Aberration or trend reversal?
The mutual fund industry saw a sharp drop – 60 per cent month-on-month – in equity inflows in March. This has raised doubts on whether this is an aberration or a trend reversal. Sector executives are quick to point out that the low inflow tally is on account of churning of portfolios by investors ahead of long-term capital gains implementation. Meanwhile, some believe investor flows could be tapering amid spike in the volatility. However, high gross sales figure suggest that the drop in inflows could be just an aberration. Gross inflows stood at Rs 391 billion in March compared to Rs 323 billion in February. And large part of Rs 361-billion redemptions in March are due to technical factors, say executives. If they are to be believed, the party continues for now.
Analysts, fund managers bet on UPL
Agrochemicals major UPL is seeing good attention from investors and fund managers. The company raised $300 million in the first week of March by selling dollar-denominated bonds to foreign investors. The issue was subscribed around six times. Analysts say the company plans to use most of the loan to reduce its high-cost debt. “It is a stable company and a good bet in a volatile market condition,” says an analyst. In the past month, the stock is up from Rs 702 to Rs 753, around 7.2 per cent, while most of the major benchmark indices are flat or marginally down.
Short positions built up in Infosys
Savvy traders are building up short positions in technology major Infosys ahead of its March quarter results announcement on Friday. Shares of the company have come off five per cent in the past fortnight. Analysts say the company could revise downwards its profitability and margin forecast on account of pricing pressure and increased investments. This is the Infosys’ first results announcement under new CEO, Salil Parekh. On most past occasions, its stock has seen huge volatility after its quarterly earnings.