Street signs: MFs bet on easier compensation rules, India VIX surges & more

MFs bet on easier ‘compensation’ rules

 

The implementation of the compensation circular, which was extended to October from July by the Securities and Exchange Board of India (Sebi), has given a window of hope to the fund houses.

 

Officials in the industry believe that the market regulator might give some concessions on the aspect of key employees of the fund houses. “It seems that the regulator might reduce the applicability only to the key people like CEOs, CIOs, and research team,” said the CEO of a top fund house.

 

In April, Sebi had announced that 20 per cent of the salary of key executives would be paid in the form of units of mutual fund (MF) schemes they oversee.

 

However, the key executives included the CEO, CIO, chief information security officer, chief operation officer, direct reportees to the CEO, and the fund management and research teams.

 

Chirag Madia

 

Lean balance sheets to help realty

 

Listed real estate developers with lean balance sheets are expected to benefit from rising market share. Analysts said, India’s real estate sector, especially the unlisted space, continues to grapple with high costs as well as debt.

 

On the other hand, the balance sheets of listed developers have become leaner. That puts them in a strong position to invest for growth and is likely to accelerate the pace of consolidation in the sector.

 

"Listed developers in our coverage universe (ex-REITs) have been relishing the “Debt Diet” and have been able to bring down their consolidated net debt levels by 37 per cent to Rs 27,400 crore between March 2020 to June 2021," said a note by ICICI Securities. DLF, Oberoi Realty, Macrotech Developers (Lodha), Phoenix Mills and Brigade Enterprises are expected to gain.

 

Sundar Sethuraman

 

India VIX surges on weak global cues 

India VIX, also known as the fear gauge or volatility index, surged 8.6 per cent on Friday to end at 14.02 as benchmark indices retreated mirroring global cues.

 

The gauge has risen nearly 18 per cent this month amid Indian equities making new highs, but is far lower than this year’s peak of 28.14 touched in February.

 

Global markets have come under pressure this week on fears of a taper (reduction in liquidity) by the US Federal Reserve later this year, surge in Covid-19 cases in key economies and regulatory crackdown in China. Indian market could see some more volatility if the global cues remain weak. 

 

Ashley Coutinho