Mutual funds go shopping; hike stake in PSBs in March quarter

Domestic mutual funds (MFs) have raised their stake in public sector banks (PSBs) in January - March 2017 quarter. In the first three months of calendar year 2017 (CY17), they have collectively put in Rs 11,469 crore in the Indian equity market, data show. The flow continued in April as well, with the MFs putting in Rs 9,917 crore compared to Rs 4,196 crore in the previous month. In past seven months, between October 2016 and April 2017, mutual funds have pumped in Rs 53,469 crore in equities. By comparison, they had invested Rs 16,527 crore in the previous corresponding period. Of the 16 PSBs where mutual funds hold stake, their holding in 13 banks increased by up to three percentage points in the March quarter. In eight banks, including State Bank of India (SBI), Canara Bank, Oriental Bank of Commerce (OBC), Vijaya Bank, Corporation Bank and Bank of India (BoI), MFs have increased their holdings for the second straight quarter in a row, data show. Financial Astrology Tips

Analysts attribute the stake hike in PSBs to the likelihood of an improvement in financial metrics amid policy initiatives of the government and the Reserve Bank of India (RBI) to tackle the non-performing asset (NPA) issues."Bank stocks have been doing well and caught investors' fancy in anticipation of likely policy measures to tackle the NPA problem. I think things will change over time, as all the stakeholders - banks, RBI and the government - realise that these problems need redressal. Given that the markets are forward looking, a lot of this development has been pre-empted," explains Ramnath Venkateswaran, fund manager - equity at LIC Mutual Fund. Among individual banks, Oriental Bank of Commerce, Punjab National Bank (PNB), Bank of Baroda (BoB) and Union Bank of India have seen rise of more than one percentage of shares held by MFs. On the other hand, Andhra Bank, Indian Bank and J&K Bank saw MFs cut their stake by less than 50 basis points, the shareholding pattern data suggests. Astrology and Numerology Trading Tips