February 27, 2017

Mutual funds exposure in Jan rise highest in second rung large caps



A story I contributed last week to the news organisation I work for currently:


Mutual funds exposure in Jan rise highest in second rung large caps
Feb 21, 2017

    By Rajesh Gajra
    NEW DELHI - Second rung large cap stocks attracted the attention of mutual fund schemes in January compared to the previous month with their exposure increasing at a rate higher than the rise in the market value of the stocks.
    Aggregate assets under management across all equity mutual fund schemes in stocks forming a part of the Nifty Next 50 index went up by 12.4%, or 75.22 bln rupees, month on month to nearly 680 mln as of end of January, data from Cogencis Corporate Fundamental Database showed.
    The on-month rise in Nifty Next 50 was just 8.8% in the same period. A difference between the rate of index value change and the change in the AUM can be ascribed to fresh investments made by the mutual funds from net
inflows across all their equity and equity-oriented schemes, including index ETFs and index funds.
    Reliance Mutual Fund, Birla Sun Life Mutual Fund, DSP BlackRock Mutual Fund and Kotak Mahindra were the most aggressive buyers in the large-cap stocks from Nifty Next 50 in January.
    The Nifty Next 50 index largely represents the second-rung large cap stocks after the Nifty 50's major large cap stocks.
    On the other hand, equity mutual fund schemes' collective AUM in the first rung large cap stocks of Nifty 50 stood at 2.89 trln rupees on Jan 31, up 8.0% on month while the index itself rose by just 4.6% on month (see table below).
    Mid cap stocks were also in demand with aggregate equity mutual fund AUM in Nifty Midcap 50 stocks going up by 7.9% on month to 396.91 bln rupees at the end of January.
    A substantial part of the on-month increase in large cap and mid cap stocks was driven by the deployment of fresh inflows by the Central Public Sector Enterprises Exchange Traded Fund managed by Reliance Mutual Fund.
    The CPSE ETF's follow-on public offer in January had fetched about 60 bln rupees. With inflow turning positive, the CPSE ETF's AUM in Nifty 50 stocks went up 3.4 times on month to 43.27 bln rupees, while its exposure to Nifty Next 50 rose by 3.5 times on month to 29.21 bln rupees and its exposure to Nifty Midcap 50 went up by 3.5 times to nearly 6 bln rupees.
    In the first rung large cap stocks of Nifty 50, besides Reliance Mutual Fund's contribution on account of the CPSE ETF inflow, SBI Mutual Fund, HDFC Mutual Fund and Kotak Mahindra Mutual Fund were seen jacking up their exposure.
    In particular, their schemes such as SBI Magnum Taxgain, SBI ETF Nifty 50, HDFC Prudence, Kotak Banking ETF and Kotak Select Focus saw sharp jumps in exposure to Nifty 50 stocks.
    The second rung large cap stocks from Nifty Next 50 were seen being bought by schemes such as Reliance CPSE ETF, Birla Sun Life Advantage, Birla Sun Life Enhanced Arbitrage, DSP BlackRock Top 100 Equity and Kotak Equity Arbitrage.
    Taking fancy for the mid cap stocks of Nifty Midcap 50 were HDFC Prudence, HDFC Top 200, Birla Sun Life Advantage and Birla Sun Life Equity.
    Mutual funds did not show any enhanced interest in small cap stocks despite the on-month return of 9.0% of Nifty Small Cap 100 being the highest among the four indices.
    The on-month rise in aggregate fund exposure to stocks of Nifty Small Cap 100 was 9.2% as of Jan 31, marginally higher than the 9.0% on-month rise in the index itself.
    Clearly, the month of January belonged to second rung large cap stocks and partly to mid cap stocks as far as change in equity mutual fund investments were concerned. 

The table below summarises the aggregate mutual fund AUM in index stocks:
                        AUM on Jan 31        Month-on-month change
                        (bln rupees)        AUM          AUM      Index
                                          (bln rupees)    (%)
                         -----------      ------------   ----     ----
Nifty 50                  2890.86         214.39          8.0     4.6
Nifty Next 50              679.68          75.22         12.4     8.8
Nifty MidCap 50            396.91          29.12          7.9     5.6
Nifty Small Cap 100        146.01          12.29          9.2     9.0

The tables below list mutual funds whose exposure went up considerably:
                               AUM on Jan 31    Month-on-month change
                               (bln rupees)     (bln rupees)    (%)
                                -----------      -------------------
In Nifty 50:
Reliance MF                      286.64         41.34           16.9
SBI MF                           342.15         35.99           11.8
HDFC MF                          455.97         32.93            7.8
Kotak Mahindra MF                115.37         10.22            9.7

In Nifty Next 50:
Reliance MF                       95.26         25.14           35.8
Birla Sun Life MF                 68.55          9.00           15.1
DSP BlackRock MF                  24.35          4.90           25.2
Kotak Mahindra MF                 30.33          3.25           12.0

In Nifty MidCap 50:
Reliance MF                       44.06          6.64           17.7
HDFC MF                           60.87          5.68           10.3
Birla Sun Life MF                 32.38          2.92            9.9
DSP BlackRock MF                  12.22          1.13           10.2

In Nifty Small Cap 100:
Reliance MF                       32.21          3.32           11.5
Birla Sun Life MF                 12.96          1.56           13.7
UTI MF                             6.88          1.21           21.4
L&T MF                             9.27          0.89           10.6

End

February 23, 2017

Mutual funds exposure in Jan rise highest in second rung large caps

​Here is a story I contributed earlier this week for the organisation I work for presently:

[C] Mutual funds exposure in Jan rise highest in second rung large caps
Cogencis, Tuesday, Feb 21

    By Rajesh Gajra
    NEW DELHI - Second rung of large cap stocks attracted the attention of mutual fund schemes in January compared to the previous month with their exposure increasing at a rate higher than the rise in the market value of the stocks.
    Aggregate assets under management across all equity mutual fund schemes in stocks forming a part of the Nifty Next 50 index went up by 12.4%, or 75.22 bln rupees, month on month to nearly 680 mln as of end of January, data from Cogencis Corporate Fundamental Database showed.
    The on-month rise in Nifty Next 50 was just 8.8% in the same period. A difference between the rate of index value change and the change in the AUM can be ascribed to fresh investments made by the mutual funds from net
inflows across all their equity and equity-oriented schemes, including index ETFs and index funds.
    Reliance Mutual Fund, Birla Sun Life Mutual Fund, DSP BlackRock Mutual Fund and Kotak Mahindra were the most aggressive buyers in the large-cap stocks from Nifty Next 50 in January.
    The Nifty Next 50 index largely represents the second-rung large cap stocks after the Nifty 50's major large cap stocks.
    On the other hand, equity mutual fund schemes' collective AUM in the first rung large cap stocks of Nifty 50 stood at 2.89 trln rupees on Jan 31, up 8.0% on month while the index itself rose by just 4.6% on month (see table below).
    Mid cap stocks were also in demand with aggregate equity mutual fund AUM in Nifty Midcap 50 stocks going up by 7.9% on month to 396.91 bln rupees at the end of January.
    A substantial part of the on-month increase in large cap and mid cap stocks was driven by the deployment of fresh inflows by the Central Public Sector Enterprises Exchange Traded Fund managed by Reliance Mutual Fund.
    The CPSE ETF's follow-on public offer in January had fetched about 60 bln rupees. With inflow turning positive, the CPSE ETF's AUM in Nifty 50 stocks went up 3.4 times on month to 43.27 bln rupees, while its exposure to Nifty Next 50 rose by 3.5 times on month to 29.21 bln rupees and its exposure to Nifty Midcap 50 went up by 3.5 times to nearly 6 bln rupees.
    In the first rung large cap stocks of Nifty 50, besides Reliance Mutual Fund's contribution on account of the CPSE ETF inflow, SBI Mutual Fund, HDFC Mutual Fund and Kotak Mahindra Mutual Fund were seen jacking up their exposure.
    In particular, their schemes such as SBI Magnum Taxgain, SBI ETF Nifty 50, HDFC Prudence, Kotak Banking ETF and Kotak Select Focus saw sharp jumps in exposure to Nifty 50 stocks.
    The second rung large cap stocks from Nifty Next 50 were seen being bought by schemes such as Reliance CPSE ETF, Birla Sun Life Advantage, Birla Sun Life Enhanced Arbitrage, DSP BlackRock Top 100 Equity and Kotak Equity Arbitrage.
    Taking fancy for the mid cap stocks of Nifty Midcap 50 were HDFC Prudence, HDFC Top 200, Birla Sun Life Advantage and Birla Sun Life Equity.
    Mutual funds did not show any enhanced interest in small cap stocks despite the on-month return of 9.0% of Nifty Small Cap 100 being the highest among the four indices.
    The on-month rise in aggregate fund exposure to stocks of Nifty Small Cap 100 was 9.2% as of Jan 31, marginally higher than the 9.0% on-month rise in the index itself.
    Clearly, the month of January belonged to second rung large cap stocks and partly to mid cap stocks as far as change in equity mutual fund investments were concerned.

The table below summarises the aggregate mutual fund AUM in index stocks:
                        AUM on Jan 31        Month-on-month change
                        (bln rupees)        AUM          AUM      Index
                                          (bln rupees)    (%)
                         -----------      ------------   ----     ----
Nifty 50                  2890.86         214.39          8.0     4.6
Nifty Next 50              679.68          75.22         12.4     8.8
Nifty MidCap 50            396.91          29.12          7.9     5.6
Nifty Small Cap 100        146.01          12.29          9.2     9.0

The tables below list mutual funds whose exposure went up considerably:
                               AUM on Jan 31    Month-on-month change
                               (bln rupees)     (bln rupees)    (%)
                                -----------      -------------------
In Nifty 50:
Reliance MF                      286.64         41.34           16.9
SBI MF                           342.15         35.99           11.8
HDFC MF                          455.97         32.93            7.8
Kotak Mahindra MF                115.37         10.22            9.7

In Nifty Next 50:
Reliance MF                       95.26         25.14           35.8
Birla Sun Life MF                 68.55          9.00           15.1
DSP BlackRock MF                  24.35          4.90           25.2
Kotak Mahindra MF                 30.33          3.25           12.0

In Nifty MidCap 50:
Reliance MF                       44.06          6.64           17.7
HDFC MF                           60.87          5.68           10.3
Birla Sun Life MF                 32.38          2.92            9.9
DSP BlackRock MF                  12.22          1.13           10.2

In Nifty Small Cap 100:
Reliance MF                       32.21          3.32           11.5
Birla Sun Life MF                 12.96          1.56           13.7
UTI MF                             6.88          1.21           21.4
L&T MF                             9.27          0.89           10.6

End

February 16, 2017

The Mountain Called Her By Name

New post on Barnstorming

The Mountain Called Her By Name

by briarcroft

getimage

Devi and father Willi

nandadevi

Nanda Devi courtesy of Stanford Alpine Club

view-php

The rippeld's arrival as a new junior in Olympia High School in 1970 reached me within minutes, as I felt the impact of her presence on campus immediately.  One of my friends elbowed me, pointing out a new girl being escorted down the hall by the assistant principal.  Students stared at the wake she left behind: Devi had wildly flowing wavy long blonde hair, a friendly smile and bold curious eyes greeting everyone she met.

From the neck up, she fit right in with the standard appearance at the time:  as the younger sisters of the 60's generation of free thinking flower children, we tried to emulate them in our dress and style, going braless and choosing bright colors and usually skirts that were too short and tight.   There was the pretense we didn't really care how we looked, but of course we did care very much, with hours spent daily preparing the "casual carefree" look that would perfectly express our freedom from fashion trends amid our feminist longings. Practicing careful nonconformity perfectly fit our peers' expectations and aggravated our parents.

But Devi never looked like she cared what anyone else thought of her.  The high school girls honestly weren't sure what to make of her, speculating together whether she was "for real" and viewed her somewhat suspiciously, as if she was putting on an act.

The boys were mesmerized.

She preferred baggy torn khaki shorts or peasant skirts with uneven hems, loose fitting faded T shirts and ripped tennis shoes without shoelaces.  Her legs were covered with long blonde hair, as were her armpits which she showed off while wearing tank tops.   She pulled whole cucumbers from her backpack in class and ate them like cobs of corn, rind and all.  She smelled like she had been camping without a shower for three days, but then riding her bike to school from her home 8 miles away in all kinds of weather accounted for that.   One memorable day she arrived a bit late to school, pushing her bike through 6 inches of snow in soaking tennis shoes, wearing her usual broad smile of satisfaction.

As a daughter of two Peace Corps workers who had just moved back to the U.S. after years of service in Nepal, Devi had lived very little of her life in the United States.  Her father Willi Unsoeld, one of the first American climbers to reach the summit of Mt. Everest up the difficult west face, had recently accepted a professorship in comparative religion at a local college.  He moved his wife and family back to the northwest to be near his beloved snowy peaks,  suddenly immersing four children in an affluent culture that seemed foreign and wasteful.

Devi recycled before there was a word for it simply by never buying anything new and never throwing anything useful away, involved herself in social justice issues before anyone had coined the phrase, and was an activist behind the scenes more often than a leader, facilitating and encouraging others to speak out at anti-war rallies, organizing sit-ins for world hunger and volunteering in the local soup kitchen.  She mentored adolescent peers to get beyond their self-consciousness and self-absorption to explore the world beyond the security of high school walls.

Regretfully, few of us followed her lead.  We preferred the relative security and camaraderie of hanging out at the local drive-in to taking a shift at the local 24 hour crisis line.  We showed up for our graduation ceremony in caps and gowns while the rumor was that Devi stood at the top of Mt. Rainier with her father that day.

I never saw Devi after high school but heard of her plans in 1976 to climb with an expedition to the summit of Nanda Devi,  the peak in India for which she was named.  She never returned, dying in her father's arms as she suffered severe abdominal pain and irreversible high altitude sickness just below the summit.  She lies forever buried in the ice on the faraway peak that called her by name.  Her father died in an avalanche only a few years later, as he led an expedition of college students on a climb on Mt. Rainier, only 60 miles from home.

Had Devi lived these last 40 years, I have no doubt she would have led our generation with her combination of charismatic boldness and excitement about each day's new adventure.  She lived without pretense, without hiding behind a mask of fad and fashion and conformity and without the desire for wealth or comfort.

I wish I had learned what she had to teach me when she sat beside me in class, encouraging me by her example to become someone more than the dictates of societal expectations. I secretly admired the freedom she embodied in not being concerned in the least about fitting in.   Instead, I still mourn her loss all these years later, having to be content with the legacy she has now left behind on a snowy mountain peak that called her by name.

getimage-1

 

briarcroft | February 16, 2017 at 7:17 am | URL: http://wp.me/poRrb-7kj





February 14, 2017

Oct-Dec 2016-17 earnings review of Piramal Enterprises



Piramal Enterprises Oct-Dec consol net profit margin growth flat YoY
Feb 13

Higher operating profit from its financial services and its
pharmaceuticals business segments drove Piramal Enterprises Ltd to record a
on-year jump of 32% in its consolidated net profit to 4.04 bln rupees in
Oct-Dec.
    Segmentwise data of the company showed the financial services segment
profit to more than double to 3.95 bln rupees in the December quarter from
1.84 bln rupees a year ago.
    Pharmaceuticals business of the company recorded a segment profit of 339
mln rupees in Oct-Dec, up 28% on year.
    Piramal Enterprises' information services business, on the other hand,
recorded a on-year fall of 10% in segment profit to 1.60 bln rupees in the
reporting quarter.
    The company's consolidated total income grew by 31% to 23.42 bln rupees,
driven by on-year increases of 96%, 8.3% and 9.3% in the segment revenues
from the financial services, pharma and information segments.
    The consolidated operating margin of Piramal Enterprises stood at 46.3%
in the December quarter, 850 basis points higher than that in the year ago
quarter.
    The segment margin, calculated as the percentage of segment profit to
segment revenue, rose the highest in the company's financial services segment to
43.7% in from 39.9%. Following it was the pharmaceuticals segment whose
margin went up to 3.5% from 2.9%. On the other hand, the information
management services business saw segment margin decline to 34.6% from 42.0% a
year ago.
    Though the operating margins grew at a robust pace, the consolidated net
profit margin of the company showed a near flat growth to 17.3% in Oct-Dec
from 17.2% a year ago.
    This was because of a sharp increase in the company's interest costs in
Oct-Dec which stood at 5.91 bln rupees, 130% more than the year ago quarter.
The company said this was primarily on account of increase in debt for making
investments under financial services business and partly for the acquisitions
in its pharma business.
    "This quarter (Oct-Dec) witnessed new acquisitions... We remain
committed to our overall business strategy of efficiently allocating capital
towards growing both organically and inorganically," Ajay Piramal, chairman
of Piramal Enterprises said in a company statement.
    In its pharma segment, the company said its global pharma business
revenue grew 5% on year to 8.70 bln rupees while its domestic consumer
products business rose 28% on year to 850 mln rupees. The company said
despite demonitisation, most brands under its consumer healthcare products
performed better than expectations.
Today,  Piramal Enterprises shares ended at 1,811.10 rupees on the NSE, up
1.94% over Friday.

February 01, 2017

India Budget 2017-18: Trend in Tax Revenue in last 4 years

Tax revenue trend from 2014-15 to 2017-18


In 2016-17 and 2017-18, indivudal income tax (majorly salaried taxpayer) receipt are up 25% year on year while corporate tax receipts are up just 9% YoY.

What it shows that Individual taxpayers of India are paying more tax every year at a pace much faster than that of companies are paying less.

Finance minister Jaitley has time and again supported this trend. But companies profit before tax runs into amounts in multiples of the taxable income earned by individuals (including those who are currently evading tax). So corporate tax should grow at a pace equal to, if not more, than the pace seen in rise of income tax collection from individuals.

          YoY change (%)  
  Actual  Actual Budget Revised Budget Estimates 2014-15 to 2015-16 to 2016-17 to
2014-2015 2015-16 2016-2017 2017-18 2015-16 2016-17 2017-18
A. TAX REVENUE              
(a) Taxes on Income and Expenditure 687260 733515 839699 972232 7 14 16
Corporation Tax 428925 453228 493924 538744 6 9 9
Taxes on Income Other Than Corporation Tax 258326 280322 345776 433487 9 23 25
Hotel Receipts Tax 1 1 ...        
Interest Tax 6 5 ...        
Fringe Benefit Tax -8 -46 ...        
Other Taxes on Income and Expenditure 11 4 ...        
(b) Taxes on Property and Capital Transactions 8484 8430 7398 7768 -1 -12 5
Estate Duty 0 1 ...        
Taxes on Wealth 1086 1079 ...   -1    
Gift Tax 0 0 ...        
Securities Transaction Tax 7398 7350 7398 7768 -1 1 5
(c) Taxes on Commodities and Services 546188 710068 852118 927150 30 20 9
Customs 188016 210338 217000 245000 12 3 13
Union Excise Duties 188128 287149 386415 405920 53 35 5
Service Tax 167969 211414 247500 275000 26 17 11
Other Taxes and Duties on Commodities and Services 2074 1167 1203 1230 -44 3 2
(d) Taxes of Union Territories without Legislature 3204 3879 4277 4680 21 10 9
GROSS TAX REVENUE 1245136 1455891 1703492 1911830 17 17 12
State's share excluded from the Consolidated Fund 337808 506192 608000 674565 50 20 11
Tax Revenue of the Central Government 907327 949698 1095493 1237264 5 15 13

Equity assets under PMS schemes jump 30% on year in Jan-Dec 2016

My recent contribution:

[C] Equity assets under PMS schemes jump 30% on year in Jan-Dec 2016
Cogencis, Monday, Jan 30

    By Rajesh Gajra
    NEW DELHI - Equity assets of portfolio managers registered with Securities and Exchange Board of India under the SEBI (Portfolio Managers) Regulations have been growing at a rapid pace in the last couple of years.
    And, the pace quickened in the Jan-Dec 2016 period as compared to the year ago period, an analysis of discretionary assets under management data released by Securities and Exchange Board of India showed.
    This indicates rising preference of high networth investors to invest in equities through the portfolio managers under their portfolio management schemes as the minimum investment size in these schemes is Rs 25 lakh and the investment strategies are specialised in nature.
    Total discretionary assets of portfolio managers in listed equity shares recorded a sharp rise of 30.1% to 620 bln rupees as of Dec 31 2016, compared to a year ago. This surge was more than the 4.1% rise seen in the same period in movement of the equity benchmark index, Nifty 50.
    In the Jan-Dec period of 2015, discretionary equity assets under portfolio managers had recorded a high rate of growth, with the corpus of 477 bln rupees as of Dec 31 2015 being 25.2% more than a year ago. This growth took place when the Nifty 50 actually recorded a decline of 4.1% in the same period.
    In contrast, the discretionary debt assets corpus of portfolio managers saw a lower growth rate of 17.1% in the Jan-Dec period of 2016 (see table).
    The debt funds corpus of portfolio managers comes predominantly from the funds of employees provident fund organization and various provident funds.
    Portfolio managers are allowed to invest on behalf on private clients under the SEBI regulations with a minimum investment ticket size of Rs 25 lakh per client, unlike mutual funds which solicit investment funds from public investors.
    Portfolio managers' assets under management are typically of two types--discretionary and non-discretionary.
    Under the discretionary mode, the clients authorize the portfolio to invest in any instrument or asset class under broad investment objectives specified in the fund prospectus. Under the non-discretionary category the clients direct the portfolio manager to invest their funds into specific instruments.
    As of Dec 31 2016, the total non-discretionary assets of portfolio managers in listed equities stood at 114 bln rupees.

DISCRETIONARY AUM UNDER PMS                           
                                    Dec 2016    Dec 2015          Dec 2016      Dec 2015
                               Assets under management         On-year change    
                                        (Rs billion)                           (per cent)      
Listed equities                620             477                    30.1             25.2
Plain debt                     8320           7107                    17.1             19.0
Mutual funds                   86               62                     38.1             23.7
Total*                           9201           7845                    17.3             18.4
- of which EPFO/PFs   8210          7083                     15.9            18.2
* across all asset classes and instruments

Source: Securities and Exchange Board of India