs... Read more

SEBI to form norms for cancellation of erroneous trades

Capital market regulator SEBI (Securities and Exchange Board of India) said on Wednesday it would introduce regulations for the cancellation or modification of trades arising from any instances of erroneous trades on the stock exchanges.

The regulator proposed a framework for cancellation or annulment of trades to deal with the growing instances of freak trades.

The trades undertaken on the stock exchange are treated as final and their settlement is guaranteed by the clearing corporation of the stock exchange. Stock exchanges, however, under exceptional situations have annulled trades undertaken on their platform. Prevention of erroneous orders forms an important part of the risk management framework of the stock exchanges, SEBI said in notification... Read more

FM likely to raise PF wage cap to Rs. 15,000 per month

The finance ministry is considering a proposal suggested by the labour ministry to raise the statutory wage limit for provident fund contributions to Rs. 15,000 per month from Rs 6,500, according to a media report.

The objective is to reduce the government's borrowing costs, bring long-term savings into the infrastructure sectors and enhance investment in corporate bond market, the report added... Read more

Domestic News

UIDAI e-KYC accepted as address, identity proof: SEBI

Capital market regulator SEBI (Securities and Exchange Board of India) on Tuesday said it will accept e-KYC (Know Your Client) service of UIDAI as a valid proof of identity and address for opening accounts with brokerage firms, mutual funds, portfolio managers and other capital market entities.

The objective is to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets... Read more

SEBI to appoint Self Regulatory Organisation soon
Market regulator SEBI (Securities and Exchange Board of India) will soon appoint a Self Regulatory Organisation (SRO) for mutual fund distributors, according to a media report.
However, no specific time-frame is provided for the same.

SEBI will select one of three entities as SRO. The three organizations include Institute of Mutual Fund Intermediaries (IMFI), Organisation of Financial Distributors (OFD) and Financial Planning Standards Board India (FPSB), the report added... Read more

HDFC MF ranks 1st as the most profitable fund house in FY13

HDFC Mutual Fund stood first as the most profitable fund house in the financial year ended 31 March 2013, while Reliance Mutual Fund ranks second in the list.

HDFC MF registered a profit after tax (PAT) of Rs. 3.19 billion in FY12-13, while Reliance MF reported a PAT of Rs. 1.98 billion, according to an analysis of AMFI (Association of Mutual Funds of India) data.

HDFC MF recorded a PAT of Rs. 2.69 billion in FY11-12, while Reliance MF registered a PAT of Rs. 2.76 billion. UTI Mutual Fund PAT stood at Rs. 1.49 billion in FY12-13, whereas ICICI Prudential Mutual Fund's PAT was Rs. 1.1 billion.

RCap announces date for redemption of NCDs

Reliance Capital has announced the date for interest payments / redemption of its NCD (non-convertible bonds) series.

RCap NCD series are due between November 1, 2013 and November 30, 2013, the company said in a filing to BSE.

Union KBC Mutual launches Trigger Fund-Series 1

Union KBC Mutual Fund – subsidiary of Union Bank of India launches Union KBC Trigger Fund - Series 1, a close- ended equity scheme with a feature of inbuilt profit booking, to enable the investors to realize their profits at a pre-defined level and enjoy benefits of appreciation of the investments.

The New Fund Offer (NFO) of the Scheme will open on 14 October 2013 and will close on 25 October 2013. The NFO offer price is Rs 10 per unit. The minimum application amount is Rs. 5,000 and in multiples of Rs. 10 thereafter... Read more

India's retirement savings, income index improves: Mercer

India's retirement savings and income system index has improved over the last year and the performance is likely to improve significantly as pension coverage of the unorganised sector increases, according to the Melbourne Mercer Global Pension Index report.

India's overall value increased from 42.4 in 2012 to 43.3 in 2013, out of 100. Of the 20 nations on the list, India is ranked at the 19th position, Mercer said.


Costs of breaking your financial commitments
In business everything works on commitment basis. If one party flouts on a term agreed to, the other can refrain from keeping his. When you sign a document to pay via cheque, get a loan or start a mutual fund SIP you agree to abide by terms and conditions failing which the other party is not obliged to stand by their commitment.

It is understandable; sometimes it can be unintentional. An unexpected job loss or illness can cripple one's ability to keep to their financial commitments and obligations. We've covered various penalties that you can encounter for missing on these and also what steps you can take to reduce chances of attracting them or actions to follow if you land in the unfortunate situation... Read more

International News

Asia Pacific bond markets can be further strengthened: Moody's

Moody’s Investors Service’s managing director and regional head of the Asia Pacific region, Min Ye, said that while Asian bond markets have grown rapidly, particularly since the global financial crisis of 2008-09, more needs to be implemented to strengthen them.

Moody's recently released a report titled–“The Next Phase of Bond Market Development in Asia-Pacific”. The report discusses the progress made to date in developing local currency bond markets and the steps that are necessary to take this development to its next phase... Read more

IFC launches $1bn bond to strengthen India’s capital markets

IFC, a member of the World Bank Group, on Wednesday launched a $1 billion offshore bond program—the largest of its kind in the offshore rupee market—to strengthen India’s capital markets and attract greater foreign investment in a time of renewed economic uncertainty across the world.

Under the program, IFC will issue rupee-linked bonds and use the proceeds to finance private sector investment in India.

“Vibrant domestic capital markets ensure access to long-term, local-currency finance for the private sector—the key engine of job creation in emerging markets,” said Jin-Yong Cai, IFC’s CEO. “IFC’s offshore bond program will help bring depth and diversity to the offshore rupee market and pave the way for an alternative source of funding for Indian companies.”... Read more

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