Street signs: Power Grid stock, fund managers feel the heat, and more

Mutual funds (MFs) bought 390 million shares of state-owned Power Grid worth Rs 80 billion in August, as per data from Prime Mutual Fund database. The shares posted gains of 10 per cent in August. The buying indicates the change in sentiment on the counter. Fund houses had earlier offloaded 90 million shares in June quarter as they brought down their stake from 9.3 per cent to 7.6 per cent. The stock has seen sharp volatility this month, dipping from Rs  202 to Rs  187 and recouping all the losses in the last two sessions. Market watchers say the power transmission utility continues to be on the buy list of fund managers.

Jash Kriplani

Fund managers feel the heat

The high volatility in the market coupled with steady inflows is creating a headache for fund managers. With the lack of direction even in many large-cap stocks, they are unable to decide whether it is a good time to invest or sit on cash. “Retail investors have shown a lot of resilience this time. Despite high volatility, there hasn’t been much churn. But the problem for many fund managers is choosing the right stock to invest,” says the CEO of a fund house. Many believe that it would be a good time to invest in an exchange-traded fund, especially one that mirrors the Nifty or Sensex. “It would be a much safer bet now,” adds the CEO

Joydeep Ghosh

India’s FTSE EM weight under threat

India’s weightage in global indices has been climbing up this year thanks to the outperformance to other emerging market (EM) peers. However, its weight in the FTSE EM index is under threat due to a possible change in methodology. 

The UK-based index provider is planning to include Mainland China shares to its global indices. More importantly, FTSE is likely to assign bigger initial weight to China-A than its rival MSCI, according to a report in Bloomberg. To accommodate the so-called China-A shares, the weight of other markets, including India, will have to go down. MSCI's move to include Mainland China shares had not move the needle much thanks to the low inclusion factor.

Samie Modak