Sebi's 2018 move to reclassify market capitalisation of stocks and put exposure limits on different category of mutual funds vastly reduced active fund managers' wiggle room, as it required largecap schemes to keep at least 80 per cent of investment in largecaps and midcap funds need to put 65 per cent of assets in mid-rung stocks. This led to too much money chasing fewer top-rung stocks, resulting in the current top-heavy situation in the market. The question is, will this make active mutual funds behave like passive funds after a point?
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded 51 points lower at 7 am (IST), signalling some pain on Dalal Street. Elsewhere in Asia, share markets ran into turbulence amid a flareup of tensions in West Asia as the US detected a heightened state of alert by Iran's missile forces.
HERE'S WHAT TO WATCH  | MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.2%. Japan's Nikkei slid 1.7% in a sour return from holiday, while e-Mini futures for the S&P 500 fell 0.4% in very choppy trade. |
| US stocks on Friday ended a holiday-shortened week solidly lower, following escalating tensions in the Middle East and a drop in US manufacturing activity to its lowest in a decade. Dow shed 233 points to 28,634, while S&P500 fell 23 points and the Nasdaq 71.42 points |
| Oil prices added to their gains on fears any conflict in the region could disrupt global supplies. Brent crude futures rose $1.02 to $69.62 a barrel, while WTI crude climbed 81 cents to $63.86. |
| The rupee plunged by 42 paise to settle at a one-and-a-half-month low of 71.80 against the US currency on Friday due to a spike in crude oil prices |
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Low Risk, High Returns… Blue-chip corporate debt is emerging as a viable investment option with an increasing number of conservative Indian savers seeking low-risk but higher-return alternatives to bank term deposits. That quest for higher yields should ensure good market response this week to the NCD issues of Tata Capital and Shriram Transport. Even first-time investors could buy into the Tata Capital issue, opening January 7 while the seasoned ones could look at buying both offers, with the Shriram sale opening on January 6, investment advisers said.
Read More Look Who's Cruising… The premium SUV market in India has bucked the trend in the overall passenger vehicle sales, growing by a third in the past year as consumers upgraded to large, feature-rich products like the MG Hector and Tata Harrier. As many as 61,336 premium SUVs were sold in the local market in 2019, compared with 46,107 units the previous year. Passenger vehicle sales are estimated to have dropped by around 13% to 2.95 million units in the same period — the sharpest fall since the industry started reporting sales data in 1997.
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The Split at the Top... Almost half the top 500 listed companies are yet to comply with the Sebi rule on splitting the roles of the chairperson and managing director, which takes effect from April 1. This stipulates that the chairperson of the board should be a non-executive director and should not be related to the managing director or CEO. Data shows the chairperson has an executive role in 213 companies, while the chairman is also MD or CEO in 161 of them, including RIL, HUL, ONGC, Coal India, NTPC, BPCL and PowerGrid.
Read More NLCT Way… Debt investors of Reliance Home Finance, a unit of Reliance Capital, are planning legal action that may include a request for initiating recovery proceedings in the NLCT against the stressed financier, which defaulted on bond repayments due earlier this month. Multiple industry sources aware of the developments told ET that IDBI Trusteeship, which is representing the interests of RHFL's non-convertible debenture holders, has appointed Shardul Amarchand Mangaldas as the legal adviser for the affected investors, numbering about 20,000.
Read More Telecom Booster in Q4... The hike in telecom tariffs is set to immediately boost revenue, operating income and margins of Reliance Jio, Bharti Airtel and Vodafone Idea in Q3. Analysts, however, expect the full impact of higher tariffs to be palpable only in the January-March period. Experts said the increased tariffs are unlikely to have triggered any sharp fall in consumption of voice and data services.
Read More Meanwhile... There is a Twist in the Tata-Mistry Saga! Cyrus Mistry on Sunday withdrew his claim to the executive chairman's post in Tata Sons and directorship in group companies, in a dramatic twist to the more than three-year-old tussle for control of the Tata Group's holding company. Mistry's statement came as a surprise to observers, considering that the NCLAT had on December 18 overturned his ouster from the post of Tata Sons chairman in 2016. "I will, however, vigorously pursue all options to protect our rights as a minority shareholder, including that of resuming the 30-year history of a seat at the board of Tata Sons," he said.
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