Mutual funds reported a record net investment in a single month at Rs 1,439 crore (Rs 14.39 billion) in the equity markets during March. The equity purchases of mutual funds till March 29, 2005, is the highest-ever net investments by the industry in a single month.
The previous record investment was witnessed in May 2004 at Rs 1,096 crore (Rs 10.96 billion). At the current rate, the industry may end up March with net investments of over Rs 1,500 crore (Rs 15 billion).
Of the 20 trading days in the current month, mutual funds invested more than Rs 100 crore (Rs 1 billion) in equities in eight days and Rs 50-100 crore (Rs 500 million-Rs 1 billion) was invested in another three days.
Mutual funds were sellers in only five trading days, with sales totalling Rs 333 crore (Rs 3.33 billion) in equities. However, data for the last one-year show that funds have bought equities heavily on every fall in the market and booked profits on every subsequent rise.
Last year, when the market reported negative returns in four months, mutual funds were net buyers to the tune of Rs 100 crore each in three months.
Only in February, despite a 157.92-point rise in the Bombay Stock Exchange Sensex, mutual funds reported net purchases of Rs 103 crore (Rs 1.03 billion).
In May 2004, following a 895.47-point fall in the Sensex, mutual funds purchased equities of Rs 1,096 crore (Rs 10.96 billion).
In January 2005 they bought Rs 479 crore (Rs 4.79 billion) equities, while the Sensex reported a 46.75-point fall. In the current month the Sensex has so far reported a 332.46-point fall. In the seven months between June and December 2004 mutual funds sold Rs 2,410 crore (Rs 24.1 billion) of shares, while the Sensex looked up by 1,843 points.
Interestingly, in the last four-and-half- years mutual funds were net buyers only in 19 months, while they were net sellers in the other 36 months.