Market round-up: Listed fund flows to India at 18-month high

Active global emerging market funds have an 11.6% allocation to India, which is 3.7 percentage points overweight relative to the benchmark


The inflows were led by passive funds, which took in around $845 million, analysts at Kotak Institutional Equities said in a note based on EPFR (Emerging Portfolio Fund Research) data. Photo: Bloomberg
The inflows were led by passive funds, which took in around $845 million, analysts at Kotak Institutional Equities said in a note based on EPFR (Emerging Portfolio Fund Research) data. Photo: Bloomberg

Listed fund flows to India rose to $1.3 billion in August, the highest since March 2015. The inflows were led by passive funds, which took in around $845 million, analysts at Kotak Institutional Equities said in a note based on EPFR (Emerging Portfolio Fund Research) data.

The note states that active global emerging market funds have an 11.6% allocation to India, which is 3.7 percentage points overweight relative to the benchmark.

Likewise, Asia ex-Japan funds have a 14% allocation to India, a 4.6 percentage point overweight position relative to the benchmark. Kotak’s analysts point out, based on Securities and Exchange Board of India data, that sovereign wealth funds now account for 11% of total assets held by foreign portfolio investors in India, compared to 8% a year ago.

Gross refining margin rebounds in September

Reuters’s Singapore gross refining margin (GRM), a profitability measure for refining companies, has rebounded this month.

Average GRM for September (15 days) is $5.9 a barrel, compared to $3.9 a barrel in August. According to Antique Stock Broking Ltd, production is expected to be lower in the December quarter on account of autumn maintenance and would likely lag demand growth.

“Early signs of the same are already visible as Petrol, Diesel, Kerosene spreads improved in Sep’16 till date to $13.2 a barrel (Aug: $9.4 a barrel), $10.2 per barrel (Aug $9.1 per barrel), $10.5 per barrel (Aug $9.2 per barrel), improving the overall GRM in September,” Antique wrote in a note to clients.

Venezuela: oil supplies need to decline by 10%

Oil prices fell on Tuesday after Venezuela said that global supplies needed to fall by 10% in order to bring production down to consumption levels, says Reuters.

“Global production is at 94 million barrels per day, of which we need to go down 9 million barrels per day to sustain the level of consumption,” Venezuela’s oil minister Eulogio Del Pino said in an interview with state oil company PDVSA’s internal TV station.

The statements came the same day as credit ratings agency Standard and Poor’s said that a proposed bond swap by PDVSA was a “distressed exchange” that would be “tantamount to default” if completed, a blow to the cash-strapped firm’s effort to seek a financial lifeline.

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