Street signs: MFs hit sell button, SLB mechanism gains traction, and more

According to data from stock exchanges and Sebi, domestic funds pulled out around $500 million while FIIs buying in the past few sessions neared $1 billion

MFs hit sell button 

Mutual funds (MFs) sold aggressively last week as foreign institutional investors (FIIs) stepped up buying. According to data from stock exchanges and the Securities and Exchange Board of India (Sebi), domestic funds pulled out around $500 million while FIIs buying in the past few sessions neared $1 billion. The churn took place amid flaring up of tensions between India and Pakistan. “MFs took advantage of huge FII buying interest seen in the past few sessions. Moderating flows into equity schemes means MFs may not be big buyers like they were last year,” said an analyst.

Samie Modak

Mazagon Dock IPO hangs in balance

The fate of the Rs 500-crore initial public offering (IPO) of state-owned shipbuilder Mazagon Dock hangs in balance. Sources say the Centre is keen on launching the issue this month, however, the feedback from investment bankers isn’t encouraging. Experts say the spike in volatility may discourage investors from primary issuances. “Conditions are still challenging for IPOs. There is a push from the Centre as it is the last month of FY19. But broad-based investor appetite is missing,” said an investment banker.

Sundar Sethuraman

SLB mechanism gains traction

The securities lending and borrowing (SLB) mechanism is seen gaining traction. Market players say investors are getting lured towards this platform thanks to attractive yields on certain counters. Under the SLB mechanism, investors lend their shares to other investors for a fee. The investor, who borrows, uses the shares to create short positions. According to data, stocks such as Bajaj Auto, Motherson Sumi, RBL Bank and Ceat saw healthy trading on the SLB platform. Market players say the SLB system will gain further ground as physical deliveries becomes applicable for more stocks in the derivatives segment.

Samie Modak