Staggered pull-out will help investors if the market continues to rise.
Experts say the impact on the schemes' NAVs may vary in the coming days, depending upon how fund houses treat the developments on VIL and whether there are any further rating downgrades or credit events.
Last October's circular meant that downstream investment by such funds by way of subscription or acquisition of shares would have been considered "indirect foreign investment" if their investment manager or sponsor is owned or controlled by a non-resident. The finance ministry has now said that mutual funds that invest more than 50 per cent in equity shall be omitted from the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
On an overall basis, Nomura believes the economic conditions are suited for equity markets. The brokerage is predicting the market performance will be better in the first half of 2020 and "somewhat weaker" in the second half.
Holding cash may actually help fund managers limit downside in the current environment, but large cash component poses the risk of missing out sharp upsides in a broader market rally, reports Jash Kriplani.
Sebi's stewardship code for mutual funds and alternative investment funds lays down six principles to improve corporate governance standards in their investee companies, reports Jash Kriplani.
Market experts say that FIIs have been caught off-guard on their exposures to companies with high-leverage and those facing cyclical headwinds.
Exchanges will have to facilitate a more direct interface between clients and the clearing corporation, bypassing intermediaries such as brokers, under this new proposed framework.
The IPO is an offer for sale of 38 million shares by SBI, BOB, LIC, PNB and T Rowe Price. Barring T Rowe and PNB, the others are selling stake to comply with Sebi norms.
Hopes of revival and earnings growth in 2020, surprise tax cuts, and robust foreign flows - thanks to easy global monetary policies - are a few reasons why the markets have managed to digest the low GDP footprint. Select bluechips such as Reliance Industries, Bajaj Finance, Asian Paints, and ICICI Bank have gained sharply this year. On the other hand, YES Bank, Zee Entertainment, and Indiabulls Housing have seen a sharp fall.
In the aftermath of the Karvy incident, lending against third-party collateral facility raises questions over regulations concerning banks and brokers which are at loggerheads. While Sebi and NSDL have ordered the transfer of securities, which were kept as collateral, lenders followed the old business model of sanctioning loan against shares and allegedly overlooked certain parameters. Legal experts feel that this could lead to a collapse of the loan-against-shares market as it raises questions over the sanctity of the pledged securities.
Equity MF schemes recorded worst inflows in three and a half years at Rs 1,311 crore for November. Investors across the board have taken money off the table as markets have scaled new highs. Industry experts said SIPs had stayed intact, which is a healthy sign for the MF industry.
Investment experts said the key to generating superior returns was "asset allocation" and taking money out of the table from themes that have performed well and into themes that are available at a discount.
Sebi has now said any default of payments of interest or principal on loans taken from financial institutions, including banks, will have to be disclosed if it continues beyond 30 days.
An infusion of capital would come as a much-needed relief for the bank, with its capital adequacy ratio barely above the regulatory requirements, as of June disclosures.
Experts say the trend is worrying as it could take a toll on the pace of equity flows and also hinder the penetration drive of the Rs 24-trillion MF industry.
In September, net equity inflows stood at Rs 6,609 crore, compared to Rs 9,152 crore in the previous month. In the last four months, this is the lowest net inflow tally seen by the equity category.
In an interaction with Jash Kriplani, A Balasubramanian, managing director and chief executive officer, Aditya Birla Sun Life Asset Management Company, shares his optimism on what makes him believe that these cuts can help in addressing multiple issues plaguing the economy, without letting fiscal deficit pose any major risk.
Market sources said other brokerages are also looking to streamline their business models as market volatility, along with increasing competition, has taken a toll on earning yields.
Market players say following the tax cuts, the market mood had changed from bearish to positive, which should help sustain the rally.
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