Mutual Funds Newsletter – August 18 to 22, 2014

Mutual funds (MFs) bought shares worth over Rs.5,000 crore in July, making it the highest monthly inflow in six-and-a-half years. MFs made net investments of Rs. 3,340 crore in June and Rs.105 crore in May

Aug 22, 2014 01:08 IST India Infoline News Service

News this week
 
MFs buy shares worth Rs. 5,000 crore in July
Mutual funds (MFs) bought shares worth over Rs.5,000 crore in July, making it the highest monthly inflow in six-and-a-half years. MFs made net investments of Rs. 3,340 crore in June and Rs.105 crore in May. In the first seven months of 2014, MFs sold shares worth over Rs.1,900 crore, while they invested Rs.3.94 lakh crore in the debt market. MFs offloaded shares worth Rs.14,208 crore in FY13-14 as against Rs.22,749 crore in FY12-13.
 
SEBI proposes to accord MF status to venture funds
The Securities and Exchange Board of India has proposed to accord venture capital funds the status of a specialized mutual fund, according to a media report. This proposal has been sent to the Union Finance Ministry recently. The objective is to provide venture capital funds tax exemption under Section 10 (23) D of the Income-Tax Act, the report added. Venture capital investors are liable to a 30 per cent capital gains tax. At present, the investors to whom it pays out are also taxed.
 
Reliance Capital Q1 net profit at Rs 1640mn
Reliance Capital Ltd has posted a profit after taxes, minority interest and share of profit / (loss) of associates of Rs. 1640 mn for the quarter ended June 30, 2014 as compared to Rs. 1330 mn for the quarter ended June 30, 2013. Total Income has increased from Rs. 19380 mn for the quarter ended June 30, 2013 to Rs. 21440 mn for the quarter ended June 30, 2014.
 
Govt looking to list UTI MF
UTI Mutual Fund may revive its initial public offer (IPO) plan after Finance Ministry's approval which is expected soon, according to a media report. However, no exact details have been provided about the launch of the IPO. Government has stake in the UTI Mutual Fund through public sector banks and insurance companies. State Bank of India, Punjab National Bank, Bank of Baroda and LIC holding stake in UTI Mutual Fund on behalf of government of India.
 
Reliance General Q1 net profit at Rs. 24.3 crore
Reliance General Insurance's first quarter profit zoomed 138% to Rs 24.3 crore in the period ended June 30, 2014, from Rs 10.2 crore in the same quarter last year. Reliance General's gross written premium for the quarter ended June 30, 2014 was at Rs 787 crore, a year-on-year increase of 11%. RGI accounts for 9% of the private general insurance market in terms of premium under written, up from 7.5% in the previous quarter, the company said. The company's investment book stood at Rs 4,495 crore -- up 31% from year-ago level -- as on June 30, 2014.
 
Franklin Templeton announces dividend in High Growth Companies Fund
Franklin Templeton Investments (India) has announced tax-free dividends in its open end equity fund - Franklin India High Growth Companies Fund (FIHGCF). The record date for the dividend is August 22, 2014 and any purchases on or before this date will be eligible for the dividend. Under the dividend reinvestment plan, the dividend declared will be reinvested in the Fund at the NAV of August 25, 2014 and unitholders will be allotted additional units for the dividend amount... Read more
 
Religare Invesco MF unveils Corporate Bond Opportunities Fund
Religare Invesco Mutual Fund announced the launch of its new fund Religare Invesco Corporate Bond Opportunities Fund (an open-ended income scheme). The Fund seeks to generate returns and capital appreciation by predominantly investing in corporate debt securities of varying maturities across the credit spectrum. The fund is a credit focused bond product seeking a high level of accrual income. At least 80% of net assets of the fund will be invested in private and public sector corporate bonds1 with an aim to take advantage of high-yielding corporate bonds. Investments will pre-dominantly be made in corporate bonds across varying maturities with ratings comprising between AAA and A- (by a credit-rating agency). The New Fund Offer of Religare Invesco Corporate Bond Opportunities Fund will close for subscription on August 28, 2014.
 
Special Stories
 
REITs to have a positive impact on small cos: Posiview Consulting
Funding through REITs (real estate investment trusts) will be available only to developers of large commercial properties like IT parks, malls etc as SEBI has stipulated asset with valuation of at least Rs 500 crore and issue size of Rs 250 crore for raising money through REITs, Vinit Deo, Chairman and Managing Director, Posiview Consulting Pvt. Ltd, said. Recently, Sebi issued final guidelines for REITs, settling several of the concerns raised by the real estate industry.
 
When these large developers start shifting their Project Loans from Banks to REITs, they will free up limits of Banks which have limited funds to lend to this capital intensive sector due to restrictions imposed by RBI. This indirect impact will have a positive impact on small and midsized developers especially in key cities like Mumbai, Pune, Bangalore, Chennai etc, Deo further said.
 
Posiview Consulting is a Real Estate focused investment advisory for the emerging real estate brands. They focus on delivering customized financial solutions and advisory to the emerging Indian real estate industry.
 
P-Notes investment drops to $34bn in July
According to the data released by the Securities and Exchange Board of India (Sebi), the total value of P-Note investments in Indian markets (equity, debt and derivatives) declined to Rs 2,08,284 crore at the end of July from Rs 2,24,248 crore in June, the highest level in more than six years. The June figure marked the highest investments into Indian shares through P-Notes since May 2008, when the cumulative value of such investments stood at Rs 2,34,933 crore. P-Notes are mostly used by overseas HNIs, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registration. 

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