By: Divya Vohra
For the first time that the value of mutual fund equity portfolio in listed Indian firms crossed the portfolio holding of LIC
According
to the data collected by Prime Database, at the end of September, the value of
mutual fund equity portfolio in listed firms stood Rs.4.94 lakh crore
compared to Rs.4.75 lakh crore held by PSU insurance behemoth Life
Insurance Corp. of India (LIC).
– This was thus the first time that the
country’s 44-firms strong mutual fund industry overtook LIC as a bigger owner
of local stocks. Mutual fund holdings were spread across 1,088 companies while
LIC has invested in 310 firms.
– On total assets managed, however, mutual
funds continue to lag LIC. In the September quarter, the 44 mutual fund houses,
managed an average Rs.16.10 trillion of investor assets (as disclosed in
the data from the Association of Mutual Funds in India (AMFI). In comparison,
LIC, which manages insurance contracts for at least 250 million people, had
total assets worth Rs.21 lakh crore.
In words of Dhirendra Kumar, chief
executive of Value Research Ltd, a New Delhi based mutual fund analytics firms,
“This is a clear positive for equity markets”. Also, “Broad based institutional
play improves the market’s efficiency to a great extent”. “Since mutual funds
are required to follow regulatory disclosure for every investment and the fund
managers are subjected to great probity by investors, the increase in mutual
funds’ equity participation in such a scenario is a strongly positive
development. Additionally, since the equity inflows are steady growing rather
than abruptly jumping, it means the money coming to the fund industry is a
sustainable asset.”
According to Pranav Haldea, managing
director of Prime Database, during the September quarter, the holding of mutual
funds went up in 338 companies and came down in 322 companies listed on NSE.
Between July and September, LIC increased its stake in at least 38 firms while
trimming its stake in 71 firms.
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