Page 17 - Banking Finance December 2021

MUTUAL FUND

would have been perceived as a crypto China tightens oversight of that began more than two years ago,
fund even though it is not one, given the as regulators encourage the nation's
unusual craze around crypto currency at $3.7 trillion mutual fund retail investors to tap the capital mar-
the moment. It's a precautionary move market kets through professional institutions.
by the fund house," says Dhirendra Chinese regulators moved to tighten
Kumar, Founder, Value Research. oversight of the nation's 23.9 trillion Nippon India Mutual Fund
yuan ($3.7 trillion) mutual fund market, Launches India's first Tai-
Top Indian mutual fund banning product recommendations by
unlicensed firms and individuals. wan Equity Fund
debt fund is raising bets
Those without an advisory license will Nippon Life India Asset Management
on riskier corporate bonds be prohibited from giving fund recom- (NAM India), asset manager of Nippon
One of India's top fund managers is mendations or publishing performance India Mutual Fund (NIMF), has an-
turning bullish on bonds of riskier com- numbers, according to a notice from nounced the launch of Nippon India
panies, as an accelerating economic the China Securities Regulatory Taiwan Equity Fund on November 22,
recovery is giving a particular boost to Commission's Beijing bureau seen by 2021. The Fund will be India's first
open-ended equity scheme following a
the financial health of such businesses. Bloomberg.
Taiwan-focused theme.
"Lower-rated companies that have not The move cracks down on widespread
only survived but also improved their recommendations by unregulated This fund will be advised by Cathay SITE,
operational and financial metrics in the bloggers and agencies seeking to tap the largest Asset Manager in Taiwan
with $42.8 billion in AUM. It is also the
downturn make for an attractive in- growing demand for mutual funds
vestment proposition now," said Amit even as authorities limit licences to a largest segregated account manager in
Tripathi, who oversees about $15 bil- handful of firms. Regulators have also the Taiwan Equity market for Taiwan
public pensions, Nippon MF said.
lion of debt assets at Nippon India banned brokerages from hiring social
Mutual Fund. Such firms will gain most media influencers to attract new cus- The primary investment objective of
from an upturn in Asia's third-largest tomers while the nation has tightened Nippon India Taiwan Equity Fund is to
economy, he said. controls over broad swathes of its provide long-term capital appreciation
economy in other areas to limit risks. to investors by primarily investing in
"Many companies have used the pan-
equity securities listed on the Taiwan
demic stimulus to clean up their bal- Distributors without an advisory li-
ance sheets by either cutting debt, cence need to comply with the new Stock Exchange. It will follow a Multi
Cap investment strategy with a port-
refinancing at lower costs or raising rules by June 30, according to the docu-
folio comprising of growth and value
equity, and they are now in the best ment from the CSRC. The regulator's
shape," said Tripathi, who manages Shanghai and Guangdong branches is- stocks. The fund focus will be on new
India's top-performing corporate bond sued similar directives earlier this technology trends and will hold less
than 10% investment in a single stock.
fund. "This is giving us the comfort to month, the official Shanghai Securities
invest in quality non-AAA papers." News reported.
Sebi asks PMS managers
The ratio of upgrades relative to down- Over the years, regulators have
grades in credit ratings of Indian firms cracked down on opaque shadow-bank- for client deal data
hit a decade high of 3-to-1 in the first ing products, brought more rigor to The Securities & Exchange Board of
half of the financial year, according to stock investing by introducing registra- India (Sebi) has asked all portfolio man-
Crisil Ltd., the local unit of S&P Global tion-based initial share sales and agement service (PMS) providers, who
Ratings. Tripathi expects the credit opened up to global fund houses from handle investments of the rich and ul-
scores to improve further in the next Vanguard Group to BlackRock. tra-rich, to submit information on the
18-to-24 months as economic revival
Dozens of securities firms and MFs quantum of various securities bought
gains traction. have been granted licenses in a trial by different kinds of clients.

BANKING FINANCE | DECEMBER | 2021 | 17