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Business Standard
13-06-2025
- Business
- Business Standard
Mutual fund cash exposure declines for the first time in six months
Equity mutual fund (MF) schemes reduced their cash holdings in May for the first time in six months, as geopolitical and trade tensions showed signs of easing. According to a Motilal Oswal Financial Services report, the top 20 fund houses held 6.8 per cent of their portfolios in cash as of May 31, down from a record high of 7.2 per cent in April 2025. Fund managers have been increasing cash levels since December 2024 amid a market correction and rising global uncertainties. May brought relief on multiple fronts. Fears of an India–Pakistan conflict subsided after a ceasefire, while progress on the India–UK trade deal and easing the US–China tensions improved the trade outlook. Additionally, sustained foreign portfolio investor (FPI) inflows buoyed domestic market sentiment. Benchmark indices extended their gains for the third straight month, with the Nifty and Sensex rising 1.9 per cent and 1.8 per cent, respectively. Broader markets outperformed, as the BSE 500 surged 3.5 per cent, marking an improvement in market breadth after months of weakness. However, domestic investor participation remained tepid. Equity MF inflows fell for the fifth consecutive month to ₹19,013 crore — the lowest in 13 months. Despite this, fund managers deployed cash aggressively, purchasing equities worth ₹49,000 crore in May, nearly triple April's buying. Most major fund houses reduced cash levels. SBI MF, the largest, cut its cash holding from 10 per cent to 8.6 per cent, while ICICI Prudential's declined from 8.2 per cent to 6.9 per cent. Cash levels are seen as an indication of the fund manager's view of the market. While MF executives maintain that their mandate is to remain fully invested, they strategically maintain some cash reserves during periods of market uncertainty. However, according to experts, changes in cash levels in equity schemes can also be transitory due to major changes in portfolio or sharp inflow or outflow at the end of the month. The change in value of equity holding due to market movement also impacts the cash holding on a percentage level. SBI MF maintained a 'neutral' stance on equities, citing balanced valuations, it said in a note. 'The sharp drop in 10-year bond yields over the past few months has meant that on our preferred gauge of equity valuations, which looks at equity yields as a relative spread to government bond yields, equity valuations stay near averages even with the uptick in equity markets over the past few weeks,' the report said. 'In addition, equity sentiment as measured by our proprietary framework stays in the neutral zone after the cool off from stretched readings of the past year through the correction,' it said. 'The recent drop in bond yields has kept equity valuations near historical averages, even after the market rally,' it added. The fund house added that its proprietary sentiment indicators remain neutral after cooling off from the previous year's elevated levels. In its latest outlook on the equity market, ICICI Prudential MF said that while the long-term structural story of India remains intact and there are tailwinds for economic growth to pick up, valuations remain an issue. "Recent RBI actions like liquidity injection; key policy rate cuts, high dividends to the government are positive for India's business cycle and in turn may result in India's growth and corporate earnings to pick up. investors with a long-term view can remain invested in equity markets. However, due to high valuations. the fresh investments should be done prudently," it added.
Time of India
12-05-2025
- Business
- Time of India
Ceasefire and trade peace signal a turning point for market stability: DP Singh
We hope that business will be as usual now and see, of course, we being the long-term player, the mutual funds always being the long-term player, so we will not be looking at any trading opportunities, but yes, a big-big positive for the markets. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "We hope that business will be as usual now and see, of course, we being the long-term player, the mutual funds always being the long-term player, so we will not be looking at any trading opportunities, but yes, a big-big positive for the markets," says DP Singh , Deputy MD, SBI MF Yes, of course, it is a big-big relief for all the investing community and see, of course, nobody wants a war, conflict, kind of situation because that not only impacts the sentiments, it impacts the economy also in a big way. It has come as a relief. So, we hope that business will be as usual now and see, of course, we being the long-term player, the mutual funds always being the long-term player, so we will not be looking at any trading opportunities, but yes, a big-big positive for the because see a growing economy like ours always gets benefited by the overall stable situation across the globe and these kind of jittery conditions what were prevailing between us-China and so many other places, that is likely to be over very soon and we should concentrate on our businesses, we should concentrate on what we have done with UK, what we are doing with USA, those kind of positives we will look forward from now onwards. Hoping that that everything will be calm peaceful at the Indo-Park borders, it is a moment to move on with as usual, we always say that investors should continue investing money in Indian market for a long-term perspective and that golden rule have seen some of weaknesses, of course, whatever will be there will be analysed over the period of time. So, this is the point, this is the moment to consolidate, and see investors should continue to put in money. You have seen the last month's SIP investors have continued to put in money, but for the big ticket, the HNI investors and the lump sum money which was awaiting us, I hope that those kind of moneys will also start coming into the market is very difficult to talk about the sectors, but bottom-up stories are always there. There are good companies with the good management, good growth perspective which remain across the sectors and we as the fund house always look for those opportunities. It depends upon how strong, how competent your research team is a way to go and find out the good companies and start investing in the infancy stage to create wealth for the investors. And I am very confident that we are the ones who can do it. The mutual industry overall has got a very-very strong research bias. For the investors looking at the mutual funds is a way to go only thing is that the number of listed companies is little, something which is us. We need more and more listed companies. And as per the regulations we can invest only in the listed space, so that is something which we are working on along with the regulator as an industry also, how more and more companies can be brought into the public space. It is all positive, win-win for the investors going I told you that this sector specific, same way cap specific also it is very difficult to take a call, definitely because number of companies are more in mid and smallcap. So, naturally the find in those sectors will be it is better to be into the flexicaps or multicap kind of funds which have both largecap, midcap, mid and smallcap and to some extent in multi-asset allocation fund commodities as well, it is better to play that game rather than getting into only smallcap, midcap, or only the largecap fund. Let it be done by the experts who are there in the fund houses and they will take care of it.
Economic Times
12-05-2025
- Business
- Economic Times
Ceasefire and trade peace signal a turning point for market stability: DP Singh
So, naturally the find in those sectors will be more. "We hope that business will be as usual now and see, of course, we being the long-term player, the mutual funds always being the long-term player, so we will not be looking at any trading opportunities, but yes, a big-big positive for the markets," says DP Singh, Deputy MD, SBI MF. What better news this weekend firstly on India front, the fact that both the countries have agreed to a ceasefire must bring a lot of relief to investors as well because we did see markets fairly jittery last week. DP Singh: Yes, of course, it is a big-big relief for all the investing community and see, of course, nobody wants a war, conflict, kind of situation because that not only impacts the sentiments, it impacts the economy also in a big way. It has come as a relief. So, we hope that business will be as usual now and see, of course, we being the long-term player, the mutual funds always being the long-term player, so we will not be looking at any trading opportunities, but yes, a big-big positive for the markets. And the other hand, of course, there is also news that US and China could have finally struck a trade deal on tariffs. The announcement, of course, and the nitty-gritties and the nuances will be announced when they hold a press conference later today our time, but that is where you think a big overhang gets lifted from the market minds? DP Singh: Yes, because see a growing economy like ours always gets benefited by the overall stable situation across the globe and these kind of jittery conditions what were prevailing between us-China and so many other places, that is likely to be over very soon and we should concentrate on our businesses, we should concentrate on what we have done with UK, what we are doing with USA, those kind of positives we will look forward from now onwards. Hoping that that everything will be calm peaceful at the Indo-Park borders, it is a moment to move on with positivity. Help us understand what should be the strategy for the Indian investors right now. Well, of course, a lot of moving parts when it comes to the geopolitical situation turning up, but on the flip side, a lot of positive too, like we were highlighting the global cues are turning positive. We have that India-UK trade deal that went through. How should investors place their bets? DP Singh: See, as usual, we always say that investors should continue investing money in Indian market for a long-term perspective and that golden rule continues. We have seen some of weaknesses, of course, whatever will be there will be analysed over the period of time. So, this is the point, this is the moment to consolidate, and see investors should continue to put in money. You have seen the last month's number. The SIP investors have continued to put in money, but for the big ticket, the HNI investors and the lump sum money which was awaiting us, I hope that those kind of moneys will also start coming into the market now. What is your own analysis, where do you think money or money will find its way and where do you think money is to be made because up until now what one has seen is that there is almost a consensus towards banks, but do you think there will be some bottom-up stories? There is some clarity coming in on pharma tariffs as well. Do you think maybe bottom-up under-owned sectors will now make a comeback? DP Singh: It is very difficult to talk about the sectors, but bottom-up stories are always there. There are good companies with the good management, good growth perspective which remain across the sectors and we as the fund house always look for those opportunities. It depends upon how strong, how competent your research team is. There is a way to go and find out the good companies and start investing in the infancy stage to create wealth for the investors. And I am very confident that we are the ones who can do it. The mutual industry overall has got a very-very strong research bias. For the investors looking at the mutual funds is a way to go forward. But only thing is that the number of listed companies is little, something which is us. We need more and more listed companies. And as per the regulations we can invest only in the listed space, so that is something which we are working on along with the regulator as an industry also, how more and more companies can be brought into the public space. It is all positive, win-win for the investors going forward. Investors after the correction which played out until the month of March had gotten very weary and pretty much everyone was taking concentrated moves within largecaps. Do you think it is now time to shift some allocation to small and midcaps or do you think largecaps and flexicaps are still the way to go? DP Singh: As I told you that this sector specific, same way cap specific also it is very difficult to take a call, definitely because number of companies are more in mid and smallcap. So, naturally the find in those sectors will be more. So, it is better to be into the flexicaps or multicap kind of funds which have both largecap, midcap, mid and smallcap and to some extent in multi-asset allocation fund commodities as well, it is better to play that game rather than getting into only smallcap, midcap, or only the largecap fund. Let it be done by the experts who are there in the fund houses and they will take care of it.
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Business Standard
29-04-2025
- Business
- Business Standard
Ather Energy's IPO subscribed 28%; last day of issue on Wednesday
The initial public offering (IPO) of Ather Energy was subscribed 28 per cent on Tuesday, the penultimate day of the issue. The institutional investor portion was largely unsubscribed, with just 7,636 shares bid against the 28 million shares on offer. The wealthy investor or high net worth individual portion was subscribed 27 per cent, the retail investor portion was subscribed 1.1 times, and the portion reserved for the employees of the firm was subscribed 3.2 times. Ather Energy, whose IPO began on April 28, raised Rs 1,340 crore from 36 anchor investors on Friday. Some of the marquee names who have been allotted shares include SBI MF, Franklin Templeton Global, Aditya Birla Sun Life MF, Abu Dhabi Investment Authority (ADIA), Eastspring Investments, ICICI Prudential MF, Invesco MF, among others.
