Why global investors now want to be in Mumbai rather than London

It is possible that you fretted all through May and June as the domestic stock market gyrated between gains and losses in response to various global cues. But at the end of the day, Dalal Street ended the June quarter as Asia's best performer. 

That, despite the Brexit vote almost bringing Dalal Street down on its knees and when concerns over a possible rate hike by the US Fed haunted stock markets globally all through the quarter. 

What seems to have helped the domestic market were improving macros, supportive monsoon forecast and a slew of reforms, including the GST, which helped calm investor nerves on Dalal Street. 

The BSE Sensex ended the quarter with a 6.54 per cent gain, the biggest for the 30-pack index since its 14 per cent rally in the June quarter of calendar 2014. 

This compares with a 7.05 per cent slump in the Japanese Nikkei, which reeled amid concerns over slowing of exports and a rise in the yen against the US dollar. European indices such as Italy's IBEX 35, France's CAC40 and Germany's DAX dipped 6.4 per cent, 3.36 per cent and 2.86 per cent, respectively, during this period, thanks to tepid growth and absence of any stimulus from the European Central Bank (ECB). 

Sensex's Asian peer Shanghai Composite declined 2.47 per cent during the quarter, while Korea's Kospi and Taiwan's TWSE index fell 1.27 per cent and 0.90 per cent, respectively. Markets bled amid concerns that political risks globally may trigger risk-off trade, leading to a selloff by emerging market funds. 

But despite last week's steep fall, the UK's FTSE100 surged 5.33 per cent during the June quarter, while Brazil's Bovespa rose 2.94 per cent and US' Dow Jones 2.94 per cent. 

Market watchers said inflow from institutional investors remained strong during the quarter owing to an improved macro-economic outlook. They were quick to note that the domestic market showed immense 'maturity' in dealing with the external headwinds. 

"Over the next 6 to 12 months, India is going to be a better place relatively as growth is going to be scarce everywhere else. The world has been struggling to grow and that is why India will stand out. The growth momentum is picking up in India, and as we move into the end of the calendar, then into the next year, we will see more visible signs that growth is coming back," said Jyotivardhan Jaipuria, Veda Investment Managers. 

Frankly, I would love to be in India today, rather than in London. I think the stock market is looking extremely interesting. It is never the cheapest market in the emerging markets, but if you separate the fact that Brexit could easily lead to a global recession, it will not be great for commodity producers, but for countries like India." 

The June quarter saw DIIs buying Rs 3,712 crore worth of stocks. This was against a Rs 21,143 crore share purchase they did in the March quarter and an outflow of Rs 3,344 crore that they witnessed in the year-ago quarter. FPI flows, on the other hand, improved for the fourth consecutive quarter. The flows stood at Rs 14,671 crore, which were higher than Rs 4,495 crore inflow recorded in the March quarter and Rs 2,608 crore reported for the year-ago quarter 

"I would be surprised if we do not get a better share of FII flows in the Indian equity market. India will keep attracting perhaps an inordinate amount of FII flows," 

SOURCE(ET MARKET)

MFs plan to offer SIP variants to attract more investors

Mutual fund (MF) houses are mulling to launch more variants of systemic investment plans (SIPs) to attract investors as growth in the sector picks up. 

The variants include SIP top-ups and Smart SIPs. 

SIP top-up will be available in two forms -- variable and fixed. Variable SIP top-ups allow investors to increase their monthly instalments by certain percentage points on a monthly basis. In Smart SIPs, investors are free to increase their monthly instalments in multiples of Rs 500 or so. 

Enthused by the 100 per cent growth in its SIPs in the year gone-by, Kotak Asset Management Company is now looking at launching different variants of the plans. With an AUM of Rs 63,000 crore, Kotak AMC is ranked among the top 10 fund houses in the country. 

"Our SIPs have grown by 100 per cent in the last fiscal year, driven by better fund performance and the efforts made by the company," Kotak AMC Managing Director and Chief Executive Nilesh Shah told PTI on the sidelines of an industry event here today. 

"Now we are planning to come up with different variants of SIPs in the later part of the year, which include Smart SIPs and SIP Top-ups,"

ICICI Prudential Asset Management Company, which is likely to come up with its new SIP top-up offerings shortly, has made changes in the scheme information document and the key information memorandum of all the schemes to allow top-up facility. 

Last week, Mirae Asset Management launched a SIP top-up scheme. Mirae Asset Chief Investment Officer Gopal Agrawal said, "We launched SIP top-up last week in which we are advising our investors to increase their SIP amount every year in multiple of Re 1." 

According to an industry estimate, SIP folios in the MF industry increased by 30 per cent in March to 93.44 lakh from 71.70 lakh a year ago, while the inflows jumped 39 per cent during the same period to Rs 2,747 crore from Rs 1,971 crore a year ago. 

 SOURCE(ET)

Brexit, and that huge investment fund you’ve never heard of

It is an open secret among British venture capitalists that many of their funds would have never gotten off the ground without a hefty check from the European Investment Fund -- the EU institution that pools billions in financing from European governments, the EU itself and a number of private banks, to fund investments. 

After the U.K.'s vote to leave the European Union, the community faces concern that this important source of funding could be in jeopardy. 

Between 2011 and 2015, the EIF committed 2.3 billion euros ($2.5 billion) to some 144 U.K.-based venture firms. That amounts to about 37 percent of all venture funding raised in the U.K. during those years, according to data from Invest Europe, the trade association for European VC firms. 

By the end of 2015, the EIF had 9.9 billion euros committed to venture capital and private equity in Europe. As of the end of 2014, the fund directly contributed about 12 percent of all venture money raised in Europe and funds that had the EIF as a key limited partner were responsible for about 45 percent of all European venture money raised, according to a report the fund published in June. 

Joe Steer, research director of the British Venture Capital Association, said in a guide to Brexit published this week that, "any loss of this funding could prove damaging to the industry." 

The EIF issued a statement the day after the referendum noting the result "with regret". It said the fund's future activity in the U.K. would be decided as "part of the broader discussions to determine the future relationship of the U.K. with Europe and European bodies." 

Source(ET)