Debt funds boost mutual fund assets: CRISIL

The mutual fund industrys assets under management AUM reached a new peak at the end of August touching Rs.7.57 trillion...

The mutual fund industrys assets under management AUM reached a new peak at the end of August touching Rs.7.57 trillion,growing by 5 per cent over the previous month. Only the debt category,driven by ultra short term debt funds,registered net inflows during the month. All other categories saw net outflows.

As for returns,equity funds outperformed due to strong performance from mid-cap and small-cap funds while long-term debt funds saw negative returns due to rising yields. Ultra short term debt funds saw strong inflows in August,with banks parking their surplus funds in these schemes. The new no entry load rule seems to have initially dulled the inflows into equity funds even though fund performances were good during the month, said Krishnan Sitaraman,director,CRISIL Fund Services.

Poor monsoon to affect auto sector after festival season

Edelweiss Research has said in a recent report that in North,West and South India,the impact of a weak monsoon does not seem to be substantial so far on the passenger car and two-wheeler segment. Nearly 90 per cent of the dealers barring some in UP and Haryana that their researchers met expected the festival season beginning October to be strong. The exception is the tractor segment where inventory build up is visible.

Based on their interactions with dealers,the researchers have concluded that around 50 per cent of two-wheeler and 30 per cent of car volumes in the rural sector are accounted for by farmers,around 30 per cent by the salaried class,and the balance by businessmen primarily small traders,dependent on farmers for their income. Hence,around 70 per cent of vehicle buyers are directly or indirectly dependent on agriculture. Hence,most dealers over 90 per cent expect the impact of poor rains on volumes to be felt December onwards. However,late rains that augur well for the post monsoon Rabi crop and various measures by state governments may buffer the blow.

WPI inflation turns positive

For the week ending September 5,2009,headline inflation the wholesale price index,WPI stood at 0.12 per cent. Inflation for the week ending 11 July 2009 was revised to - 0.63 per cent from - 1.17 per cent. Looking forward,we expect food prices to move up due to the start of the festive season in October. WPI inflation could cross 7 per cent by end March 2010, says a research note from Anand Rathi Financial Services.