Today’s Headlines – 27th April 2016
Market and Economy
· Mutual fund folios see a record 14% increase in fiscal 2016
· Equity Funds Continue To Draw Retail Investors: CRISIL
· Don’t expect next Fed rate hike until 2018: Michael Sneyd, BNP Paribas
· FSSAI expansion plans shelved by government
· Markets nearly erase 2016 losses to end at a four-month high
· BSE launches gold hedge indices to protect equity investors
· Centre to divest 11.36% stake in NHPC
· Forest clearances for only 6% of road projects since Jan 2015
· DBS Bank offers 7% interest rate
· Either ways, India to benefit from global central
Mutual fund folios see a record 14% increase in fiscal 2016
Mutual funds folios in India rose by a record 14% in the year ended 31 March, indicating growing interest of retail investors in equity-oriented funds.
Mutual funds in India added more than 5.9 million folios to reach a total of 47.7 million in FY16, Crisil Research said on Tuesday, citing data disclosed by the Association of Mutual Funds in India (Amfi). A folio is a unique number given to an investor by an asset management company for investing in a particular fund.
The industry added 1.81 million folios in the March quarter, an increase of 3.95% from the preceding December quarter.
Read more at:
http://www.livemint.com/Money/VBRowqYA6XWPQo55asrVDJ/Mutual-fund-folios-rise-a-record-14-in-fiscal-year-201516.html
Equity Funds Continue To Draw Retail Investors: CRISIL
Volatility in the Indian stock markets has not deterred retail investors from pouring money in equity-oriented funds, CRISILBSE 0.37 % research said in a report. Retail folios in equity schemes rose 13.1% to 3.49 crore in FY16 and contributed 77% of the total retail folios, despite the market as represented by Nifty 50, closing the fiscal year down nearly 9%.
"The latest quarter saw addition of 12.57 lakh accounts - the highest since December 2014," the report stated. "Retail folios in the segment marked the sixth consecutive quarter of gains."
Among other categories, balanced funds, with higher orientation towards equity, too continued to benefit from the penchant for equity investments. The category added 4.33 lakh folios in FY16 to push the total count to 23.38 lakh.
Read more at:
http://economictimes.indiatimes.com/articleshow/51992027.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Don’t expect next Fed rate hike until 2018: Michael Sneyd, BNP Paribas
The US Federal Reserve is unlikely to raise interest rates until 2018, said Michael Sneyd, forex strategist at BNP Paribas. He said the Fed may consider a rate hike only if the US economy does exceptionally well, but such a move could upset equations, choking fund flows. Sneyd spoke to Saikat Das and Pratik Bhakta during his recent India visit. Edited excerpts:
What worries the world markets? The biggest focus over the last few weeks has been the Fed and its move to be more dovish.
What signals are you getting from the Federal Reserve? A few weeks ago, Fed chief Janet Yellen said the way the Fed views the world has been unchanged. But the downside risks to the US economy have increased. Most of the downside risks stem from what is happening in foreign economies. It also extends from what is happening in global markets.
Read more at:
http://economictimes.indiatimes.com/articleshow/52002229.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
FSSAI expansion plans shelved by government
The plan to expand the Food Safety and Standards Authority of India (FSSAI) is proposed to be shelved by the government. In 2014, the government had mooted a draft cabinet note for a Rs 1,750 crore-central scheme for strengthening of FSSAI, e-governance, food safety surveillance and expansion of states’ capacity.
In contrast, a note written by the chairperson of FSSAI,Ashish Bahuguna on January 6, this year to his staff has suggested that the FSSAI would wind up its regional offices and leave enforcement of safety laws to state governments. With the Rs 800 crore support to states under the central scheme being shelved, Bahuguna has also recommended that regulations be amended, allowing state officials to monitor food safety as an additional duty and not necessarily on a full-time basis. He has also recommended that instead of setting up government labs to test food samples, as was previously planned, FSSAI should depend on private labs.
Read more at:
http://www.business-standard.com/article/economy-policy/fssai-expansion-plans-shelved-by-government-116042601273_1.html
Markets nearly erase 2016 losses to end at a four-month high
Indian indices on Tuesday posted their biggest single-day advance in two weeks, boosted by earnings of Maruti Suzuki. Gains in the European market and recovery in global crude oil prices also helped investor sentiment.
The Sensex added 328 points, or 1.3 per cent, to end at 26,007, the highest close since January 1. The Nifty 50 index rallied 107.6 points, or 1.4 per cent, to 7,962.6, only one point shy of a new 2016 high.
Both indices have rallied 13 per cent each since March 1, helped by recovery in global markets. The indices had plunged over 12 per cent in the first two months of the year, on fears of a China-led global slowdown.
Foreign investors on Tuesday bought shares worth over Rs 500 crore, provisional data showed.
Read more at:
http://www.business-standard.com/article/markets/markets-nearly-erase-2016-losses-to-end-at-a-four-month-high-116042600877_1.html
BSE launches gold hedge indices to protect equity investors
Asia Index Pvt Ltd, a joint venture between the S&P Dow Jones Indices and the BSE, has launched a new Gold Hedged Index and Dynamic Gold Hedged Index, the first such indices in India. These indices “can serve as the basis of investment products such as ETFs that allow investors to benefit from the returns of the Indian equity market while hedging against a decline in the value of the Indian rupee versus gold,” a press release from the company said.
The two indices are designed to simulate the total returns of the benchmark Sensex with a hedge against the fluctuations of the rupee against gold. The risks involved in investing in equity continue, however.
The Gold Hedge is calculated as a combination of a long Sensex total return position and Gold Mini futures contracts on the Multi Commodity Exchange of India (MCX).
Read more at:
http://www.thehindubusinessline.com/todays-paper/tp-markets/bse-launches-gold-hedge-indices-to-protect-equity-investors/article8525195.ece
Centre to divest 11.36% stake in NHPC
Putting its disinvestment programme for the 2016-17 fiscal on the fast track, the government announced on Tuesday that it will sell 11.36 per cent stake in NHPC to raise close to ₹ 2,800 crore.
The stake sale will be through the offer for sale mechanism and non-retail investors will be eligible to place bids on April 27 while retail investors will be eligible to bid on April 28.
The floor price for the offer for sale has been set at 21.75 per share and on offer will be 125.76 crore shares. On Tuesday, public sector hydro power producer NHPC’s shares closed 1.32 per cent higher on the BSE at 23.05.
The government currently holds 85.96 per cent stake in NHPC.
By conducting the offer for sale in April, the government will commence the disinvestment programme for the 2016-17 fiscal in the first month of the fiscal itself. For the full fiscal, the government aims to raise 35,000 crore from the minority stake sales in public sector units.
Read more at:
http://www.thehindubusinessline.com/markets/centre-to-divest-1136-stake-in-nhpc/article8524288.ece?homepage=true
Forest clearances for only 6% of road projects since Jan 2015
The Union environment ministry has given final forest clearance to only 6% of the 598 proposals it received for road and highways projects across India in the 16 months starting January 2015.
Environment minister Prakash Javadekar, however, attributed the delay to state governments who don’t send the required documents. According to environment ministry data, the centre received 598 proposals to build roads and highways from 1st January 2015 to 21 April 2016 from various states for forest clearance.
Of the total 598 proposals, only 37 (6%) got final forest clearance while 164 got in-principle approval. “Decision on 364 (60%) proposals is pending due to non-receipt of essential documents/information sought from the concerned states/Union Territories,” Javadekar told the Lok Sabha on Tuesday.
Read more at:
http://www.livemint.com/Politics/xznuWSDzz1snTEYCMPFdgO/Forest-clearances-for-only-6-of-road-projects-since-Jan-20.html
DBS Bank offers 7% interest rate
The rate is for accounts opened via 'digibank'
Singapore’s largest lender DBS Bank on Tuesday launched ‘digibank’, a mobile only bank, offering 7 per cent interest for accounts opened through it.
The bank is targeting five million savings account customers through this platform in the next few years and help increasing its liability book to Rs 50,000 crore and asset book to Rs 10,000 crore.
Piyush Gupta, chief executive officer, DBS Bank said, “Our goal is to get five million customers through the Digibank in the next 4-5 years. We will offer account-holders 7 per cent interest, one of the highest interest rate in the market on every rupee, allow unlimited free cash withdrawals at over 200,000 ATMs nationwide, there is no minimum balance requirements.”
Unlike other private sector lenders such as Kotak Bank, Yes Bank that offer six per cent on deposits above Rs 1 lakh, DBS would be offering 7 per cent irrespective of the amount in the saving account.
Read more at:
http://www.mydigitalfc.com/banking/dbs-bank-offers-7-interest-rate-055
Either ways, India to benefit from global central banks' moves
Central bank actions and statements are again at centrestage and likely to shape the narrative and the trading trends across the world this week. The US Federal Reserve is unlikely to do anything substantial but Chariperson Yellen's statement will be parsed, with great care for nuances. The optimists believe that the statement will be generally upbeat. The pessimists believe the statement will be downbeat.
There are differences of opinion as to what would be upbeat or downbeat. The primary consideration for most traders is liquidity. The biggest fear for most traders is that the Fed will hike interest rates soon and that will reduce the cash available for speculation.
Nobody expects the Fed to hike immediately but it's possible that the Fed might hike in June and almost certain that it will hike inside calendar 2016. The Fed would only hike in a hurry if it saw strong the gross domestic product (GDP) growth in the US and a tightening labour market, which could create the preconditions for inflation.
Read more at:
http://www.business-standard.com/article/markets/either-ways-india-to-benefit-from-global-central-banks-moves-116042601173_1.html
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