Page 16 - Banking Finance December 2017

MUTUAL FUND

MUTUAL FUND

NEWS
NEWS
NEWS
NEWS
NEWS

Moody's rating upgrade MF managers pump money into a spate of public of-

unlikely to have a major ferings
impact, say mutual fund As per data from Morningstar, mutual fund cash holding at 5.5% in October is
the lowest since 5.2% in June. At Rs 38,597
managers crores, this was the second-highest

International rating agency Moody's monthly cash holding.
Investors Service has upgraded India's "There have a been a couple of large issu-
local and foreign currency issuer rat- ances in the initial public offering (IPO)
ings to Baa2 from Baa3. "The mar- market, and those seem to have absorbed
ket was extremely bearish the last additional flows better,' said Navneet
couple of days which caused the Munot, chief investment officer, SBI Funds
benchmark 10-year to cross 7 per Management Pvt. Ltd.
cent. But as we speak the yields are
down 10 basis points. This is good In October, GIC Re raised Rs11, 372 crores, in the second-largest IPO ever to hit
news for long-term bond funds," says the Indian capital market. Also, Reliance Nippon Life Asset Management Ltd
Dhawal Dalal, CIO- Fixed Income , raised Rs1, 542 crores through an IPO.
Edelweiss Mutual Fund. "There are rotational trades in the market. There are intra-sector rotations,'
"The rating upgrade by Moody's said Gopal Agrawal, chief investment officer (equities) at Tata Asset Manage-
brings a positive sentiment to the ment Ltd.
market. The equity markets are re- "Certain sectors are turning attractive, and people are deploying more cash
acting to the sentiment. We are there. For example, the IT and telecom sector has attracted investor interest in
hopeful of a change in interest rates recent times," added Agrawal.
in the debt markets," says Rajat Jain,
CIO, Principal Mutual Fund. BSE telecom index was the best performing sectoral index in October, gaining
19.54%, while BSE IT index gained 4.18% during the month, significantly con-
The fund managers believe that the
tributing to its total 2017 gains of 6.94%.
report will help India reinforce its
stance as a pro-business nation and BSE healthcare index, which is the only index to dip so far this year, added 5.89%
will increase international investment in October. "Primary market has also helped, albeit on a selective note," he
into the market. However, the rating added.
change just reverses the negative Mutual funds' assets under management (AUMs) hit a record of Rs21.4 trillion
sentiment in the bond markets for in October, as falling fixed deposit rates and rising stocks encouraged more people
the time being. to put money in mutual funds.

16 | 2017 | DECEMBER | BANKING FINANCE

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