Mutual Funds
Equity mutual funds record highest net inflows in past three years

During May 2014, equity mutual fund net inflows crossed the Rs2,000 crore mark for the first time in 39 months. Equity schemes reported the highest sales of Rs10,224 crore since March 2008

Equity mutual fund schemes witnessed a burst of inflows as the Modi-led government came into power in the month of May. After witnessing steady net outflows over the past few years, equity mutual funds reported a huge net inflow in May amounting to Rs2,022 crore. The last time net inflows in equities crossed the Rs2,000 crore mark was in the month of February 2011, when the net inflows touched Rs2,843 crore. Equity mutual fund sales which averaged around Rs3,000-R4,000 crore per month over the past six years, witnessed a massive jump Rs10,244 crore in sales. . This was the highest sales for a month since March 2008 when around Rs11,671 crore was invested in mutual fund schemes.

Redemptions too increased significantly compared to the past month, hence, despite the record sales, the net inflow was much lower than February 2011. Redemptions from equity mutual funds was reported at Rs8,202 crore for May 2014.

While the record inflows will be cheered by fund houses, the unfortunate fact remains that savers enter the market at high valuations. At the current level, the market may not be as overvalued as the earlier peaks. However, as we have pointed out in earlier articles, those who are jumping in now are new investors who may neither have the patience nor the knowledge to hold for the long term if the market goes sideways from here. It will be interesting to see if inflows of this magnitude continue even under such sideways movements over a period.

This is one of the main reasons fund houses are continuously launching close-ended schemes. This restricts mutual fund investors from giving in to market volatility. Out of the six new fund offers that were launched in May, four of them were close-ended schemes. These six NFOs brought in a total of Rs970 crore. This has been the highest inflows from NFOs in a month since June 2010 when six NFOs brought in Rs1,068 crore.

While equity mutual funds added around 0.39 million folios in April 2014, around 0.35 million folios declined in May 2014. The total number of equity mutual fund folios stood at 29.22 million as on 31 May 2014.

Equity mutual fund assets under management shot up by 13% over the previous month to Rs2.17 lakh crore as on 31 May 2014 from Rs1.92 lakh crore as on 30 April 2014. A CRISIL report said, “The Indian mutual fund industry’s assets under management (AUM) scaled new highs, surpassing the Rs 10 trillion mark in May 2014. The industry’s AUM rose 7% or Rs 657.81 bn to Rs 10.11 trillion in May 2014 from Rs 9.45 trillion in the previous month, according to the monthly numbers released by the Association of Mutual Funds in India (AMFI).“ The rise in AUM was due to both, the market rally as well as the new fund inflows.



Kejriwal put on trial in Gadkari defamation case

The Court framed the charge after Kejriwal refused to heed the Magistrate’s suggestion to amicably resolve the case

Aam Aadmi Party (AAP) leader Arvind Kejriwal was on Friday put on trial by a Delhi court on charges of defamation on a complaint filed against him by Bharatiya Janata Party (BJP) leader Nitin Gadkari.


Metropolitan Magistrate Gomati Manocha framed the notice under Section 251 of the CrPC (dealing with issuance of summons in such complaints) against Kejriwal and fixed the matter for recording of evidence of Gadkari and his witnesses on August 2.


The Court framed the charge after Kejriwal, former Chief Minister of Delhi, refused to heed the Magistrate’s suggestion to amicably resolve the case filed against him by Gadkari. Even the Union Minister indicated that if the AAP leader was ready to withdraw his alleged defamatory statement he would drop his complaint.


“That on 30 January 2014, you made and published imputations/ statements against the complainant Nitin Gadkari in the media stating that he is a corrupt politician and that people should see whether they should vote....,” the Magistrate said in the order.


The Court, however, allowed the plea of Kejriwal seeking exemption from personal appearance.


After the court framed the notice, Kejriwal pleaded not guilty of the offence and claimed trial.


The court, in the morning session on Friday, had advised Kejriwal to bury the hatchet and amicably settle the issue with Gadkari.


“Why don’t you both shake hands before the Court and finish the matter on an amicable note? Why don’t you bury your hatchet and utilise time in a more productive manner?” the Court said.


“You both are renowned politicians, people look up to you,” the Court added.


Gadkari, who appeared before the Court in the case, told the court that honesty is his political strength and his reputation is his capital.


“I am an honest politician and damage has been caused to my reputation by the defamatory allegation levelled against me by Kejriwal. I don’t have any personal enmity against Kejriwal.” Gadkari said.


Gadkari also told the Court that he was ready to resolve the issue if Kejriwal withdraws his statement.


“I am ready to fight the legal battle. Let the inquiry against me proceed and charges be proved against me in public,” he said.


Kejriwal, however, refused to withdraw his statement and the allegations which he had levelled against Gadkari.


“I can’t withdraw my statement and allegation. I have documentary proof for all the allegations,” Kejriwal said.


On 27th May, Kejriwal had obtained bail from the trial Court by furnishing a personal bond.


Kejriwal was earlier summoned as an accused by the court in the defamation complaint in which Gadkari had alleged that he was defamed by the AAP leader who had included his name in the party’s list of “India’s most corrupt”.


Sumitra Mahajan is the new Speaker of Lok Sabha

Sumitra Mahajan, the longest-serving woman MP was unanimously elected as Speaker of the 16th Lok Sabha

Eight-term member of Parliament (MP), Sumitra Mahajan was on Friday unanimously elected as the Speaker of the 16th Lok Sabha, thus becoming the second woman presiding officer of the Lower House, after her predecessor Meira Kumar.

71-year-old Mahajan, the longest-serving woman MP from Indore, was elected after a motion moved by Prime Minister Narendra Modi and seconded by Bharatiya Janata Party (BJP) senior leader LK Advani was adopted by voice vote called by Protem Speaker Kamal Nath.

About 13 similar motions proposed and seconded by several parties in the ruling National Democratic Alliance (NDA) as also in the Opposition supporting Mahajan were also approved by the House.

Mahajan was led to the Speaker’s Chair by the Prime Minister, Advani, Anant Geete, M Thambidurai as also a number of Opposition leaders, including Mallikarjun Kharge, Mulayam Singh Yadav and Sudip Bandyopadhyay, besides Parliamentary Affairs Minister M Venkaiah Naidu.


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