Street signs: MFs turn cautious on ICICI MFs turn cautious on ICICI Bank The ICICI Bank stock has fallen over 7 per cent in the last month as investors have turned cautious after allegations of corporate governance lapses at the private sector bank. Several domestic mutual funds (MFs) have trimmed their exposure to the stock. According to data, ICICI Prudential Asset Management Company sold 21 million shares of ICICI Bank during May while Birla Sun Life has sold nearly 9 million shares in the same month. READ MORE Stocks in news U.S. court restrains Dr Reddy’s from selling generic variant of Suboxone. ICICI Bank Board may name Sandeep Bakshi as ICICI Bank Interim CEO. NTPC: The firm has inked pact with Noida Authority to use treated sewage water at Dadri plant. PNC Infratech : The Uttar Pradesh government has cancelled the on-going bidding process of Purvanchal Expressway Project that comprises eight individual packages and decided to go for fresh bidding. The company was earlier declared as L1 bidder for the fourth package of the above project. Panacea Biotech along with partner Apotex settle patent dispute with Celgene Corp. HCL Infosystems concludes sale of entire stake in HCL Services to Karvy Data Management Services. Kanoria Chemicals and Industries to set up Formaldehyde plant with 1 lakh tonne per annum in Andhra Pradesh. SMS Lifesciences India has received Establishment Inspection Report from the US Food and Drug Administration for manufacturing facility - Unit-I, Kazipally, Hyderabad, after its inspection in April. Globalspace Technologies acquires strategic stake of 70.80% in Miljon Medi App. Shreyas Shipping & Logistics' associate company Avana Logistek filed its draft red herring prospectus with the Securities and Exchange Board of India for its initial public offering. The issue consists of a fresh issue of Rs 300 crore and an offer for sale of up to 43 lakh equity shares by Transworld Holdings, Mauritius, the promoter of Avana. Andhra Bank raises MCLR by 0.05% for various tenors Punjab & Sind Bank raises one-year MCLR to 8.6% from 8.5% with effect June 16. (Source: Nirmal Bang report) NEWS ALERT YES BANK, India’s 4th largest private sector Bank, has received final approval and registration from Securities and Exchange Board of India (SEBI) for acting as Custodian of Securities. “Custodian of Securities” is a license granted by SEBI to eligible entities allowing them to offer custodial services to financial market participants including Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs). Fund facts After rising by 6.7% in the previous month, domestic mutual funds’ (MF) equity AUM declined marginally by 0.3% MoM to Rs 7.98t in May. The fall in equity AUM was driven by a flattish performance of the markets (Nifty). While equity scheme sales were up 4.6% MoM to Rs 282b, redemptions rose 10.9% MoM to Rs 161b. Consequently, net inflows declined from Rs 124b in April to Rs 121b in May. Total AUM of the MF industry fell 2.8% MoM to Rs 22.6t in May, primarily led by a decrease in AUM of liquid funds (down by Rs 584b), income funds (down by Rs 52b), balanced funds (down by Rs 33b) and equity funds (down by Rs 21b). Net inflows for the MF industry in CY18YTD stand at Rs 1.5t, 41% of which is contributed by equity funds. All categories of funds – except income, GILT, gold ETFs and FOF – witnessed positive inflows. Equity AUM, as a percentage of India’s market capitalization, is at an all-time high of 5.4% (+80bp YoY, +20bp MoM). (Source: Motilal Oswal report) (Image source: IIFL report) MARKET COMMENT We do not expect major acceleration in the exports momentum due to moderating global trade, although an improvement due to a low base is likely. This along with higher imports (especially oil) would keep the trade deficit elevated. Given FDI flows are now insufficient to fund the CAD and global liquidity is tightening, and INR has outperformed the EM peers so far, a depreciating bias on USDINR is likely. We revise our FY18/19 USDINR average to 68/69 (from 66/66 previously) (Source: Edelweiss Research)