Street signs: Reits reborn, investment fast track, global money in motion

Reits reborn: The ‘Sahi Hai’ moment of truth?

With data benchmarking institutions established for the analysis and comparison of real estate investment trusts (Reits), the market regulator now wants the industry to follow the example of mutual funds (MFs) in its promotions. At a recent event, a senior official from the Securities and Exchange Board of India recommended that the Indian Reits Association come up with catchy taglines, such as ‘Reits Right Hai’, ‘Reits Bhi Sahi Hain’, and ‘Know Your Reits’, in an effort to replicate the success of ‘MFs Sahi Hai’ by the Association of Mutual Funds in India. The regulator is doubling down on its efforts to promote this investment product, which currently has assets under management of Rs 1.4 trillion and is likely to grow further with the inclusion of fractional ownership platforms in real estate under the Reits framework, targeting small and medium Reits.

The IPO Express: All aboard the investment fast track

Except for the muted debuts of Kross and Tolins Tyres, initial public offerings (IPOs) had a stellar run last week. PN Gadgil Jewellers listed at a premium of 74 per cent over its IPO price, while Bajaj Housing Finance’s stock soared 2.4 times on its listing day, marking the best-ever listing performance for an IPO over Rs 3,000 crore, following Tata Technologies’ 2.6 times surge in November last year. The IPOs of Western Carriers (India), Arkade Developers, and Northern Arc Capital, which collectively raised Rs 1,680 crore, were subscribed 32, 113, and 117 times, respectively. In addition to these three listings, this week will see the opening of KRN Heat Exchanger & Refrigeration (KRN Heat Exchangers) and Manba Finance issues. Currently, Manba is trading at a premium of 50 per cent to its issue price in the grey market, while KRN Heat Exchangers is at 100 per cent. “It is the best of times and the season of hope,” quipped an investment banker.

Global money in motion: The investment ripple effect

Investors are looking westward to gauge whether markets will rise further or correct this week. The 50-basis point rate cut by the US Federal Reserve and the decline in US unemployment benefit applications, which raised bets for a soft landing in the world’s largest economy, helped the benchmark National Stock Exchange Nifty end with a gain of 1.7 per cent last week. Whether the domestic market gains or takes a breather this week will partly depend on foreign portfolio investor (FPI) flows. FPIs made their largest single-day purchase in three years on Friday, primarily due to the semi-annual rebalancing of FTSE indices. Valuation concerns continue to trouble investors, as the 50-stock index is trading at a 12-month forward price-to-earnings ratio of 21.3 compared to its five-year average of 19.3. “The key support levels are 25,980 on the upside and 25,445 on the downside. Valuations are expensive globally. Much depends on the flows; if they continue, valuations can expand at these higher levels, too. Investors might target stocks in the banking and metal sectors, as these have been battered, and an economic revival is anticipated in China at some point, possibly within a month or a quarter,” said an analyst.