Mutual Funds: India

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=2015: Equity MFs beat FIIs=
 
=2015: Equity MFs beat FIIs=
[[File: 2007-2015, investments in mutual funds, and investments by FIIs in equities.jpg|2007-2015, investments in mutual funds, and investments by FIIs in equities; Graphic courtesy: [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Sensex-cos-Q3-net-to-decline-2-09012015023033 ''The Times of India''], November 20, 2015|frame|500px]]  
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[[File: 2007-2015, investments in mutual funds, and investments by FIIs in equities.jpg|2007-2015, investments in mutual funds, and investments by FIIs in equities; Graphic courtesy: [http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Equity-MF-investors-beat-FIIs-in-15-20112015023019 ''The Times of India''], November 20, 2015|frame|500px]]  
  
[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Sensex-cos-Q3-net-to-decline-2-09012015023033 ''The Times of India''], November 20, 2015
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[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Equity-MF-investors-beat-FIIs-in-15-20112015023019 ''The Times of India''], November 20, 2015
  
 
Allirajan M
 
Allirajan M
  
''' Sensex cos' Q3 net to decline 2% '''  
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'''Equity MF investors beat FIIs in 2015'''
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For years, equity mutual funds (MFs) were the poor cousins of the stock markets as foreign institutional investors (FIIs) always poured more money into direct equities. But for the first time ever, equity MF investors are overshadowing their overseas peers, having pumped nearly three times more funds into equity schemes in the current year than FIIs.
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Equity MFs (including equity-linked savings schemes, or ELSS) have seen net inflows of Rs 80,580 crore, or about $12.5 billion, so far in 2015 (till October) -the highest on record. In contrast, FIIs have made net investments of Rs 27,699 crore, or around $4.25 billion, during the period.
  
India Inc is likely to see a further moderation in earnings momentum in the third quarter of 2014-15.
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In fact, net investments made by MF investors have al ready surpassed the highs hit in 2014. The surge in inflows into equity schemes has prompted fund houses to deploy money in shares in a big way .Equity MFs have deployed about $950 million per month on an average in 2015. Fund deployments peaked to an all-time monthly high in August af ter the stock markets plunged in the wake of the global turmoil in equity markets amid a sharp selloff in China.
  
The growth in earnings for sensex companies would fall to the lowest level since the quarter ending June 2013, estimates showed. The profit margins of the sensex companies are expected to decline on both year-on-year (y-o-y) as well as quarter-on-quarter basis.
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“Investors are gradually realizing that equities are the best option on a tax-adjusted basis over the long term. So they are putting a bigger portion of their savings in equiti es,“ says Sunil Singhania, head (equities), Reliance Capital Asset Management.
  
The moderation in earnings would be predominantly concentrated in oil & gas and metals companies due to the sharp correction in commodity prices, estimates made by leading brokerages showed.
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Gopal Agrawal, CIO, Mirae Asset Global Investments India, says, “Interest (in equities) has been quite consistent among investors. Other asset classes such as gold and real estate have not done well and this has also helped. There is a clear shift in investment patterns. Investors have become a lot more mature. The attractiveness of other asset classes has diminished to a large extent. But the long-term outlook is quite positive for equities.
 
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Export-oriented sectors such as IT (information technology) and pharmaceuticals would also be affected due to the cross-currency impact of 200-220bps (100 bps = 1 percentage point) on revenues since the dollar had appreciated 5.2% and 5.8% against the pound and the euro.
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Though the lower commodity prices are a tailwind for India Inc, inventory losses and lacklustre domestic demand have played spoilsport, analysts said. “Given the weak demand, domestic consumption as well as investment-oriented sectors are expected to report subdued earnings growth,” experts said.
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While the moderation in commodity prices is expect ed to boost ebitda (earnings before interest, taxes, depreciation and amortization) margins, it is unlikely to compensate for the subdued domestic demand, observers said. Ebitda margins, which have been improving over the past couple of quarters, are expected to increase on a qo-q basis on the back of the sharp correction in commodity prices. But companies would not be in a position to take full advantage of the cor rection due to inventory losses, analysts said.
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“The benefits (of fall in input costs) would come with a lag of two-three months,” said GChokkalingam, founder and MD, Equinomics Research and Advisory.Alex Mathews, head (research), Geojit BNP Paribas Securities, said, “The next quarter would be much better due to the fall in commodity prices and the likely softening of interest rates.The earnings of sensex companies are expected to either remain flat or decline around 2% to about Rs 58,50060,770 crore, estimates showed. “Domestic-oriented sectors are expected to post stable, but subdued earnings growth,” analysts at Edelweiss Securities said. The top line of sensex companies are also expected to remain flat. Net sales made by sensex companies would be around Rs 4.9 lakh crore during the quarter, estimates showed.
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''' Re regains 63 level on rally in stocks '''
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In a pull-back rally, the sensex closed 366 points higher at 27,275 and reversed a three-session losing streak on the back of strong buying in stocks like ITC, ICICI Bank, HDFC and HDFC Bank. The sensex's gains were also helped by short-covering by speculators in the closing hours as they rushed to buy at higher levels and cut their losses. The strong gains in the stock market helped the rupee strengthen against the dollar by 51 paise to above the 63-per-dollar mark for the first time in over three weeks, as it closed at 62.67. The strength of the rupee came on expectations that a strong stock market will attract foreign funds to invest in Indian stocks.
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Barring odd instances such as the market meltdown in 2008 when the rout that followed the global financial crisis triggered a massive pullout by FIIs, overseas investors have stood head and shoulders above their domestic peers in investments into Indian stocks.
  
 
=See also=
 
=See also=
 
[[Sensex ]] <> [[The stock market: India]] <> [[Mutual Funds: India ]] <> [[Rupee: India ]]
 
[[Sensex ]] <> [[The stock market: India]] <> [[Mutual Funds: India ]] <> [[Rupee: India ]]

Revision as of 15:44, 4 December 2015

This is a collection of articles archived for the excellence of their content.

2015: Equity MFs beat FIIs

2007-2015, investments in mutual funds, and investments by FIIs in equities; Graphic courtesy: The Times of India, November 20, 2015

The Times of India, November 20, 2015

Allirajan M

Equity MF investors beat FIIs in 2015  For years, equity mutual funds (MFs) were the poor cousins of the stock markets as foreign institutional investors (FIIs) always poured more money into direct equities. But for the first time ever, equity MF investors are overshadowing their overseas peers, having pumped nearly three times more funds into equity schemes in the current year than FIIs. Equity MFs (including equity-linked savings schemes, or ELSS) have seen net inflows of Rs 80,580 crore, or about $12.5 billion, so far in 2015 (till October) -the highest on record. In contrast, FIIs have made net investments of Rs 27,699 crore, or around $4.25 billion, during the period.

In fact, net investments made by MF investors have al ready surpassed the highs hit in 2014. The surge in inflows into equity schemes has prompted fund houses to deploy money in shares in a big way .Equity MFs have deployed about $950 million per month on an average in 2015. Fund deployments peaked to an all-time monthly high in August af ter the stock markets plunged in the wake of the global turmoil in equity markets amid a sharp selloff in China.

“Investors are gradually realizing that equities are the best option on a tax-adjusted basis over the long term. So they are putting a bigger portion of their savings in equiti es,“ says Sunil Singhania, head (equities), Reliance Capital Asset Management.

Gopal Agrawal, CIO, Mirae Asset Global Investments India, says, “Interest (in equities) has been quite consistent among investors. Other asset classes such as gold and real estate have not done well and this has also helped. There is a clear shift in investment patterns. Investors have become a lot more mature. The attractiveness of other asset classes has diminished to a large extent. But the long-term outlook is quite positive for equities.“

Barring odd instances such as the market meltdown in 2008 when the rout that followed the global financial crisis triggered a massive pullout by FIIs, overseas investors have stood head and shoulders above their domestic peers in investments into Indian stocks.

See also

Sensex <> The stock market: India <> Mutual Funds: India <> Rupee: India

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