India Regulator Shows Funds the Way to Meet New Investment Rule

Christel Deskins

(Bloomberg) — India’s market regulator has allowed mutual funds to choose from options to comply with its investment rules for multi-cap products, putting to rest speculation that the norms could push as much as 400 billion rupees ($5.4 billion) to the broader market. © Bloomberg Elevators travel next to electronic […]

(Bloomberg) — India’s market regulator has allowed mutual funds to choose from options to comply with its investment rules for multi-cap products, putting to rest speculation that the norms could push as much as 400 billion rupees ($5.4 billion) to the broader market.



a large long train on a steel track with Centre Georges Pompidou in the background: Elevators travel next to electronic boards displaying stock figures at the National Stock Exchange of India Ltd. (NSE) building in Mumbai, India, on Friday, Dec. 16, 2016. The NSE plans to file a draft prospectus this month for an initial public offering of about 100 billion rupees ($1.5 billion), pushing ahead with the nation's biggest listing in more than six years after its top executive resigned, people with knowledge of the matter said.


© Bloomberg
Elevators travel next to electronic boards displaying stock figures at the National Stock Exchange of India Ltd. (NSE) building in Mumbai, India, on Friday, Dec. 16, 2016. The NSE plans to file a draft prospectus this month for an initial public offering of about 100 billion rupees ($1.5 billion), pushing ahead with the nation’s biggest listing in more than six years after its top executive resigned, people with knowledge of the matter said.

Money managers can, among other things, merge their multi-cap plans with large-cap funds or convert them to another category like large-and-mid cap products, to ensure they stick to their mandate of investing in a wide set of stocks, the Securities & Exchange Board of India said in a circular on Sunday.

Loading...

Load Error

The regulator said market participants had drawn their own conclusions from its order late Friday that mandated multi-cap funds must invest at least 25% of their assets in each of large, mid, and small-cap stocks. Analysts, including Morningstar Investment Adviser, had estimated the ruling would led to 350 billion to 400 billion rupees flowing to the broader market as fund managers recalibrate their portfolios to buy smaller companies.

READ: Small Cap Stocks Set for $5.4 Billion India Regulatory Boost

“The need to incrementally buy mid and small caps would be lowered significantly” if funds opt for the alternatives, JM Financial Research said in a note Monday. Sebi’s Friday ruling “would have had far-reaching ramifications on stock prices, given how thinly traded some of these stocks are.”

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

Video: Indonesian equities will struggle despite attractive valuation: Credit Suisse (CNBC)

Indonesian equities will struggle despite attractive valuation: Credit Suisse

UP NEXT

UP NEXT

Continue Reading
Next Post

6 Ways to Create a Culture of Innovation in a Virtual World

Companies like Facebook, Twitter, Box, Slack, and Salesforce all say that employees can keep working remotely well into next year or even forever. We’re seeing a sea change toward remote work and how to make it more fun and effective. But what happens to the culture of teams and organizations […]