Street signs: MFs' Infy stake at 18-yr high, CPSE ETF investors, and more

The shareholding pattern data shows that MFs raised their stake in Infosys to 12.75 per cent in the December quarter from 11.55 per cent in the previous quarter

MFs’ Infosys stake at 18-year high 

The domestic fund managers have been raising their bets on information technology (IT) major Infosys. The shareholding pattern data shows that mutual funds (MFs) raised their stake to 12.75 per cent in the December quarter from 11.55 per cent in the previous quarter. 

This is the highest stake held by mutual funds in the company since 2001, when stocks of software services companies were falling after several years of boom. Fund managers have turned bullish on the company given its stronger growth performance in constant currency terms vs Tata Consultancy Services in the past two quarters. Analysts say the company’s improved financials in the September and December 2018 quarters have added to the conviction of fund managers.

Jash Kriplani

Tough year for CPSE ETF investors

The Central public sector enterprises (CPSE) exchange traded fund (ETF), launched as part of the government’s divestment programme, has had a rough run. It has shed 23 per cent in the past year compared to gains of 1.35 per cent made by the Nifty. 

The ETF has a skew towards energy and oil marketing companies and has been hit by the volatility in global crude oil prices. While crude prices have stabilised, the outlook remains uncertain. Despite the steep correction, experts suggest investors will be better off buying shares of individual state-owned companies rather than a basket of shares. Any further stake dilution by the government may impact share prices of these companies.

Ashley Coutinho

MFs increase focus on debt

Debt fund managers are readying themselves for a deluge of corporate bonds from April. With the Securities and Exchange Board of India making it mandatory for large corporates to raise 25 per cent of their borrowings through debt securities from the next financial year and equities expected to remain volatile, fund houses believe that this would soon become a booming segment. According to market sources, several fund houses are also looking at hiring more people to strengthen their debt teams.

Joydeep Ghosh