Schroder Singapore acquires 25 per cent stake in Axis AMC

Private sector Axis Bank today said Schroder Singapore Holding has acquired 25 per cent stake in its subsidiary, Axis Asset Management Company.

The transaction provides Axis AMC access to Schroders' global distribution network and to advise overseas funds invested in Indian securities, Axis Bank said in a statement.

Private sector Axis Bank today said Schroder Singapore Holding has acquired 25 per cent stake in its subsidiary, Axis Asset Management Company.

The transaction provides Axis AMC access to Schroders' global distribution network and to advise overseas funds invested in Indian securities, Axis Bank said in a statement.

Source: http://articles.economictimes.indiatimes.com/2012-09-18/news/33926311_1_axis-amc-schroders-overseas-funds

FII inflows strong, DIIs continue to sell

Experts expect domestic flows after market touches new high

Even as foreign investors have stepped up buying, owing to the announcement of bold reforms in the last few trading sessions, domestic institutional investors (DIIs) continue to sell.

Market experts believe portfolio flows from foreign investors would remain strong due to reforms and stimulus programmes announced by the US Federal Reserve and the European Central Bank (ECB). However, DII flows could continue to languish due to redemption pressure on mutual funds and lack of retail participation in the market.

In the last three trading sessions, foreign institutional investors (FIIs) bought net shares worth Rs 6,135 crore after the government increased diesel prices and opened up the retail and aviation sectors to foreign direct investment (FDI). In contrast, DIIs, which include entities like mutual funds and insurance companies, sold net shares worth nearly Rs 2,200 crore during these three sessions.

Strategists at several foreign brokerages like Morgan Stanley, Citigroup and Deutsche Bank have increased their Sensex targets due to the improved domestic sentiment and the global liquidity scenario. Some brokerages expect a rise of about 10 per cent from the current levels, with the Sensex surpassing 20,000.

According to Securities and Exchange Board of India data, so far this year, FIIs have invested about Rs 61,000 crore ($13.7 billion) in Indian equities. However, DIIs sold shares worth about Rs 32,000 crore during the same period — the highest since 2005.

In a report, Aditya Narain, head of India research, Citigroup, stated the market would continue to rise, primarily due to foreign flows. He added domestic flows would only start coming in after the market rose another 10 per cent from its current levels.

Experts say flows from retail investors and DIIs would improve once the market stabilises or crosses the previous all-time high. “When the 2003 rally began, domestic investors started coming into the market only when the market crossed its then all-time high in 2004. This time, too, domestic investors would start investing only after the market crosses its all-time high. I expect this to happen in the January-March period next year,” said Sandip Sabharwal, chief executive (portfolio management services), Prabhudas Lilladher.

“The way the market has moved up, it has not given anybody a chance to enter. Domestic participation would only be seen if the market stabilises at current levels,” said Prashanth Prabhakaran, president (retail broking), India Infoline. “Equity mutual funds are facing huge redemption, signalling fear is still there,” he added.

Heavy redemption pressure on equity mutual funds this year also led to heavy selling by domestic institutions, especially mutual funds. In August, equity mutual funds recorded their second-highest outflow — about Rs 2,300 crore. So far this year, net outflow from equity funds stands at about Rs 7,800 crore.

“The right time to invest was in December 2011, when there was gloom and doom. Since then, the market has given returns of about 20 per cent. Unfortunately, the money comes only after the market moves up,” said Anand Shah, chief investment officer, BNP Paribas Asset Management India.

Source: http://www.business-standard.com/india/news/fii-inflows-strong-domestic-institutions-continue-to-sell/486867/

IT, pharma mutual funds shine in August

Volatile mkt conditions also prompted investors to flock to pharma and FMCG sector shares

IT sector funds were the top performers in August among Indian mutual funds that focus on domestic stocks as lower valuations of the sector's shares after their sharp declines in July revived investor interest.

The BSE Sensex gained 1.1 percent in August, but IT stocks outperformed as the BSE IT index surged 8.3 percent after falling 7.3 percent in July, with shares in India's top software services firm TCS rising 8 percent, and rival Infosys gaining 6 percent.

"IT is now fast becoming a stock-specific scenario," said Waqar Naqvi, chief executive of Taurus Mutual Fund, adding that the outlook for the sector will be "neutral" in the coming months.

In August, IT funds gained almost 6 percent on average, with Franklin Infotech Fund registering a rise 7.5 percent to top the category, data from fund tracker Lipper, a Thomson Reuters company, showed.

Volatile market conditions also prompted investors to flock to defensive sectors, helping the pharma and the FMCG (fast-moving consumer goods) category of funds to appear among the top gainers for the month.

Gains of 4.6 percent in the BSE healthcare index helped pharma funds clock an average rise of 5.1 pct, while FMCG funds gained 4.8 percent in August, on the back of a 6.9 percent rise in the BSE FMCG index.

Among other schemes, international companies-focused AIG World Gold Fund gained more than 10 percent to end as the month's best performer, on the back of rising yellow metal prices in August.

Banking funds were the worst hit during the month, ending with average losses of 4.5 percent. Five of the six top India fund losers were banking funds, Lipper data showed.

DIVERSIFIED EQUITY FUNDS

India's quarterly GDP grew at a slightly better-than-expected 5.5 percent in the June quarter, dashing investor hopes of an early rate cut by the RBI, as inflation continues to remain at stubbornly high levels.

Slowing growth in Asia's third-largest economy and uncertainty about passage of reforms after a parliament deadlock over the CAG's report on misallocation of coal blocks kept investors on the edge in August.

Diversified stock funds, which represent the biggest category of stock funds in India by number and assets, ended with small gains of 0.4 percent in August.

While the main index managed to eke out gains, the BSE mid-cap index ended marginally in the red while the small-cap index lost almost 1 percent.

These losses also weighed on such funds' unit values as mid- and small-cap stocks accounted for more than a third of their assets as of end-July, data from Morningstar India showed.

Some analysts said Indian markets will continue to be range-bound going ahead, and the political deadlock is likely to hurt sentiment.

"Politics as of now is a more important reason rather than economics as far as the markets are concerned," Naqvi of Taurus Mutual Fund said.

Source: http://www.business-standard.com/india/news/it-pharma-mutual-funds-shine-in-august/185285/on