Mutual Fund Snapshot – September 2020

 

·        The mutual fund industry witnessed net outflows of ~INR 14,553 crore in August 2020 as against net inflows of ~ INR 89,812 crore in July 2020.

·        In August 2020, net outflows of ~ INR 4028 crore compared to net outflows of ~ INR 3845 crore in the previous month were seen in the equity category.

·        In August 2020, AUMs of debt, equity and hybrid category accounted for 50.5 percent, 29.0 percent and 11.0 percent of the total AUMs, respectively, and 9.5 percent of the balance was contributed by solution-oriented and other schemes.

·        The AUM of the MF industry increased by 1.4 percent on a MoM basis, and was reported at INR 27.49 Lakh Crore for August 2020 as compared to INR 27.11 lakh Crore in July 2020.

·        Total AUM in Equity category witnessed a rise of 4.3 percent on a MoMv basis, grew to INR 7.98 lakh crore in August, compared to INR 7.65 lakh crore in the previous month on the back of stellar stock market returns.  

·        Within equities, inflows were recorded in categories viz. ELSS, Focusedv Funds & Thematic Funds, of ~INR 29 crore, ~INR 5 crore and ~INR 370 crore, rest all equity categories witnessed net outflows where large cap funds were the worst hit by net outflow of ~INR 1553 crore.  

·        Net outflows of INR 8,943 crore were witnessed in Income/Debtv Oriented Schemes for the month of August, relative to net inflows of INR 86,635 crore in the previous month.  

·        Liquid funds saw outflows of INR 15, 814 crore as compared to inflows ofv INR 14,055 crore in the previous month, may be owing to withdrawal by investors with low-risk appetite.  

·        Corporate bond Funds saw inflows of INR 1,955 crore in August 2020 asv the traction of investors increase towards quality debt funds with AAA rated portfolios, which is however much lower than inflows of ~INR 11,910 crore in Corporate Bond Funds in the previous month.  

·        SIP inflows in August stood at INR 7,792 crore as against INR 7,831 crorev recorded in July 2020.

 

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Disclaimer

 The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. Karvy Private Wealth is only a distributor of securities and financial market products.

 

 

The World This Week – 21st Aug 2020 to 28th Aug 2020

 Indian Equity Summary

·        The BFSI sector staged a sharp recovery last week; the BSE Bankex was up ~10% on wow basis which lent support to the benchmark indicesØ Sensex /Nifty to close in green for 2nd consecutive week by ~2.5%. The market sentiment remained positive on the back of US Fed Chairman speech that lower interest rate trajectory may continue for longer time, thus a higher probability of inflows in the emerging markets, coupled with RBI Governors statement the central bank has not exhausted its ammunition to deal with the pandemic-induced stress.  

·        Going forward, global factors like development on the US -China relationship front , IndiaØ & China border issues and domestic factors like the monsoon trajectory and remaining earnings season ; will continue to dictate the trend of the domestic equity market. We expect the trading range for Nifty between 10900-11,400 in the near term.

Indian Debt Market

·        Government bond prices moved northward as the yield on the 10-year benchmark 5.79% 2030 paper settled at 6.10% on August 28 comparedØ with 6.14% on August 21.  

·        The Reserve Bank of India on last week announced that it will conduct open market operations or OMO of government t securities worth ₹20,000Ø crore in two tranches.

·        India's GDP contracts 23.9% in Q1FY21 as lockdowns, restrictions bludgeon economy. From manufacturing to real estate, from hospitality toØ mining, all segments except agriculture in deep red as economy records sharpest drop in 41 years.  

·        We expect the 10 year benchmark yield to trade between 5.90-6.25% in near term.Ø

Domestic News

·        Moody’s retained its earlier India growth forecast at -3.1% for current fiscal and 6.9% for next fiscal .Ø  The RBI’s balance sheet expanded by 30.02% to Rs 533.47 lakh crore in fiscal 2020, thanks to the growth in foreign exchange reservesØ  

·        The gross domestic product (GDP) growth for the April-June quarter contracted 23.9 percent against a growth of 5.2 percent in the same periodØ last fiscal.  

·        In its annual report, the Reserve Bank Of India (RBI) stated that India’s growth for the year 2020-21 is projected at minus (-) 4.5 percent.Ø

 

International News

·        Eurozone money supply and private sector credit growth accelerated in July. The monetary aggregate M3 expanded 10.2 percent on yearØ versus a 9.2 percent rise in June.The rate was expected to remain unchanged at 9.2 percent.

·        US real gross domestic product plummeted by 31.7 percent in the second quarter compared to the previously reported 32.9 percent nosedive. Economists had expected the plunge in GDP to be revised to 32.5 percent.  

·        China’s Industrial profits advanced 19.6 percent on a yearly basis in July, following a 11.5 percent rise in June. During January to July, industrialØ profits fell 8.1 percent from the same period last year.

 

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Disclaimer

The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. Karvy Private Wealth is only a distributor of securities and financial market products

 

The World This Week – 14th August 2020 to 21st August 2020

 Indian Equity Summary -  

·        The domestic equities outperformed global peers, as the broader (small cap) markets outperformed the benchmark indices for the secondØ week in a row. The Sensex / Nifty benchmark index grew by ~1.5 percent/1.7 percent(wow) whereas the BSE small grew by ~5.5(wow) percent in green on the back of broad based buying, though volatility continued to decrease. Positive global signals in the form of stimulus measures announced by China's central bank and excitement about the GOIs additional spending plans boosted sentiment among investors. A rally in power, realty, metal and consumer durables counters buoyed the market.  

·        Going forward, global factors like development on the US -China relationship front , and domestic factors like the monsoon trajectory andØ remaining earnings season ; will continue to dictate the trend of the domestic equity market. We expect the trading range for Nifty between 10900-11,400 in the near term

Indian Debt Market -  

·        Government bond prices fell sharply as the yield of the 10-year benchmark 5.79% 2030 paper settled at 6.14% on August 21 compared withØ 5.97% on August 14.  

·        The yield of the new 10-year 5.77% 2030 paper settled at 6.09% on August 21 compared with 5.95% on August 14Ø  

·        Expectations of interest rate cuts from the RBI in the near future faded , as the MPC's minutes revealed concerns about retail inflation, which inØ recent months remained persistently high.

·        We expect the 10 year benchmark yield to trade between 5.90-6.20% in near term.Ø

 

Domestic News -

·        The World Bank said it is likely to project a steeper contraction of India's economy than its previous forecast of 3.2% for the current financial yearØ due to the increasing number of Covid-19 cases and the resultant regional lockdowns .  

·        India’s trade deficit stood at $4.83 billion in July, compared with $0.8 billion surplus in June and a shortfall of $13.43 billion in July 2019. In July,Ø exports stood at $23.64 billion, while imports reached $28.47 billion.  

·        Prime Minister (PM) Narendra Modi said that Rs 100 lakh crore will be spent on the National Infrastructure Pipeline project and also launchedØ the National Digital Health Mission, under which every Indian will get a health ID

International News -

·        US initial jobless claims climbed to 1.106 million, an increase of 135,000 from the previous week's revised level of 971,000Ø  

·        The euro area private sector composite output index fell unexpectedly to 51.6 in August, while the score was expected to remainØ unchanged at 54.9  UK retail sales rose more-than-expected in July driven by non-food store turnover.

·        Retail sales grew 3.6 percent month-on-month inØ July, but slower than the sharp 13.9 percent rise in June and 12.2 percent increase in May. Economists had forecast sales to rise 2 percent.

 

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Disclaimer –

The information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock Broking Limited) or other Karvy Group companies. The information contained herein is based upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. Karvy Private Wealth is only a distributor of securities and financial market products.