Domestic asset management companies (AMC) have launched around 60 new fund offers (NFOs) in the last six months and mobilised around Rs 27,000 crore. Fund houses are rushing to launch new funds amid buoyancy in the equities market.
'We will likely be buffeted by tailwinds from the global economy, geopolitical shifts and robust domestic demand.'
'While there has been an impact on economic activity, it is not as profound as the lockdown last year.'
'Technology is streamliming the entire process of aid distribution and making it transparent and digital.'
With the disruption caused by the second wave of Covid-19 pandemic, the 'fear of unknown' is looming over the government's privatisation drive. Although there is a lot of uncertainty and unpredictability on how things will unfold, the government is hopeful of completing the transactions listed in the Budget with a delay of one to two months, said a top government official. However, "there are many unknown factors now, and we do not know whether there could be a third wave. But we are trying to carry on with our work", the official said." Since there is a lot of uncertainty, the estimates will have to be revised as rating agencies are revising their outlook for growth.
The BSE SmallCap index gained 106 per cent in the one year ended May 12, 2021.
The government may drop its plan to decriminalise cheque bounce offences after there were requests to continue the existing system, which can potentially make people honour their financial commitments due to fear of prosecution. It would seek directions from a Supreme Court panel formed to expedite the pendency of cheque bounce cases before taking a final call. Last year the Department of Financial Services (DFS) had proposed decriminalising minor offences, which included cheque bouncing, for improving business sentiment and unclogging court processes.
Top officials said asking employees other than the fund management team to mandatorily invest a fifth of their salary goes against the principle of natural justice.
The finance ministry has asked public sector banks (PSBs) to postpone the annual exercise of promoting and transferring their staff in the wake of the Covid-19 pandemic. The advisory issued by the Department of Financial Services (DFS) states that the promotion process has coincided with a spike in Covid-19 cases across the country along with localised lockdowns and an increase in micro-containment zones. As there are cases of bank employees or their family members being hospitalised due to Covid-19, bank, insurance companies and financial institutions must take cognizance of the issue, the advisory issued by DFS said.
Equity flows turning positive could give fund managers firepower to invest in the markets. This could come in handy as flows from foreign investors have tapered off amid rising bond yields in the US.
They say that a stimulus package may not be necessary because, unlike last year's total lockdown, public transport, including the railways and airlines, is running and the restrictions on movement are localised and, in some cases, are partial rather than total.
Industry players say improving the penetration beyond the top centres will require setting up more branch networks and empanelment of distributors.
Stocks mutual funds had invested in had risen almost to pre-pandemic levels in March.
The government can also individually exempt the PSBs, that are to be privatisated from the two Bank Nationalisation Acts. This will bring such lenders under Banking Regulation Act, and make them companies, reports Nikunj Ohri.
Partial lockdown measures may impact movement of labour & goods, they say.
Asset-weighted returns of large cap funds lagged their benchmark by 273 basis points, ELSS funds by 318 bps and mid- and small-cap funds by 230 bps.
An additional factor spurring the FMP launches is MFs' desire to retain investors as many such offerings are set to mature over the next two months.
The idea is to do away with the need for the approval of the Core Group of Secretaries on Divestment for privatisation of companies, especially in non-strategic sectors.
For development finance institution to succeed now, the government must stand like a rock behind it and be patient.
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