Mutual Funds
Equity MFs continue to suffer outflows; net outflows of Rs270 crore in April

After a month of positive inflows in March 2013, equity mutual fund schemes witness another round of outflows in April 

Mutual funds, mutual fund, direct plan, equity mutual fund, mutual fund schemes, equity schemes, mutual fund inflow, equity fund inflow, fund flows, equity outflowsSales of equity mutual fund schemes touched their lowest since November 2012 and despite lower redemptions, equity schemes witnessed a net outflow of Rs270 crore last month. Redemptions were the lowest compared to the past 10 months, amounting to Rs3,407 crore. Poor sales is said to be the main reason for the net outflow from equity schemes. Sales of equity schemes amounted to just Rs3,136 crore, the lowest in the past five months. Not surprisingly, the number of equity folios declined further by another 2.64 lakh. Gold ETFs (exchange-traded funds) did not garner any interest as well and faced a net outflow of Rs36 crore.
Sales of equity schemes which picked up in the last quarter of FY12-13, could not maintain its upward trend. Sales in the quarter averaged around Rs4,500 crore per month. IDFC Equity Opportunity Series 1, a close-ended equity scheme, was the only scheme launched during the month and was able to gather around Rs253 crore in assets.

Mutual funds, mutual fund, direct plan, equity mutual fund, mutual fund schemes, equity schemes, mutual fund inflow, equity fund inflow, fund flows, equity outflows

In the past financial year, there has hardly been any growth in sales. Sales picked up only towards the end. Total sales in FY12-13 amounted to Rs43,364 crore, down nearly 35% from FY10-11 when total sales touched Rs66,592 crore.  Adding insult to injury, equity schemes witnessed massive redemptions leading to huge outflows. The year FY13 saw the highest outflows, which was as high as Rs14,766 crore. (Read: Equity MFs witness exodus of nearly Rs15,000 crore and 45 lakh folios in FY12-13)
Sales for the month of April 2013 declined by 3% from the same period last year. The reforms brought in by the regulator Securities and Exchange Board of India (SEBI) over the past year did not seem to have a positive impact on equity mutual fund inflows. 
Despite the poor sales, equity assets under management grew by 3.56% in April 2013 to Rs1.78 lakh crore from Rs1.72 lakh crore in March 2012. This is mainly due to the performance of the equity market over the period. The S&P BSE Sensex moved up by a similar percentage from 18,835 end of March 2013 to 19,504 at the end of April.



Suiketu Shah

3 years ago

Equity MF outflow continues and rightly so.This wl continue month after month atleast till elections of the country which are rumoured to be preponed a few months.


3 years ago

Where is this redeemed money going? - Chit funds? Collective Investment Schemes? Ponzi Schemes? MLM schemes? Gold?

What a pity . . . money has been going out of the most productive asset class and god knows where.

Whose fault? - Blame the agents, so simple.

Vaibhav Dhoka

3 years ago

March was positive due to ELSS and RGESS.And from April withdrawal starts and so the decline.

High Mark to sell 250 million records to another credit bureau?

High Mark Credit Information Services' promoter Prof Dr Pandya is negotiating with another credit bureau for an asset sale including about 250 million records collected from members. This is a gross violation of CIRC Act, alleges a former employee in a complaint to the regulator

Troubled and cash-strapped High Mark Credit Information Services Pvt Ltd, (High Mark Credit Bureau), one of the four credit information companies (CICs) in India licensed by the Reserve Bank of India (RBI), is negotiating with other credit bureaus to do an asset sale including 250 million records collected from member institutions, says a complaint. A former employee of High Mark has filed this complaint to the finance minister, RBI governor D Subbarao, secretaries from the finance ministry and financial services alleging gross violations in the proposed asset sale of the credit bureau.
Following the exit of several of its top managers and the failure of its rights issue last year, the credit bureau is under severe financial stress. Earlier, its promoter Prof Dr Anil Pandya, who lives in the US, tried to rope in a foreign rating agency to put in additional capital. However, it did not materialise.
This time Prof Dr Pandya is negotiating with an Indian credit bureau for the asset sale to circumvent any regulatory permissions. “If this (asset sale) goes through, then all the proceeds from asset sale would remain at Prof Dr Pandya's discretion, while the shareholders would get nothing until the company is liquidated. In short, after the asset sale, High Mark would have a license and cash but no business,” the complaint says.
The ex-employee pointed out that due to mis-management or absence of any management, High Mark, is at a stage where its existence is at stake. “This in turn jeopardizes the valuable records of various financial institutions including public sector banks, cooperative banks, micro finance institutions, etc. This also is a gross violation of the Credit Information Companies Regulations Act, 2005 (CICRA), as the data is collected after signing individual agreements with member institutions. The asset sale is being designed in such a way so that it would not require any approval from the RBI,” the former employee said.
Moneylife sent a mail to Prof Dr Pandya and would incorporate his reply as and when we receive it.
High Mark is the only bureau started by individuals. Prof Dr Pandya, whom the board designated as the executive chairman, started the business with nominal capital. While Prof Dr Pandya continued to be a tenured full Professor at the College of Business, Northeastern Illinois University in Chicago, and an Adjunct Professor at Northwestern University Kellogg Graduate School of Management, he was also appointed as executive chairman at High Mark.
While High Mark never appointed Prof Dr Pandya on a whole-time basis, he was able to continue teaching in the US as well work with the credit bureau on a part-time basis. As per the Credit Information Companies Regulations Act, 2005 (CICRA), when a credit bureau appoints a chairman on a part-time basis, it then must have a managing director or full-time director to look after the management and affairs of the bureau. 
According to our sources, High Mark violated CICRA as well as Companies Act, while appointing Prof Dr Pandya as its executive chairman. The issue was first raised by Siddharth Das, former chief operating officer (COO) of High Mark, before the company’s board. But the board apparently ignored it. Subsequently, Das sent a legal notice raising this issue. Ajay Kohli, former chief executive of High Mark, tried to bring this to the attention of the board. This too was ignored.
Earlier, High Mark was negotiating with Italy-based CRIF credit bureau for a bailout. We learned that CRIF executives had already met senior executives to assure them of support and continuity after takeover. However, there is no news on this front.
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Likely onset of fall on the Sensex, Nifty: Monday Closing Report

As mentioned, the previous day’s low has been breached, which may be an indicator of the beginning of the fall

Across-the-board selling in fast moving consumer goods, metal and capital goods sectors saw the market declining over 2% in trade today. As mentioned, the previous day’s low has been breached, which may be an indicator of the beginning of the fall. The National Stock Exchange (NSE) reported a turnover of 48.75 crore shares and advance-decline ratio of 381:035.
The market started the week in the negative tracking the Asian markets which were down in early trade. On the other hand, US markets closed higher on Friday on support from technology stocks. Local investors are focussed on the consumer price index (CPI) based inflation, which would be released later in the day.
The Nifty opened nine points lower at 6,098 and the Sensex resumed trade at 20,073, a cut of 49 points from its previous close, both below their psychological levels of 6,100 and 20,100, respectively. The benchmarks hit their highs in initial trade with the Nifty rising to 6,106 and the Sensex going up to 20,109.
However, selling pressure in fast moving consumer goods, capital goods, IT and auto stocks pulled the market lower as trade progressed. Easing of CPI inflation to single digits in April offered no comfort as the indices continued their southward journey.
Falling for the second straight month, retail inflation declined to 9.39% in April due to easing of prices of vegetables, edible oil and protein-based items. The CPI based inflation stood at 10.39% in the previous month.
A lower opening of the key European markets added to the investors’ woes in the noon session. The free fall due to selling by foreign investors led all 30 Sensex stocks lower in late trade.
The market touched its intraday low towards the close of the trading session with the Nifty declining to 5,973 and the Sensex dropping to 19,667. The benchmarks closed near their lows on broad-based selling. 
The Nifty closed 127 points (2.08%) down at 5,980 and the Sensex tumbled 431 points (2.14%) to finish the trading session at 19,692. Both the Nifty and the Sensex witnessed their biggest percentage falls since 8 May 2012.
Among the broader indices, the BSE Mid-cap index settled flat with a positive bias and the BSE Small-cap index gained 0.04%.
BSE IT (up 0.02%); BSE TECk, BSE Auto and BSE FMCG (up 0.01%) were the sectoral gainers. The top losers were Healthcare (down 0.09%); BSE Power (down 0.03%); BSE Bankex, BSE Realty (down 0.02% each) and BSE Metal (down 0.01%).
All 30 stocks in the Sensex list ended in the negative. The key losers were ITC (down 5.31%); Tata Steel (down 4.2%); Bharti Airtel (down 4.14%); Tata Motors (down 3.275) and Larsen & Toubro (down 2.96%).
The top two A Group gainers on the BSE were—Berger Paints (up 5.87%) and Bajaj Holdings (up 3.02%).
The top two A Group losers on the BSE were—TV18 Broadcast (down 10.20%) and United Phosphorus (down 5.50%). 
The top two B Group gainers on the BSE were—K Sera Sera (up 19.96%) and Kerala Ayurveda (up 18.68%).
The top two B Group losers on the BSE were—Elder Healthcare (down 19.94%) and Damodar Threads (down 19.91%).
Of the 50 stocks on the Nifty, 47 ended in the in the red and three remained unchanged. The main losers were ITC (down 5.12%); Reliance Infrastructure (down 4.97%); Bharti Airtel (down 4.27%); Tata Motors (down 3.67%) and Sesa Goa (down 3.44%).
Markets across Asia settled mostly lower as data from China revealed that industrial output in April rose 9.3% from a year earlier while fixed-asset investment grew 20.6% from a year ago, both slightly below expectations. On the hand, the Japan’s Nikkei 225 Stock Average gained 1.2% to its highest close since December 2007, as the yen fell to as low as 102.15 against the dollar, before trading at 101.73 in Tokyo.
The KLSE Composite advanced 0.88%; the Nikkei 225 surged 1.20% and the Seoul Composite rose 0.20%. On the other hand, the Shanghai Composite fell 0.22%; the Hang Seng dropped 1.42%; the Jakarta Composite declined 1% and the Taiwan Weighted lost 0.39%%.
At the time of writing, the key European indices were down between 0.28% and 0.62% and the US stock futures were trading in the red, indicating a lower opening for US stocks later in the day.
Back home, foreign institutional investors were net sellers of shares totalling Rs1.77 crore in the special trading session held on Saturday. On the contrary, domestic institutional investors were net buyers of equities amounting to Rs4.10 crore.
Indian FMCG major Dabur is set to broaden its current product portfolio in the Middle East region with a strategic launch of a new face care range, natural hair colour crème and an innovative deodorant range for teenagers, a media report said. The stock gained 0.89% to Rs164 on the NSE.
Oil and gas exploration major Cairn India plans to drill 48 wells at a cost of less than $100 million on the Mangala oilfield in the prolific Rajasthan block to extend the current production plateau. The new wells would be within the approved Field Development Programme (FDP) cost of $2.367 billion. The stock declined 2.66% to close at Rs296 on the NSE.
Turnkey engineering major Punj Lloyd on Monday said it has bagged ONGC’s Rs 730 crore B-127 cluster pipeline project in Mumbai. The B-127 cluster comprises three marginal fields: B-127, B-157 and B-59, which are located North of Mukta and additional development of B-55 Field and satellite asset in Bombay offshore basin. Punj Lloyd fell 0.83% to close at Rs53.80 on the NSE.



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