The Economist's Zone

Capital markets regulator Securities and Exchange Board of India (SEBI), after 22 years revised the total expense ratio (TER) of mutual funds. In an attempt to reduce mis-selling and costs, the capital market regulator revised the TER in a board meeting on 18 September. The slab wise limits of TER introduced under SEBI (Mutual Funds) Regulations, 1996 have not been changed since then. “For starters lower expenses would translate into better returns for the investor. This would increase transparency as all scheme expenses are to be made public”, said Ganti Murthy, senior fund manager and fixed income professional.      The Assets Under Management (AUM) of mutual fund industry in India has grown manifold over the years. As on August 31, 2018, the AUM of the industry has crossed Rs 25 lakh crore. SEBI is of the view that while the AUM has grown multiple times, the benefit of economies of scale has not been fully shared with the investors. It is also observed that...

    Indicating increasing and rising economic activities, banking sector in Qatar recorded a credit growth of 3.5% y-o-y in July 2018. According to the latest QNB Qatar Monthly Monitor, bank deposits have seen a 5.3% growth y-o-y in July. Though the public sector deposits with local banks have seen a 6.9% decline m-o-m in July, deposits from non-residents and private sector grew 6.1% and 2.2% m-o-m respectively in July, said the QNB report. Also, the broad money supply (M2) grew 10.3% y-o-y in this GCC country in July.   Key inter-bank rates continued to hold steady, while Qatar’s 5-year credit default swap (CDS) spread edged down to 82bp; its lowest since March, stated the report. According to QNB Qatar Monthly Monitor report, in the first quarter of the year, the real GDP growth slowed in Q1 thanks to a further fall in hydrocarbon output. Non-hydrocarbon GDP growth was a solid 4.9%, y-o-y.   Booming construction output, up 17.2% y-o-y, rem...

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi has approved the proposal of the Department of Fertilizers for equity investment of Rs.1033.54 crore (+ ) @ 29.67% of the total project cost for setting up a Coal Gasification based fertilizer project in Talcher Fertilizer Ltd. (TFL) by Rashtriya Chemicals & Fertilizers Limited (RCF). The revival of the Talcher project will ensure huge investment in the fertilizer sector from the Government through PSUs.  This will create job opportunities and also boost the economy of the State and the eastern region.  The revival of the fertilizer unit will also ensure increase in indigenous production of urea leading to greater self-reliance in urea. Earlier on 12 September 2018, The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given ex-post facto approval for: I. transfer of land of M/s Rashtriya Chemicals & Fertilizers Ltd. (RCF) to Mumbai Metropolitan Regiona...

  Raj Mehta, Debt Fund Manager, PPFAS Mutual Fund   “ With the interest rate and inflation rate differential between US and India, the INR should depreciate approximately 4-5% every year over the longer term ”, said Raj Mehta, debt fund manager, PPFAS Mutual Fund in an interview with Anjali Raulgaonkar ( https://theeconomistzone.blogspot.com/ )     Raj Mehta, PPFAS Mutual Fund                                     Excerpts:   1. Net inflows into domestic equity mutual funds fell 11.4 percent month-on-month to Rs 8,375 crore in August. what can be the possible reasons behind it besides profit booking? What are the expectations in coming months?   The flows have cooled off a little bit since January 2018 given that last year was a very high base. Most of the inflows last year was in the m...

   Chandraprakash Padiyar, senior fund manager, Tata Asset Management            “If crude price corrects from current levels below $70 then Rupee could appreciate along with pressure of interest rates going away”, said Chandraprakash Padiyar, senior fund manager, Tata Asset Management, in an interview with Anjali Raulgaonkar ( https://theeconomistzone.blogspot.com/ )  Excerpts: 1.       Net inflows into domestic equity mutual funds fell 11.4 percent month-on-month to Rs 8,375 crore in August. what can be the possible reasons behind it besides profit booking? What are the expectations in coming months? Sequential movement in flows may not be the right data point to focus at. On an absolute basis Rs. 8000 crore + monthly net inflow is by itself a fairly strong number. FY18 was actually a strong year for flows and hence FY19 numbers in comparison looks lower. SIP book ...

  Non-oil and gas sector to drive growth   Business conditions across Qatar's non-oil and gas private sector improved once again in August 2018. The headline seasonally adjusted Qatar Financial Centre PMI – a composite gauge designed to give a single figure snapshot of operating conditions in the non-oil and gas private sector – softened to 50.4 in August, from 52.0 in July, partly reflecting a slight fall in output. The figure remained in positive territory, however, and stretched the current phase of expansion to 13 months. Qatar has attained a significant progress in its efforts to diversify economy in the past five years. During 2013-2017, the economy of the State of Qatar has recorded a compound annual growth rate (CAGR) of 2.8%. This period has been characterized by the maturation of Qatar’s oil and gas mega projects and the moving towards a more diversified economy, fundamentally in sectors like transportation and storage, construction, financial and ins...

The Indian Rupee is witnessing a hard time. On 6 September 2018, it dropped past 72 a dollar, reaching a record 72.1050. The lack of strong intervention by RBI and investors worries pushed the currency down even though its other Asian nobles witnessed rise.   The geopolitical tensions, tariff wars and rising oil prices have taken a toll on Asian currencies. Rupee witnessed a major hit falling sharply nearly 3% in the last 15 trading sessions, to stand at 72.11, from 70, fueling investor uncertainty.   Brent, the benchmark has jumped by more than 70 per cent from a low close in the middle of last year. The commodity is trading at $77.45 per barrel, below a three-year high of $80.50 per barrel reached in May. Rising oil prices will probably widen India’s current-account deficit of gross domestic product this financial year.   India’s current account deficit (CAD) is pegged at $13 billion or 1.9 per cent of the GDP in Q4 of 2017-18, which in...