Page 30 - Banking Finance July 2021

ARTICLE

market share in terms of customer base. If they can be a positive factor where they can exploit the
leverage on big data analysis which is the need of the economies of scale and large clientele base. With
hour it can prove to be game changer for them. increase in size and enough capital base they will be
ready to take on private peers.
Y With more than 1.5 lakh outlet PSBs share a mammoth
presence and with more than 33% outlet in rural area
they can leverage for more business in tier 3 to tier 6 Going ahead:
cities. Data shows going ahead these centers will add The impact of COVID-19 and prolonged lock down will have
to growth of financial institutions. serious ramification in the MSME portfolio of all the players
in the segment. A deeper analysis will reveal the
Y With the induction of fresh blood into the stream PSBs
quantification of the slowdown but with the strength of PSBs
are shedding the legacy problems and are getting
younger by reducing the average age of staff they can better manage the situation than the peers. The
complement. major factor that will make the PSBs stand out is their
penetration to rural economy in tier 3 to tier 6 cities. The
Y Learning from the mistakes PSBs are now coming out
recent focus on EASE reform agenda has started a sea
with more differentiated products suiting to needs of change in the culture of PSBs and now they are also
different segments of MSMEs which will enhance the leveraging new technologies like big data analysis, AI etc.
experience and reduce the turnaround time creating a With the proper utilization of technology PSBs can regain
wow factor for the customers. the lost glory which is already evident from the results for

Y The synergy achieved by amalgamation of PSBs will also last few quarters. T

Punjab National Bank, SBI Life among top mutual fund buys in May
Punjab National Bank, SBI Life Insurance Company, and Indus Towers were the three top large-cap buys by Mutual
Funds in the month of May, data sourced by ICICI Direct showed. Meanwhile, Hindustan Zinc, Britannia Industries,
and Colgate Palmolive were the most sold large-cap stocks in the previous month. The mutual fund industry saw net
inflows of Rs 10,500 crore in May - highest since March 2020 - as stock markets resumed rally and inched close to all-
time highs. The assets under management of domestic equity funds increased 7.7% on-month to Rs 11.1 lakh crore
during the month.
Punjab National Bank was the most purchased large-cap stock by mutual funds in May. The number of shares of the
lender held by mutual funds increased 88% between April and May. This was followed by a 40% increase in SBI Life
Insurance stocks and a 21% increase in Indus Towers.
Among Midcap stocks, Zee Entertainment Enterprises was purchased the most as AMC increased their holding in the
firm by 60%. Zee was followed by Jubilant Pharmova, and Godrej Industries. Meanwhile, TCNS Clothing Co, TV18
Broadcast, and Magma Fincorp were the top smallcap buys.
Fund houses sold Hindustan Zinc stocks to decrease their stock holding in the company by 20.5%. The number of Britannia
Industries' shares held by mutual funds decreased by 12% in May and that of Colgate Palmolive dropped by 11.8%.
Among midcap stocks, GMR Infrastructure, IIFL Wealth Management, and JSW Energy were the top stocks sold during
the previous month.
Mutual funds increased exposure to PSU banks to a 15-month high in May. The weight of PSU Banks reached 3.4%, an
increase of 30 basis points from the previous month and an increase of 120 basis points from the year-ago period. "As
a result, the sector - which was in the thirteenth position a year ago - climbed to the ninth position in the allocation
of mutual funds," brokerage firm MotilalOswal said in a report.
Other sectors where fund managers increased weights include oil & gas, automobiles, capital goods, insurance, and
private banks. Meanwhile, healthcare, metals, consumer, technology, telecom, chemicals, consumer durables, and
the cement sector reported a month-on-month decline in weights. At the end of May, Private Banks continue to
dominate sectoral allocations with 18% weightage, followed by Technology with 11% weight, Healthcare with 7.6%,
NBFCs with 7.4%, and oil and gas with 7.1% weightage.

30 | 2021 | JULY | BANKING FINANCE