Investors cash out Rs230 crore worth Gold ETFs in June

The prices of the yellow metal rose 34% in a year and the outflows in Gold ETF could be primarily due to profit booking

Mumbai: With gold prices soaring in June, investors preferred to make some money on their gold exchange traded funds (ETFs) with the category seeing a record outflow of Rs230 crore during the month, according to rating agency CRISIL.

"Gold ETFs witnessed monthly outflows of Rs230 crore in June, the highest in the category. According to the Association of Mutual Funds in India (AMFI), assets under gold ETFs fell by 2.2% over the month to Rs10,100 crore in June.

"The outflows from this category could be primarily due to profit booking after the price of the underlying metal rose sharply in the past one year due to global risk aversion and domestic buying," the ratings agency said in a report.

The prices of the yellow metal rose 34% in a year ended 29 June 2012, according CRISIL Gold Index.

The asset management industry saw a decline of 1.5% in assets in the month to Rs6.89 lakh crore.

"The MF industry's month-end assets under management fell by 1.5% (Rs10,500 crore to Rs6.89 lakh crore) in the reporting month, primarily due to outflows in money market funds, which witnessed cyclical quarter-end outflows due to withdrawals by corporates.

"Money market funds witnessed outflows of Rs25,100 crore primarily because corporates withdrew their short-term MF investments to meet advance tax requirements (Rs25,000-Rs30,000 crore)," the agency said.

Although the equity funds witnessed outflows during the month, its assets rose by 5.4% to Rs 1.8 trillion compared to a fall of 5.1% in May.

"The rise in month-end assets of equity funds was primarily due to mark-to-market gains from the underlying equity markets despite the category witnessing marginal outflows (Rs300 crore) in the month. The domestic equity market, rose by 7% in the month led by positive domestic and global cues," it noted.

With fund houses launching a slew of fixed maturity plans (FMPs), it wasn't surprising that the income funds saw inflows for the third consecutive month.

The category logged steady inflows of Rs1,570 crore in the month, compared with the same amount of inflows seen in May. The inflows were largely on account of FMP new fund offers, where investors are able to lock into higher yields.

"FMPs continued to garner the majority of new offers in June with as many as 55 out of the 61 new fund offers, were being FMPs, garnering Rs4,000 crore. The month-end assets of income funds rose by 1.06% to Rs3.17 lakh crore by June," it said.

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Competition Commission okays Axis AMC's 25% stake sale to Schroder

CCI pointed out that the market share of Axis Mutual Fund is insignificant along with the presence of various other players who have larger market shares in the Indian mutual funds market

New Delhi: The Competition Commission of India (CCI) has approved the acquisition of 25% stake in Axis Asset Management Company by Schroder Singapore Holding Pvt Ltd (SSHL), the asset management arm of UK-based Schroders Plc, reports PTI.

"Considering the facts on record and the details provided in the notice and the assessment of the proposed combination is not likely to have an appreciable adverse effect on competition in india and therefor the Commission hereby approves the proposed combination," the competition regulator said in its order.

CCI said that while SSHL, the investment vehicle created for the takeover of Axis AMC and Axis MF Trustee, has no presence in India, Schroder Investment Management (Singapore) Ltd (SIMSL) is present globally in the market for asset management services, portfolio management and related advisory services.

However, SIMSL has no presence in India in the asset management services and portfolio management services.

"There are more than 40 other AMCs and more than 200 portfolio managers registered in India with SEBI, implying significant competition prevailing in the market of mutual funds as well as portfolio management services. There is, therefore, ample choice available to the customers...," CCI said.

CCI pointed out that the market share of Axis Mutual Fund is insignificant along with the presence of various other players who have larger market shares in the Indian mutual funds market.

In April, Axis Bank's board has approved the 25% stake sale in its subsidiary Axis Asset Management Company to Schroder Singapore Holding Pvt Ltd. However, the financial details of the deal has not been disclosed.

The deal would provide Axis AMC access to Schroders' global distribution network as well as opportunity to advise overseas funds having investments in Indian securities.

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RBI eases norms for foreign banks to meet capital adequacy

The central bank advised to include some of the net overseas placements with head office or other overseas branches or other group entities to be calculated as Tier-I capital or equity capital

Mumbai: The Reserve Bank of India has eased norms for foreign banks to help them meet capital adequacy requirement as per the central bank norms, reports PTI.

"A few banks represented that debit balances in the head office account due to placements with the overseas branches may happen as a part of normal banking business and complete denial of such exposure may not be practical and consistent with the principle of non-disruptive regulation," RBI said in a notification.

Accordingly, it has been advised to include some of the net overseas placements with head office or other overseas branches or other group entities to be calculated as Tier-I capital or equity capital, the notification said.

If the above exceeds 10% of the bank's minimum capital adequacy ratio requirement, the amount in excess of this limit would be deducted from Tier I capital or equity capital, it said.

"For the purpose of the above prudential cap, the net overseas placement would be the higher of the overseas placements as on date and the average daily outstanding over year to date," it said.

The fresh guidelines will be effective from 30th September, it added.

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