Street Signs: IPO market to feel June burn, No mountain too high for Nifty

China’s markets rekindle MF interest

China’s equity market has underperformed global and emerging-market equities in the past two calendar years. Also, global investors have turned averse to investing in China, given the regulatory uncertainty. Some believe China’s markets have the potential to outperform going forward, given the valuation comfort. Experts say China and the US markets are now inversely correlated. Against this backdrop, Invesco Mutual Fund (MF) is preparing to launch a China-focused international scheme. Investments in China-focused MF schemes are yet to pick up in India, and it will be interesting to watch if the recent run-up in Chinese equities will lead to higher inflows into these schemes. At present, there are five China-focused schemes that together manage only Rs 2,300 crore. Investors have been seeing value in the Chinese market in recent months after a deep correction in 2022 brought valuations to an attractive zone.

IPO market to feel the June burn

The initial public offering (IPO) market has yet to benefit from the gains in the secondary market in recent months. The IPOs of IKIO Lighting and JG Chemicals may hit the market next month. Bankers say companies are circumspect amidst heightened volatility. Moreover, companies prefer to hit the markets after updating their January-March quarter numbers. According to the Securities and Exchange Board of India regulations, financials are valid for up to six months. However, bankers say companies prefer to have the financial statements of the quarter preceding listing date. “For issues where we have international marketing, they are expected to be valid for 135 days. It’s not a regulatory requirement but an investor preference,” observes a banker.

No mountain too high for Nifty: May scale new peaks

The benchmark National Stock Exchange Nifty may scale new peaks. According to analysts, the index remained rangebound during the middle of the week. However, the recovery on Friday changed the tone and helped the index cross the hurdle at 18,400. “The Nifty looks set for a new high after the consolidation breakout, thanks to improved participation from diverse sectors. However, stability on the global front will be critical; otherwise, the momentum may possibly derail. On the downside, the 18,050–18,200 zone will offer support in case of a dip,” says Ajit Mishra, vice-president of research at Religare Broking.