Mutual Funds Newsletter - June 09 to 13, 2014

India Infoline News Service | Mumbai |

Investors invested a net of Rs 1.5 trillion in various mutual fund schemes in May as against Rs 1.09 trillion in April.

Top Stories

MFs pump in funds worth Rs 1.5 trillion in May
Investors invested a net of Rs 1.5 trillion in various mutual fund schemes in May as against Rs 1.09 trillion in April. At the gross level, mutual funds garnered over Rs 17.06 trillion in May, while redemptions stood at Rs 15.6 trillion during the month. The net inflows in May climbed to Rs 1.46 trillion, the highest level in a single month since April 2011, when investors had pumped in Rs 1.84 trillion, as per Sebi data. Total assets under the management of mutual funds have grown to a record Rs 10.11 trillion as of May 31. In 2013-14, mutual funds had garnered almost Rs 540 billion from investors against Rs. 765 billion in the preceding financial year.

MFs folios decline 0.6% to 2.4 lakh in May
The mutual fund industrys assets under management crossed the Rs. 10 trillion mark in May, but there was a decline in MF folios in May. Total folios of the mutual fund industry fell by 2.4 lakh or 0.61% to 3.89 crore in May from 3.92 crore in April. Investors invested a net of Rs 1.5 trillion in various mutual fund schemes in May as against Rs 1.09 trillion in April. The industry has lost around 3.5 lakh folios in equity funds in April-May 2014 though the segment reported net inflow of Rs. 24.52 billion. The equity folio count decreased to Rs. 2.92 crore in May 2014 from 2.95 crore in April 2014... Read more

Domestic News

AMFI wants govt to hike investment limit u/s 80C
The Association of Mutual Funds in India wants the Finance Ministry to allow fund houses to introduce a mutual fund linked retirement plan, according to a media report. AMFI said that the plan would not be an annuity plan in nature. It would invest 60% in equities and 40% in debt in the beginning with the proportion of equities decreasing every year with the investor exiting at 55 years of age, the report added. AMFI also wants the government to increase its investment limit of Section 80C of the Income Tax Act from Rs. 1 lakh to Rs. 2 lakh, the report said. AMFI has asked for mutual fund schemes with a three-year lock-in as an avenue for investors to park their capital gains.

MFs report net inflow of Rs. 1.12 trillion in April: SEBI
During April 2014, mutual funds saw a net inflow of Rs. 1.12 trillion (of which Rs. 886.25 billion inflow was from private sector mutual funds while public sector mutual funds saw inflow of Rs. 1.24 trillion) as compared to a net outflow of Rs. 1,09,251 crore (of which Rs. 84,559 crore outflow was from private sector mutual funds while public sector mutual funds saw outflow of Rs. 24,692 crore) in March 2014. S&P BSE Sensex closed at 22,417.8 on April 30, 2014, as against 22,386.3 on March 31, 2014, registering an increase of 31.5 points (0.1%). During April 2014, Sensex recorded an intraday high of 22,939.3 on April 25, 2014 and an intraday low of 22,197.5 on April 07, 2014... Read more

MFs offload equities worth Rs. 26.98bn in April
Mutual Funds made net investment of Rs. 47,236 crore in the secondary market in April 2014 compared to net investment of Rs. 95,567 crore in March 2014. Mutual funds sold Rs. 2,698 crore in equity in April 2014 compared to Rs. 3,890 crore sold in March 2014. Mutual Funds invested Rs. 49,934 crore in debt market in April 2014 as against of Rs. 99,457 crore invested in March 2014. As on April 30, 2014 there were a total of 1,774 schemes under mutual funds of which Income / Debt oriented schemes were 1,313 (74%), Growth/equity oriented schemes were 365 (20.6%), Exchange Traded Funds were 40 schemes (2.4%), Balanced schemes were 30 (1.5%) and Fund of Funds investing Overseas schemes were 27(1.5%)... Read more

Uniform tax treatment needed for all pension funds: SEBI
Capital market regulator SEBI (Securities and Exchange Board of India) is seeking uniform tax treatment for all pension funds, according to a media report. A uniform tax treatment needs to be followed for retirement related investment products, whether investment is made through mutual funds or through EPFO (Employees' Provident Fund Office), the report added. SEBI has also sought tax benefits for mutual funds launching pension products, while it has also been suggested that EPFO be allowed to invest part of their over Rs 5 trillion corpus into equities and equity-linked mutual funds, the report further said. The regulator has also asked corporates to launch their own pension funds and invest a part of it in capital markets.

SEBI wants PSU to invest surplus cash in MFs
SEBI (Securities and Exchange Board of India) has suggested to the government that it should allow all PSUs to invest their surplus cash in mutual funds, according to a media report. The objective of the regulator is to attract more funds for long-term investment purposes and to revive the economy. The proposals are also aimed at bringing down the Indian markets' over-reliance on foreign money, the report added... Read more

Special Stories

Will government lower STT rates after all?
The market is on a roll and expectations are running high that the cost of transactions could reduce as far as the stock market is concerned. The Securities & Exchange Board of India has reportedly suggested that Securities Transaction tax should not be levied on investors when they buy stocks in the cash market.  In case of futures and options, only the seller pays STT and this perhaps explains why a lot of retail investors have jumped into this segment without really understanding the risks involved.  STT was earlier touted as a clean and efficient way of collecting taxes from financial markets... Read more
 
FIIs not to take up long position in IRFs: NSE
The NSE have asked foreign institutional investors (FIIs) not to take up long positions in the interest rate futures (IRFs). As per debt utilisation status available on NSDL the total investment in Government Debt (Auction) has reached INR 92,394 Crores on June 9, 2014 (i.e. 92.82 % of total permitted limit of INR 99,546 Crores), NSE said in a circular. FIIs are advised not to increase their long position in IRF till the time the overall long position of FII's in cash and IRF comes below 85% of existing permissible limit, NSE added.

Primary markets garner Rs10.44bn in May: SEBI
During April 2014, Rs. 1,044 crore were mobilised in the primary market (equity and debt issues) by way of five issues as compared to Rs. 10,749 crore mobilised through 18 issues in March 2014, showing a decrease of 90.3% from the previous month. Corporate sector mobilised Rs. 780 crore through four equity issues in April 2014 as compared to Rs 777 crore mobilised by the way of nine equity issues in March 2014. The cumulative amount mobilised for the financial year 2014-15 stood at Rs. 1,044 crore through five issues as against Rs. 134 crore through one issue during 2013-14. During April 2014, there wasnt any QIP issue. The cumulative amount mobilised through QIP route during 2013-14 stood at Rs. 13,663 crore through 17 issues.

FIs, NRIs can buy NCDs and debentures: RBI
The Reserve Bank of India on Friday allowed overseas investors and non-residents Indians to buy non-convertible and redeemable preference shares or debentures of publicly-listed Indian companies. This investment, however, will have to be within the overall limit of $51 billion earmarked for corporate debt, the RBI said. The present limits for investments by FIIs/FPIs, QFIs and long term investors registered with SEBI in corporate debt stands at $51 billion, the RBI said in a notification on Friday... Read more
 

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