On June 30, SEBI mandated three changes are being implemented that will change the way liquid funds will perform. Liquid funds shall hold at least 20% of its net assets in liquid assets to meet resemption pressures. These include cash, government securities, treasury-bills and repo on government securities. Secondly, irrespective of residual maturity, all money market and debt securities held in the liquid fund portfolio shall be valued on mark to market (MTM) basis to reflect a more realistic valuation of fund's NAV. Thirdly, debt funds can invest only up to 20% in a single sector, as against 25% earlier.
Net inflows into equity mutual funds plunged over 95% in June to Rs 240.55 crore from Rs 5,256 crore in May. The sharp dip in inflows due to outflows in midcap and largecap funds have come at the time when benchmark indices have surged thanks to abundant liquidity in the market. BSE Sensex gained 7.68% in June while BSE Midcap soared 10.23% and BSE Smallcap index rose 13.66%. As per Association of Mutual Funds in India (AMFI) data, overall SIP inflows in June fell to Rs 7,927.11 crore from Rs 8,123.03 crore in the previous month, a drop of 2.4%.
The Enforcement Directorate (ED) has confiscated assets worth Rs 329.66 crore of Nirav Modi, the prime accused in $2 billion PNB fraud case. A special court in Mumbai had on June 8 authorised the ED to confiscate the assets. Nirav Modi was declared a fugitive economic offender by the same court on December 5, 2019.The agency till now has attached assets worth Rs 2,348 crore of Nirav Modi under the Prevention of Money Laundering Act (PMLA).Nirav Modi (49) is currently lodged in a UK jail after being arrested in London in March, 2019 and is currently fighting extradition to India.
Nifty50 on Wednesday snapped a five-day winning streak and formed a bearish candle on the daily chart. For the day, Nifty closed at 10,705, down 93.90 points or 0.87%. Analysts largely see support for the Nifty index in the 10,620-650 range and the immediate hurdle at 10,750 level. A large bearish candle on the daily chart resembles the Bearish Engulfing candlestick pattern. Bearish Engulfing (2-candle) is one of the important bearish reversal patterns. In essence, a Bearish Engulfing Pattern tells you that the sellers have overwhelmed the buyers after an initial price uptrend and now the bears are in control.
The 200-day moving average (SMA) is a technical indicator used by traders to determine market trend. The 200-day SMA is represented as a line on charts and indicates the average price over the past 200 days or 40 weeks.The moving average can give traders a sense regarding whether the trend is up or down, while also identifying potential support or resistance levels. If the price is above the 200-day SMA indicator on the daily time frame, look for buying opportunities as the likely trend is upward. If the price trades below the 200-day SMA indicator, then look for selling opportunities.
Indian benchmark indices continued its volatile moves and ended with losses on Wednesday. Losses were led by Auto and IT indices. S&P BSE Sensex ended 345 points lower at 36,329 while the Nifty lost 94 points to settle at 10,706. IndusInd Bank, Vedanta, JSW Steel, Hindalco, and Dr Reddy's were the top gainers on the Nifty50 index, while Bajaj Finance, Zee, Asian Paints, Tata Motors, and HCL Tech led the losses. Sectoral performances were mixed during the day. Nifty IT, Nifty Realty and Nifty Auto lost around 2% each while Nifty Metal and Nifty Pharma rose 1.5% and 0.7%, respectively.
The finance ministry is prodding private sector banks and NBFCs to step up loan approvals and disbursals to MSMEs under the government’s Emergency Credit Line Guarantee Scheme (ECLGS). Most private lenders, barring HDFC Bank, have been slow to take off. Of the Rs 48,000 crore sanctioned by private players, around Rs 20,000 crore is estimated to have been sanctioned by HDFC Bank, prompting the government to nudge Axis Bank and ICICI Bank to take up the scheme more aggressively. HDFC Bank has so far disbursed around Rs 8,000 crore. Public sector banks have fared much better than their private peers.
MNC Funds are mutual fund schemes that invest mostly in high ranking multinational companies. In the last three months, the MNC fund category has given 16.22% returns. These schemes have returned 2.23% in the last one year, 3.25% in three years and 4.69% in five years. MNCs have strong corporate governance, and enjoy economies of scale. However they have their own share of economic and political risks. Experts believe that the near to medium term outlook of these schemes is good, but investors shouldn’t expect very high returns. MNC funds should only be used as diversification in an aggressive portfolio.
Nifty rallied over 1000 points in latter half of June, primarily driven by positive global sentiments and easing of lockdown restrictions globally. As per Edelweiss Securities, hopes of further stimulus from governments to battle the economic slowdown and value buying in beaten-down sectors kept markets afloat this month, in spite of poor economic data and cautious commentaries by most management. The brokerage has advised investors to remain cautious and watchful on markets in the current scenario. The top sectors to bet on going forward are two-wheeler and tractor stocks, large private banks, insurance, specialty chemicals, cement, and metals, it noted.
IndiGo is known to hire pilots in big numbers given its expansion plans and an ambition for aggressive international rise. However, the unprecedented disruption caused due to COVID-19 pandemic seems to have forced the airline to hit the pause button on hiring and inducting new pilots. The airline is unlikely to induct new batch of pilots before early 2021 as around 400 junior first officers and 300 senior pilots—who are in transition—are still in line to complete their respective training and flying hours. As of March 2019, IndiGo had 3,187 pilots and 6,248 cabin crew on its rolls.
Maruti Suzuki India (MSI) has so far transported over 6.7 lakh cars through the Indian Railways in the past six years. The increased focus on using railways has helped the company offset nearly 3,000 MT of carbon dioxide emissions. In addition, over 100 million litres of fossil fuel was saved, as the company could avoid over 1 lakh truck trips on the national highways. In FY 2019-20, over 1.78 lakh cars were dispatched through the rail mode, a 15% jump over 2018-19 dispatches. MSI is the first auto manufacturer in the country to obtain Automobile Freight Train Operator (AFTO) license.
Education technology startup Unacademy has acquired Chandigarh-based PrepLadder for $50 million in a cash and stock deal. This is Unacademy’s fourth acquisition in less than two years. The entire 250-member team of the postgraduate medical entrance exam preparation platform will join the Unacademy Group, including founders Deepanshu Goyal, Vitul Goyal, and Sahil Goyal. The two-year-old startup, which never raised any capital from external investors, has more than 80,000 subscribers. Unacademy, which began as a YouTube channel in 2015, continues to offer dozens of courses for school-going students at no charge. But last year it also launched a paid subscription service.
Uber Technologies Inc on Tuesday launched an app-based grocery delivery service in several Latin American and Canadian cities, with the United States to follow later this month. Customers in Canada's Montreal and Toronto, eleven Brazilian cities, including Rio de Janeiro and Sao Paulo, four Chilean cities, Colombia's Bogota and Peru's Lima will be able to order groceries from local stores and chains through the Uber Eats app. In Canada, groceries can be ordered from large chains Walmart Inc and Metro Inc. A launch in the U.S. cities is expected later in July, beginning with regional merchants in Miami and Dallas.
Leading fine dine restaurants and cafes which have opted to keep majority of their outlets shut even one month after the lockdown curbs were eased, have questioned the government’s policy on the continued ban on serving alcohol in restaurants and urged authorities to lift the ban. Hoteliers called for revision in guidelines if the industry has to survive and jobs protected. Industry estimates say the restaurant sector risks losing about two million jobs. While announcing Unlock guidelines, the government had issued standard operating procedures for restaurants including reducing the seating capacity to half, ensuring social distancing, and restricting serving liquor.
Indian paper industry has raised alarm with the Union Commerce ministry as paper imports from China went up by 14% to 2,89,000 tonnes in fiscal 2019-2020. During the same period, total paper import in India went up by 11% to 1.6 million tonnes. “Paper manufacturers in China and ASEAN countries enjoy access to cheap inputs and raw material, and also get incentives and subsidies in their countries. Allowing imports from these countries, at either nil or preferential import duties, into India does not provide a level-playing field to Indian manufacturers in the domestic market,” Indian Paper Manufacturers Association (IPMA) said.