Housing finance stocks drop after Sebi's review on investment limits by mutual funds

Shares of five housing finance companies dropped by 0.58% to 2.83% at 13:50 IST on BSE after the stock market regulator lowered the additional exposure limit provided for mutual funds' investment in housing finance companies' debt instruments.

Meanwhile, the BSE Sensex was down 154 points, or 0.66%, to 24,660.58.

GIC Housing Finance (down 2.83%), LIC Housing Finance (down 1.59%), Gruh Finance (down 2.48%) and Dewan Housing Finance (down 2.61%) declined.

Stock market regulator Securities and Exchange Board of India (SEBI) lowered the additional exposure limit provided for mutual funds' investment in debt instruments of housing finance companies (HFCs) within the finance sector to 5% of the net asset value (NAV) of the scheme from existing 10%. This is part of the Sebi's decision to tighten norms on mutual funds' investment in debt instruments with a view to mitigate risks arising on account of high levels of exposure in the wake of a crisis recently at JPMorgan Asset Management Company due to a payment default on debentures by Amtek Auto.

HDFC dropped 0.58%. The company announced after market hours yesterday, 11 January 2016, that HDFC Standard Life Insurance Company, a material subsidiary of the company, on 10 January 2016, incorporated a wholly-owned subsidiary in the Dubai International Financial Centre (DIFC) called the HDFC International Life and Re Company (HILRCL) with an initial capital outlay of $12.33 million. Further, HILRCL will operate in DIFC, and shall shortly commence its business operations, subject to completion of further regulatory formalities for obtaining the final license from the Dubai Financial Services Authority. HILRCL would be in the business of offering reinsurance capacity to ceding insurers and may also foray into directly underwriting insurance contracts, subject to receipt of necessary approvals. It would initially offer reinsurance capacity in the UAE and subsequently expand to other jurisdictions, using either of the aforesaid business models.

Powered by Capital Market - Live News