Street signs: InvITs see buying interest, SGX volumes see uptick, and more

InvITs see buying interest

With the prices of the two listed instruments gaining more than five per cent since March, infrastructure investment trusts (InvITs) seem to be witnessing a rise in investor interest. Analysts are bullish on Sterlite Power-led India Grid Trust, in particular, and see prices gaining 15 per cent from current levels. According to them, the product offers attractive cash yield of up to 14 per cent based on internal rate of return forecast for next fiscal. The yield is benchmarked to 10-year government security, which is currently at 7.85 per cent. Typically, InvITs generate 200 to 300 basis points additional internal rate of return over gilts.

Samie Modak
 

More pain for mid, small-caps ahead?
 

With the June 30 deadline fast approaching for mutual fund houses to reveal whether they have complied with the Securities and Exchange Board of India’s (Sebi’s) reclassification norms, market experts believe that there will be another round of sell-off in mid and small-cap stocks. “In good times, many schemes have invested in these stocks for generating alpha in their schemes. Many schemes may have to prune their stakes to be Sebi compliant,” says a mutual fund CEO. The mid-cap and small-cap indices are up 11 per cent and 6.84 per cent in the past year. However, over a three-month period, they have fallen 5.23 per cent and 7.85 per cent, respectively.

Joydeep Ghosh
 

SGX volumes see uptick in May

SGX Nifty volumes rebounded 10 per cent in May over the previous month amid the Singapore bourse announcing migration to new India products. In the preceding two months, volumes were down 25 per cent over February after the National Stock Exchange (NSE) announced the termination of licensing agreement. “Volumes once again picked up as investors got comfort that trading in India products will continue uninterrupted. It remains to be seen how volumes pan out in June, as the SGX-NSE battle has taken an ugly turn,” said an industry expert.

Samie Modak