Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
ôBourses in India touched new highs, with the benchmark-sensitive index breaching the 20,000 mark in October after initially giving up some gains because of panic caused by the regulatorÆs move to curb foreign inflows via the participatory notes route,ö notes Mumbai-based Dhruva Raj Chatterji, a research analyst at Lipper.
Foreign institutional investors (FII) pumped a record US$5 billion into equities during October. That marks the second highest month of FII inflows since the Indian capital markets were opened to foreign investors. The cumulative FII inflows in Indian equities up to the end-October was more than $17 billion, far ahead of flows witnessed in the past.
Funds with higher exposure to capital goods, power, and metal stocks outperformed in October, while those that focused on information technology, pharmaceuticals, auto, and fast moving consumer goods lagged.
However, the liquidity rush into India after the Fed cuts has resulted in a sharp appreciation in the rupee. The central bank has been trying to find a balance between controlling the surging rupee and protecting the export sector. The Securities and Exchange Board of India (SEBI) also moved to curb foreign inflows through participatory notes. Participatory notes are offshore derivative instruments used by foreign investors to buy Indian shares and debt instruments without disclosing the investorÆs identity.
SEBI banned in late-October the issue of participatory notes with derivatives as the underlying assets by foreign institutional investors effective immediately. Existing positions were given 18 months to be wound up.
Average October performance of fund groups registered for sale in India, by asset types:
Equity India +13.51%
Equity Emerging Markets +9.09%
Mixed Asset Other Flexible +8.65%
Mixed Asset Other Aggressive +8.14%
Equity Global +7.87%
Mixed Asset INR +6.76%
Mixed Asset Other Conservative +3.61%
Money Market INR +0.63%
Bond INR + 0.88%
Bond INR +0.80%
Bond USD -0.30%
Top 5 equity fund sectors in terms of performance in October, with their average gain:
Equity Sector Utilities +30.48%
Equity Sector General Industry +25.58%
Equity Sector Telecom Services +11.07%
Equity Sector Gold and Precious Metals +9.52%
Equity Sector Banks and Financial +8.35%
Bottom 5 equity fund sectors in terms of performance in October, with their average gain:
Equity Sector Information Technology +1.41%
Equity Sector Tech Media and Telecommunications +1.68%
Equity Sector Pharmaceutical and Health +1.68%
Equity Sector Cyclical Consumer Goods +3.68%
Sector Non-Cyclical Consumer Goods +5.07%
Top 5 equity funds in October, with gain:
Reliance Diversified Power Sector Fund +30.48%
Sundaram BNP Paribas CAPEX Opportunities Fund +26.06%
Sundaram BNP Paribas Select Focus +25.52%
Sundaram BNP Paribas CAPEX Opportunities Fund +25.09%
Sundaram BNP Paribas Equity Multiplier Fund +24.38%
Bottom 5 equity funds in October, with loss/gain:
ICICI Prudential Technology Fund -4.95%
UTI Software Fund-Income -0.59%
SBI Magnum Sector Funds Umbrella -0.44%
Franklin Infotech Fund -0.37%
Franklin Pharma Fund +0.08%
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