MASTER MIND FINNASSET: MFs hike exposure to bank stocks at 14-month high at Rs 40,293 crore, Lowest investment in hardware stocks

Monday, April 14, 2014

MFs hike exposure to bank stocks at 14-month high at Rs 40,293 crore, Lowest investment in hardware stocks

Mutual Funds investment in banking sector increased to Rs 40293.25 crore as on 31 March 2014, being the highest inflows in 14-months. The rising stock market helped the exposure in the banks stocks to rise.

This accounted for 19.76% of their total equity assets under management (AUM) of Rs 2.04 lakh crore, as per the latest data available with SEBI.

Moreover, the banking index (bankex) increased by 18.6% in March this year, while the Sensex rose 6%.

At Rs 40293.25 crore as on 31 March 2014, this was the highest level since January 2013, when fund managers had shored up their investment in banking shares to Rs 42,759.76 crore, being the second consecutive monthly rise in exposure from the record high of Rs 43,659.21 crore in December 2012.

According to market participants, MFs have shown interest in banking stocks since September last year primarily on account of measures announced by the new Reserve Bank Governor Raghuram Rajan coupled with overall surge in the stock market.

In September 2013, Mutual Funds' exposure in banking stocks increased to Rs 26,838.34 crore after touching the lowest level in four years at Rs 22,743.91 crore in August 2013, driven by the measures announced by the new RBI governor Raghuram Rajan in September 2013, to curtail Rupee depreciation and various measures to liberalise the banking system, including higher overseas borrowing limits for lenders.

Banking sector was followed by software sector, with Mutual Fund investments at Rs 24315.26 crore. Pharma stocks accounted for Rs 16066.27 crore, while consumer non-durables attracted Rs 12947.03 crore and petroleum products at Rs 10908.79 crore. The lowest investment was in hardware stocks at Rs 1 lakh.

Under the debt category highest investments by Mutual Funds was made in Bank Certificates of Deposit (CDs) at Rs 2.76 lakh crore with highest of Rs 1.49 lakh crore in CDs less than 90 days maturity.

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