The Data is courtesy http://amfiindia.com (AMFI)
October turned out to be buoyant for the entire economy with retail and auto sectors reporting a 30% + uptick in sales and mutual funds also adding a neat INR 20000 Crores or $4.33 billion.
However individual fortunes were mixed as some fund houses managed to lose in Assets under management in the cracker season. UTI MF grew further by INR 3260 Crores or $720 million, and even Tata MF growing by INR 2500 Crores or $550 million. A small player like Kotak grew its corpus by INR 1350 Crores or $ 300 million. It is definitely a market whose time has come.
However Religare lost over 350 crores in AUM in the festive celebrations as it also withdrew from its AIG The newer giant Reliance at INR 116782 Crores also reported a reduction of INR 2000 crores and the growth is favoring the progressive biggies with a good corporate governance score. ICICI Prudential kept losing custom with markets withdrawing their favor after the recent turmoil in its ranks losing a miniscule but significant INR 400 crores, while its larger rival HDFC MF has taken its market share up to 12.23% growing to INR 93.300 Crores
The only other significant player in the Birla Sun Life MF grew rapidly by INR 2000 crores with the AUM of INR 65.500 crores reflecting a market share of 8.5% Ajay as head of the Financial Services business for the group has recently appeared in a a few network interviews to beef up these gains and reiterate BSL’s plan and vision in the upcoming wealth explosion in India. Fidelity MF remained between ICICI and HDFC in the rankings with INR 87000 crores or $19 billion without reporting any close ended schemes in October
UTI MF grew best in its Income funds with INR 5000 Crores adding in its Treasury Advantage plan and HDFC has grown its best performing Prudence ( Balanced ) and Top 200 ( Equity , medium risk ) schemes among others
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Lifestyle Infrastructure
One of our special themes at the Advantages weblogs has been our assertion that US, India, China and most of the rest of the world that is growing
is likely to do so on the basis of a consumption revolution. Below is out insight piece that opened the chapter on India's final coming out that was much awaited but wasn't really happening till 2009..
The Commonwealth Games Infrastructure Train
A few years ago, when the Indian women shot Gold in Commonwealth Hockey and our aim in general started consistently being medal grade, we won the bid for New Delhi to host the games in 2010. This business of infrastructure had been mystifying sportspersons for decades in India; none too easily supported by the overarching smell of rent and inadequate facilities for local sports persons historically.
Even today most sports would bow out in front of Cricket and that is not a full-fledged event at the CWG, though there is still a toss-up for the T20 version to be added. Like most other spheres of life, China has been doing it higher, faster and stronger, having already held the challenging Olympics in 2008 earning over $2b for Beijing, the host city.
The story is quite public and you must have all followed it at least since August 2009 when the first few fistcuffs were exchanged regarding the lack of preparations for the CWG event now just 6-7 months away. The Sports Minister and the Games Organising Committee Chair Suresh Kalmadi has variously ben painted and vilified while we look at the rejuvenated parts of Wembley in London and survive on facepaint and cheering the local IPL franchise in Cricket games. The painting of events apart we just thought it important for Sports and Tourist infrastructure worth $1.5 billion to be included in the India story at about this time.
This preamble would survive your taste buds and your snipping scissors in the mind and we�ll come back right after lunch is over for you..
And the Original piece..follow up article on our Lifestyle Economics stream
If you have been following the India story closely, India�fs new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories athttp://advantages.us/inframils to get a flavor of what�fs happening in Indian Infrastructure
On the other hand Retail Lifestyle businesses are increasingly attracting investors�cRural Markets may grow at a faster pace at least on the Drawing board. �c Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors?..
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies�f profits in the coming years�c
(The image is of a young indian golfer in Scotland)
BUT, Importantly, India caught on to serious lifestyle investments early in 2005, Today with the debut of Cox and Kings IPO..
Where it is now?
Towns like Jalandhar, Ludhiana in Punjab, Jaipur and Agra on the Golden Triangle and such state capitals, heritage and business towns like Ahmedabad, Surat and Nagpur present a unique opportunity for Indian hospitality business to scale up, esp as Indian railways, india�fs aviation footprint and the road infrastructure will follow in step with the boom. Note: The Indian Maharaja with TC, Maharajas Express with Cox & Kings, and the other two luxury trains have started first season bookings quite well and money is being spendt to add gym and pool to the Palace on wheels as well ( More here ) Golden Palace started from Bangalore is not doing so well apparently. The Maharajas Express for example is 84 persons at an average of $1000 per night for a 7 day- 8 night tour between Mumbai and Delhi
The Next Credit Crisis
US credit markets is far from over with over $225 billion of mortgage resets still to come. In Australia $50 billion AUD in commercial lending maturing in 2010. They won’t be able to tap the international markets as overseas Europe has $350 billion in commercial lending coming up for maturity and the US has mortgage resets of over $225 billion this credit crisis is far from over. Check out http://www.jpminvestmentgroup.com.au for more information.
JPM Investment Group
Over the last 6 months, regulatory bodies have taken a pro-active stance towards reforming the mutual fund industry. Some observations and thoughts:
It all started with the ban on entry load from July 2009. Basically, IFAs (Independent Fund Advisors) used to make anywhere between 1% to 2.25% as commission for selling MFs. This would be directly deducted from the investment and paid by the fund to the distributor. Today, customers are in a position to negotiate a commission with the intermediary and/or go to the agent who offers the least commission.
The last 3-4 months have witnessed a fall in inflows into equity funds. Inflows averaged roughly INR 4000cr over the last 4 months. The same number stood at INR 6000 cr in the Mar-July period. Players like India Post (the post office network) have stopped intermediation in funds till “there is more clarity on the issue”.
Then came a few more announcements from the regulator in November:
1) Stock brokers will be allowed to intermediate in MFs very soon.
2) MFs could become echange traded as soon as the next 6 months, with a common online trading platform
All this is great for the investor – more bargaining power, easy access to products and of course, lower commissions. However, the effect of all this on ‘trail commissions’ – paid annually by funds to intermediaries to keep their clients invested in the fund – is not yet clear. If stock brokers go the churn-route, looking to churn clients in and out of funds, fund managers will eventually see the futuility in offering attractive trail commissions. In any case, this space will witness a lot activity in the coming months.
posted by TEJASVI MOHANRAM on Friday, November 20th, 2009