Exploring Indian fund managers' value investing, SEBI's risky asset class proposal, global economy insights, Zomato's funding needs, gig workers' employment status, SME IPO frenzy, and RBI's intervention in credit growth.
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Quick takeaways
Equity mutual funds in India are actively reducing cash holdings, indicating a positive market outlook among fund managers.
SEBI's proposal of a new asset class aims to cater to investors seeking higher returns through versatile strategies and increased risk tolerance.
Deep dives
Cash Holdings in Mutual Funds and Market Sentiment
Equity mutual funds have seen a decrease in their cash holdings to the lowest level in 5 months, indicating positive market sentiment among fund managers. Despite concerns of overvaluation in the market, the reduced cash holdings point towards optimism regarding investment opportunities. This shift highlights the balancing act fund managers face between missing out on market upswings with excess cash or facing increased risk during market downturns with low cash reserves.
New Asset Class Proposal by SEBI
SEBI has proposed a new asset class positioned between mutual funds and portfolio management services (PMS) with a minimum investment requirement of 10 lakh rupees. This new class allows for more versatile strategies, including directional market bets and leverage, thus offering potentially higher returns but with increased risk. The proposal aims to bridge the gap between lower investment mutual funds and higher entry barrier PMS, catering to investors with varying risk appetites and preferences.
Implications of RBI's Credit Growth Trends
RBI's credit growth data reveals a significant shift in lending patterns, with personal loans witnessing a slowdown post-regulatory changes while agricultural credit experiences a notable uptick. The risk weight increase for unsecured personal loans and credit cards contributed to the decline in their growth rates. Banks are adapting by allocating more funds to agricultural loans, despite the sector's modest growth rates, signaling a potential rebalancing of credit allocation strategies in response to regulatory measures.
This is the third weekly brief. We publish a new episode every day to help you understand the biggest stories in the Indian markets. But we understand that you may be busy and don't have the time to listen to the daily episodes. So don't worry, we've got you covered.
Every week, we'll publish a new episode simplifying the biggest stories of the week so that you can still look smart in front of your friends. In this week's episode, we look at these stories:
1) Are Indian fund managers really value investors?
2) SEBI proposes a new asset class for people who want to take risk
3) The Global Economy is a Little Good, a Little Bad
4) Zomato wants more money!
5) Are gig workers- employee or on contract?
6) SME IPO Frenzy
7) Credit looked like a party until RBI stepped in
We also send out a crisp and short daily newsletter for The Daily Brief. Put your email here and we'll make you smart every day: https://thedailybriefing.substack.com/
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