While the BSE Sensex lingered over the 20,000-mark in November 2013, equity mutual funds registered a net inflow of Rs699 crore with sales crossing the Rs5,000 crore mark, this being highest in the past 10 months
In the six months from April 2013 to September 2013, when the Sensex was below 20,000, nearly Rs10,000 crore flowed out from equity mutual funds. Monthly sales averaged Rs3,000 crore in these months. However, as the market continued its uptrend, equity sales more than doubled in the month of November to as high as Rs5,400 crore compared to Rs2,597 crore in October 2013. Last year, in an article we mentioned that majority of the investors buy when the market has already run up and is valued expensively (Read: Why people lose money in mutual funds). Seeing the current trend it seems that retail investors find it difficult to overcome this behavioural bias.
The only time equity mutual funds have registered similar high inflows are during the months January to March when investors opt for tax-saving schemes. A few months back in an email reply to Moneylife, Prashant Jain, executive director and chief investment officer at HDFC Mutual Fund said that, “Most of the retail investments in equity funds have come in high price-to-equity (PE) markets and not in low PE markets. Instead of focusing on past returns and investing when past returns are good, investors should in my opinion, do the opposite—Invest more when the past returns are less (resulting in low PEs) and vice versa.” Unfortunately, from the current trend it seems that very few retail investors follow this prudent advice.
According to CAMS (Computer Age Management Services) data, which account for 60% of the industry, just 54% of the redeemed values were done so with a gain for equity redemptions done during the period July 2013 to September 2013. This was much lower compared to the period January 2013 to March 2013 where 76% of investors redeemed with a gain and 66% for redemptions done in Q1FY14. This just exemplifies the fact that a significant portfolio of the investments are made at high market values.
When the market is rising, everyone rushes in—investors, mutual funds, advisors and so on. While investors rush in to invest, fund houses launch new fund offers (NFOs). Mutual funds seem to use to their benefit the behavioural bias of investors and launch NFOs exactly at the same time the market is moving up. In the month of November there were as many as four equity NFOs. These four NFOs contributed 16% or Rs871 crore to the total sales. This came in as a surprise, as in the seven month period from April 2013 to October 2013, just four NFOs were launched gathering total assets worth just Rs419 crore.
Despite the positive inflows in November, over the past 12 months equity mutual funds have registered a net outflow of Rs12,949 crore.
Only 50% of companies in the advertising and media world in Mumbai have a committee to address sexual harassment reveals a survey
Only half of the companies in the advertising and media fraternity in Mumbai have a committee to address sexual harassment. Over 60% of women feel their commitment to an organization would be questioned if they opted for flexible working hours. Inversely, 35% of men felt uncomfortable to opt for a flexible work schedule. These are some extremely relevant findings from a perception study of gender equality in the media and advertising industry in Mumbai.
The “Gender Equality in the Workplace Survey” was conducted among mid to senior level professionals, by Social Access Communications, a communication firm that works for social change on behalf of NGO Population First, which tackles population and health issues within the framework of women’s rights and social development. The survey was circulated among over 600 professionals, and received 130 responses.
The survey results were revealed as part of a larger agenda to sensitise advertising professionals to be more gender neutral, through a workshop ‘Men are from Venus, Women are from Mars’, hosted by Population First, on 29 November 2013. The workshop was supported by UNFPA, and designed and managed by Social Access Communications.
Gender stereotypes have firmly rooted themselves in the workplace over the past many decades, and gender-based perceptions subconsciously determine most responses to situations. Lately however, there are signs that things are changing.
Women’s empowerment is one of the foremost discussions in modern India, and not surprisingly the corporate world also has to deal with difficult questions. The reality is more and more women are joining the workforce today, and the equation will only increase. It is therefore imperative to bring the issue of gender equality into prominence at the workplace. It is necessary to undertake measures to change attitudes to be more gender neutral. With this in mind, the survey was designed to garner a better understanding of the ground situation, and to help employees be better prepared for change.
The survey details that 91% of employees ‘feel valued’, with 40% of the respondents from the 35-55 age group. Also, 88% of people say their employers genuinely support equality between men and women.
“By and large the advertising industry treats men and women fairly, and that is a heartening piece of news. However, there is significant scope for improvement as far as sensitivity towards sexual innuendo is concerned,” said Lynn de Souza, the founder of Social Access Communications, the knowledge partners for the workshop.
Interestingly enough, though, a closer look at the fine print reveals that while 68% of men ‘strongly agree’ that employers are unbiased, 67% of women ‘strongly disagree’. Further 23% of men and women feel organizations make assumptions about people’s capabilities based on gender, age, pregnancy and family commitments.
As far as flexibility of work is concerned 60% of women feel their commitment would be questioned if they opted for flexible work hours, while only 35% of men feel they can actively consider a flexible work option. 55% of people feel they have not been encouraged to apply for other positions in the organization.
“This stresses the fact that both men and women should benefit from greater flexibility in the work hours,” pointed out Lynn de Souza.
The most disturbing statistic that came out of this survey is, however, that only 50% of companies in the advertising and media world have a committee to address sexual harassment. Nine per cent of employees, both men and women, have faced inappropriate sexual contact at the workplace. Further still 17% of people have observed someone else in the organization being sexually harassed. Interestingly, men have responded that they are ‘uncertain’ about what construes as sexual harassment.
It can be concluded that while sexual harassment incidences are high, there is low reporting, and little or no knowledge on how to go about it.
Here are the survey results…
According to Nomura, if anti-incumbency proves to be a core theme in the 2014 general election, it will clearly be to Congress' disadvantage overall – although it does not follow, of course, that BJP would necessarily be the main beneficiary
The state assembly elections are viewed by many as a preview of the general elections, which are due by May 2014. The incumbent Congress has lost both Delhi and Rajasthan, while the Bharatiya Janata Party (BJP) has retained a majority despite being an incumbent government in Madhya Pradesh and Chhattisgarh. This indicates a rising wave in favour of the BJP as well as an anti-Congress vote in these states. However, according to Nomura, while BJP has clearly done very well in the 2013 state assembly elections, this may or may not have much of an implication on the general elections.
Sounding a cautious note that state election outcomes are not always a reliable indicator of general election prospects, Nomura said, during 1999 Congress performed exceedingly well in the state elections, but the BJP came to power at the centre a few months later. In 2003, the BJP had performed well in the state elections, but it lost the national elections held a few months later.
"This could be because voters differentiate between state and central elections and local factors play a more important role in the former. It is also important to note that the states of Madhya Pradesh, Chhattisgarh and Rajasthan have been traditional strong holds of the BJP, while it does not have much of a presence in the eastern and southern parts of the country," the report said.
It said it belive wins in Delhi and Rajasthan will be interpreted as a boost for BJP's prospects by financial markets and are likely to give the party additional momentum as general election campaigning starts to ramp up.
"We have previously noted that we consider Delhi, traditionally a Congress stronghold, the most important of the recent state elections in terms of possible indications for the general election. Therefore, BJP's victory there should not be dismissed, in our view, even though it, together with the solid showing of Aam Admi Party (AAP), can to an extent be attributed to the longstanding tendency of Indian voters to opt for anti-incumbency. If anti-incumbency proves to be a core theme in the 2014 general election, it will clearly be to Congress's disadvantage overall – although it does not follow, of course, that BJP would necessarily be the main beneficiary," Nomura said in a research note.
Nomura said, from an economic perspective, the state election results are likely to benefit market sentiment, but they do not have any immediate impact on the fundamental outlook.
India’s economic growth is bottoming out. GDP growth rose to 4.8% in Q3 2013 from 4.4% in Q2, led by better exports and good monsoons. However, domestic demand remains very weak. After a modest pickup in auto sales in October, ahead of the festival season, sales have again moderated in November with rising inventories indicating production cuts ahead. Weak demand and increased leverage on corporate balance sheets is likely to delay any meaningful increase in the capex cycle, which remains the key to a sustainable growth uptick. Furthermore, the government’s intent to meets its fiscal deficit target of 4.8% of GDP, with the fiscal deficit over the first seven months already at 84% of its full-year target, suggests large cutbacks in government expenditures in coming months which in turn will be a drag on growth.
"We believe that a stable government following the 2014 general elections could remove one key source of uncertainty and support a more sustainable growth uptick from Q3 2014 into 2015. Thus, we expect GDP growth to remain largely flat at 4.8% in 2014 (from 4.7% in 2013) before rising to 5.7% in 2015," Nomura said.
The Indian election results were consistent with the exit polls. In fact, the BJP's performance in two of the key states of Rajasthan and MP was better than expected.
Nomura said, "These results will be well-received by the market, in our view. The BJP is considered more right-of-center, pro-business and reform-oriented. The fact that runaway spending by the ruling party has not won any votes could be taken as a very positive signal by the markets in terms of voter preference for the kind of policy favoured by the electorate. A strong showing in these state elections by the party will induce the market to ascribe a higher probability of wins in the crucial central elections, which are scheduled to be held in May next year."
"We expect market gains to be led by high-beta domestic cyclicals (banks and industrials, mainly) and expect defensives (consumer, pharmaceuticals, telecom and IT services) to underperform. We maintain our end-March 2014 Sensex target of 22,000. Sector-wise, we remain positive on banks, IT services, pharmaceuticals, oil & gas and power utilities. We are cautious on autos, infrastructure & construction, capital goods, consumer, metals and telecom. We believe the banking sector will benefit most from the election," Nomura concluded.