Mutual Fund News of 28 May 2021 – Nippon India Mutual Fund

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NEWS U CAN USE

May 28, 2021

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The Week that was…

May to 28

May

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Indian Economy

• Government data showed that India’s Foreign Direct Investment (FDI) equity inflows

during the period from Apr 2020 to Mar 2021 stood at $59.64 billion which corresponds to

a growth of 19%. U.S. replaced Mauritius as the second largest source of FDI into India

during FY21 with inflows of $13.82 billion. Singapore was the top source of FDI equity into

the country for the third consecutive fiscal at $17.42 billion.

• Government data showed that around 12.24 lakh new members joined the Employees'

State Insurance (ESIC)-run social security scheme in Mar 2021, as against 11.77 lakh in the

previous month. The net new enrolments with retirement fund body Employees'

Provident Fund Organization (EPFO) stood at 11.21 lakh in Mar 2021, down from 11.28

lakh in Feb 2021. During the period from Sep 2017 to Mar 2021, 4,99,52,464 new

subscribers joined the ESI scheme while during the same month, around 4.2 crore (gross)

new subscribers joined the EPFO scheme.

• According to the Ministry of Finance, the assets under management under Pension Fund

Regulatory and Development Authority (PFRDA) surpassed Rs. 6 lakh crore (Rs. 6 trillion)

of Assets Under Management (AUM) under the National Pension System (NPS) and Atal

Pension Yojana (APY), after 13 years. The AUM growth of last Rs. 1 trillion was achieved in

just 7 months. As of May 21, 2021, the total number of subscribers under NPS and APY has

surpassed 4.28 crore.

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Domestic Equity Market Indices

Indices

-May-

1 Week Return

YTD Return

S&P BSE Sensex

51,422.88

1.75% 7.69%

Nifty 50

15,435.65

1.72% 10.40%

S&P BSE Mid

-Cap

21,661.83

0.82% 20.74%

S&P BSE Small

-Cap

23,478.69

1.51% 29.73%

Source: MFI Explorer

NSE Advance/Decline Ratio

Date Advances Declines

Advance/Decline Ratio

24-May-21 1,202 796 1.51

25-May-21 1,030 950 1.08

26-May-21 1,244 737 1.69

27-May-21 1,037 922 1.12

28-May-21 774 1,207 0.64

Source: NSE

• Indian equity markets settled for the

week in the green with Nifty 50 touching

record highs on the last trading session of

the week. Buying interest was largely led

by steady decline of daily COVID-19 cases

in India. The consistent fall in coronavirus

cases raised optimism over gradual re-

opening of economy, though there are

restrictions in selected local areas to

control the spread of virus.

• Optimism over next set of government

stimulus measures to minimise the

economic impact of the second wave

coupled with declining COVID cases

buoyed market sentiments.

• Global cues also provided additional

support as a host of central bank

policymakers across the world pledged to

keep monetary policy loose despite

recent signs rise in global inflation.

Ratios

S&P BSE

Sensex

Nifty 50

S&P BSE

Mid Cap

S&P BSE

Small Cap

P/E

31.90 28.98 49.27 55.14

P/B

3.29 4.42 3.10 3.08

Dividend Yield

0.85 0.98 0.94 0.83

Source: BSE, NSE Va

lue as on May 28, 2021

Indian Equity Market

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Sectoral Indices

Indices

Last

Closing*

Returns (in %)

1-Wk 1-Mth

S&P BSE Auto

23,572.40

1.75% 6.07%

S&P BSE Bankex

39,863.48

1.47% 4.15%

S&P BSE CD

33,160.49

1.46% 1.34%

S&P BSE CG

22,476.90

1.81% 9.43%

S&P BSE FMCG

12,995.72

0.41% 2.57%

S&P BSE HC

24,417.44

-0.23% 4.70%

S&P BSE IT

27,627.31

3.38% 4.07%

S&P BSE Metal

18,461.48

-0.97% 9.08%

S&P BSE Oil & Gas

16,251.09

2.84% 10.16%

Source:

Refinitiv *Value as on May 28, 2021

• On the BSE sectoral front, majority of the

indices closed in the green. S&P BSE Realty

was the top gainer, up 3.69%, followed by S&P

BSE IT and S&P BSE Teck, which rose 3.38%

and 2.86%, respectively. Real estate stocks

rallied on hopes of an increase in demand for

completed products and expectations of

robust revenue collection in 2021.

• Meanwhile, S&P BSE Power, S&P BSE Metal

and S&P BSE Healthcare were the only losers

down, 1.50%, 0.97% and 0.23%, respectively.

Indian Derivatives Market Review

• Nifty Jun 2021 Futures stood at 15,463.85, a premium of 28.20 points above the spot

closing of 15,435.65. The total turnover on NSE’s Futures and Options segment for the

week stood at Rs. 226.66 lakh crore as against Rs. 222.49 lakh crore for the week to May 21.

• The Put-Call ratio stood at 0.85 compared with the previous week’s close of 0.70.

• The Nifty Put-Call ratio stood at 1.32 compared with the previous week’s close of 1.38.

Indian Equity Market (contd.)

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Debt Indicators

(%)

Current

Value

Ago

Mth

Ago

Mth

Ago

Call Rate

3.14 3.14 3.22 3.13

91 Day T

-Bill

3.41 3.39 3.33 2.93

05.22% 2025, (5

Yr GOI)

5.32 5.32 5.38 5.08

05.85% 2030, (10 Yr GOI)

6.00 5.98 6.05 --

Source:

Refinitiv Value as on May 28, 2021

• Bond yields rose amid concerns that the

central government may raise its market

borrowing to bridge a shortfall in

compensation to states.

• Losses increased as the Reserve Bank of

India (RBI) at the weekly auction of

government securities devolved more than

half of the scheduled amount of 10 year

benchmark paper on primary dealers.

• Yield on the 10-year benchmark paper

(5.85% GS 2030) rose 2 bps to close at

6.00% as compared to the previous week’s

close of 5.98% after moving in a narrow

range of 5.97% to 6.00%.

• According to the RBI’s scheduled banks’

statement of position in India, bank credit

grew 6.02% while bank deposits grew

9.87% as on May 07, 2021.

Domestic Debt Market

5.92

5.97

6.02

24-May 25-May 27-May 28-May

Yield in %

10 -Yr Benchmark Bond ( % )

Source: CCIL

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Maturity

G-

Sec Yield

(%)

Corporate Yield

(%)

Spread

bps

1 Year 3.85 4.62 77

3 Year 4.74 5.08 34

5 Year 5.62 6.30 67

10 Year 6.09 7.11 102

Source:

Refinitiv

Value as on

May 28, 2021

• Yields on gilt securities rose by up to 7 bps on

3-, 10- to 15-year and 30-year papers while 1-,

2-, 4- & 5-year papers fell by up to 4 bps. Yield

on remaining securities were unchanged.

• Corporate bond yields rose in the range of 4

to 17 bps across the curve, except 15-year

paper that fell 3 bps. Yield rose the most on

8-year paper.

• Spread between AAA corporate bond and gilt

expanded in the range of 5 to 20 bps across

segments, leaving 15-year paper that

contracted 7 bps.

Domestic Debt Market (Spread Analysis)

2.60

4.90

7.20

3 Mths 6 Mths 1 Yr 5 Yrs 10 Yrs 20 Yrs 30 Yrs

India Yield Curve Shift (%) (W-o-W)

Change in bps 28-May-21 21-May-21

Yield

in %

Change

in bps

Source: Refinitiv

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• The Goods and Services Tax Council (GST) kept tax on COVID-19 vaccines and medical

supplies unchanged. However, the council exempted duty on import of a medicine used for

treatment of black fungus. The GST council also to provide relief to small tax players

recommended an Amnesty Scheme to reduce late fee payable. The move is expected to

provide relief to small tax players who constitute 89% of GST players.

• According to media reports, capital market regulator Securities and Exchange Board of India

(SEBI) is considering introducing the concept of institutional investor-only initial public

offerings (IPOs). The objective of the move is to protect small investors from taking risky

presumably risky issues by new-age technology and e-commerce firms.

• According to media reports, Capital market regulator SEBI is considering appointing auditors

for conducting forensic audits of financial statements of listed companies. The objective of

the move is to put a check on frauds.

• According to media reports, the Central Government has proposed market borrowing to the

tune of Rs 1.58 trillion. The objective of the move is to compensate states for the goods and

services tax shortfall through back-to-back loans like it did last year.

• The Government of India released Rs. 1,605 Crore to 8 North Eastern States for the

implementation of Jal Jeevan Mission. This is the first tranche of the four to be released in

this fiscal. The objective of the move is to provide tap water supply to rural homes in FY22.

Regulatory Updates in India

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• India and Israel signed a three-year work program agreement for development in

Agriculture cooperation as both the countries recognized the importance of agriculture

and water sectors in the bilateral relationship. Both the countries will implement the

“INDO-ISRAEL Villages of Excellence” which is a new concept aimed at creating a model

ecosystem in agriculture across eight states, alongside 13 Centers of Excellence within 75

villages.

• The Ministry of Power has decided to set up a National Mission on use of Biomass in coal

based thermal power plants. The objective of the move is to move towards cleaner energy

sources and provide support to the energy transition in the country.

• According to media reports, the government has notified rules pertaining to amended

insurance laws that seek to raise foreign direct investment (FDI) limit in the insurance

sector from 49% to 74%. As per the gazatte notification, these rules are called the Indian

Insurance Companies (Foreign Investment) Amendment Rules, 2021. It stated that the

total foreign investment in an Indian insurance company shall mean the sum total of direct

and indirect foreign investment by foreign investors in such company, calculated in such

manner as is specified in regulations made by the Authority (IRDAI) with regard to

registration of Indian insurance companies.

Regulatory Updates in India (contd..)

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• Data from the U.S. Commerce Department showed that the growth of the U.S. economy

stood unrevised in the first quarter of 2021. The real gross domestic product rose 6.4% in

the first quarter of 2021, unchanged from the estimate provided in the previous month.

• Data from the U.S. Commerce Department showed that the growth of the U.S. economy

stood unrevised in the first quarter of 2021. The real gross domestic product rose 6.4% in

the first quarter of 2021, unchanged from the estimate provided in the previous month.

• Survey data from the ifo Institute showed that Germany's business sentiment

strengthened to a two-year high in May 2021. The business confidence index rose to 99.2

in May 2021 from 96.6 in the previous month. This was the highest value since May 2019.

• According to the market research group GfK, Germany’s forward-looking consumer

confidence index rose to -7.0 in Jun 2021 from revised -8.6 in May 2021.

• The government of Japan downgraded its economic assessment and attributed it to the

impact of the coronavirus pandemic on consumer spending and business conditions. The

report further added that business investment is picking up and exports are increasing

moderately.

• According to the Ministry of Communications and Internal Affairs, Japan’s unemployment

rate came in at 2.8% in Apr 2021, up from 2.6% in Mar 2021. The job-to-applicant ratio was

1.09 in Apr as against 1.10 in Mar.

Global News/Economy

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Global Indices

Indices

28-May-21

1-Week

Return

YTD

Return

Russell 3000

2,066.49 1.68% 5.83%

Nasdaq 100

13,686.51 2.05% 6.19%

FTSE 100

7,022.61 0.06% 8.70%

DAX Index

15,519.98 0.53% 13.13%

Nikkei Average

29,149.41 2.94% 6.21%

Straits Times

3,178.55 1.95% 11.77%

Source: Refinitiv

Value as on May 28,

2021

U.S.

• U.S. markets traded higher, reflecting

continued optimism over the re-

opening of the economy following the

coronavirus pandemic. Meanwhile, U.S.

weekly jobless claims data once again

fell to a new pandemic-era low.

Technology stocks also rose benefitted

from a rebound in value of bitcoins.

Europe

• European markets rose amid rising optimism about global economic recovery after data

showed another drop in U.S. weekly jobless claims. Investors also digested a slew of

economic data and earnings announcements from the euro area.

Asia

• Asian markets largely closed in the green with strong buying seen in Japanese bourses

amid hopes that a steady vaccination drive can help accelerate economic recovery. Buying

interest found additional support from reports that U.S. will reveal a budget that would

increase federal spending to $6 trillion in 2022.

Global Equity Markets

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• Yields on the 10-year U.S. Treasury fell 4

bps to close at 1.59%, from the previous

week’s close of 1.63%.

• U.S. Treasury prices rose after a few U.S.

Federal Reserve (Fed) officials affirmed

their support to keep monetary policy

accommodative for some time.

• Treasury prices rose further following

strong auction of 2-year notes.

• However, gains trimmed amid a recovery

in risk appetite following rise in equity

market.

• Upside was limited, bolstered by a news

report that stated the U.S. President will

announce $6 trillion budget for 2022,

which is the largest spending since the

second world war, fueling supply

concerns.

Global Debt (U.S.)

1.55

1.59

1.63

24-May 25-May 26-May 27-May 28-May

US 10-Year Treasury Yield Movement

Source: Refinitiv

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Performance of various commodities

Commodities

Last Closing*

1-Week Ago

Brent Crude($/Barrel)

70.23 67.74

Gold ($/Oz)

1902.64 1880.30

Gold (Rs/10 gm)

48541 47569

Silver ($/Oz)

27.88 27.52

Silver (Rs/Kg)

70611 69875

Source: Refinitiv *

Value as on May 28,

2021

Gold

• Gold prices initially inched up amid weaker

greenback and lower U.S. Treasury yields.

However, gains were erased to some extent

after initial jobless claims in U.S. fell for the

week ended May 22, 2021.

Brent Crude

• Brent crude prices rose supported by strong

U.S. economic data that neutralised

investors’ concerns about the potential for a

rise in Iranian supplies. Additionally, fall in

U.S. crude stockpiles reinforced

expectations of improving demand ahead of

the peak summer season.

Baltic Dry Index

• The index fell during the week due to

sluggish capesize and panamax activities.

Commodities Market

9.20

9.60

10.00

10.40

10.80

11.20

28-Apr-21 13-May-21 28-May-21

Global Commodity Movement

Gold Spot ($/Oz) Silver Spot ($/Oz) Brent ($/bbl)

Global

Commodity Prices

Rebased to 10

Source: Refinitiv

1.31%

3.68%

1.19%

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

Movement of Rupee vs Other Currencies

Currency

Last Closing*

1-Wk Ago

US Dollar

72.48 73.02

Pound Sterling

102.77 103.61

EURO

88.23 89.31

100 Yen

65.96 67.14

Source: Refinitiv Figures in INR , *

Value as on May 28,

2021

Rupee

• The Indian rupee gained against the U.S. dollar

following gains in the Chinese yuan. Gains

increased on decline in the greenback index on

increasing expectations that the U.S. Federal

Reserve may delay tapering its bond purchases.

Euro

• Euro fell against the U.S. dollar as U.S. yields

held steady but losses were limited on U.S. Fed

arguments for easy monetary policy despite

current inflationary forces.

Pound

• Sterling rose against the U.S. dollar after a Bank

of England policymaker said the central bank

was likely to raise rates well into next year if the

economy rebounds more quickly than

expected.

Yen

• Yen fell against the U.S. dollar despite U.S.

yields held steady.

Currencies Markets

9.40

9.60

9.80

10.00

10.20

28-Apr-21 13-May-21 28-May-21

USD GBP Euro JPY

Source: Refinitiv

Currency

Prices (

in terms of INR)

Rebased to 10

Currency Movement

-1.21%

-0.75%

-0.81%

-1.76%

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

The Week that was…

May to 28

May

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The Week that was (May 24 – May 28)

Date Events

Present

Value

Monday,

May 24, 2021

• U.S. Chicago Fed National Activity Index (Apr)

0.24 1.71

Tuesday,

May 25, 2021

• Germany Gross Domestic Product (QoQ) (Q1)

-1.80% -1.70%

• U.S. Housing Price Index (MoM)(Mar)

1.40% 1.10%

• Germany IFO

– Business Climate (May) 99.2 96.6

• U.S. New Home Sales (MoM)(Apr)

0.863M 0.917M

Wednesday,

May 26, 2021

• Japan Leading Economic Index (Mar)

102.5 98.9

• U.S. MBA Mortgage Applications (May 21)

-4.20% 1.20%

Thursday

May 27, 2021

• U.S. Durable Goods Orders (Apr)

-1.30% 1.30%

• U.S. Gross Domestic Product Annualized(Q1) PREL

6.40% 6.40%

• Germany Gfk Consumer Confidence Survey (Jun)

-7.0 -8.6

• U.S. Pending Home Sales (MoM)(Apr)

-4.40% 1.70%

• Japan Unemployment Rate (Apr)

2.80% 2.60%

Friday,

May 28, 2021

• U.S. Michigan Consumer Sentiment Index (May)

82.9 82.8

• U.S. Core Personal Consumption Expenditure

- Price Index (YoY) (

Apr)

3.10% 1.90%

• U.S. Personal Spending (Apr)

0.50% 4.70%

• Germany Import Price Index (YoY)(Apr)

10.30% 6.90%

• Eurozone Consumer Confidence (May)

-5.1 -8.1

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

The Week Ahead

May to 04

Jun

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Day Event

Monday,

May 24, 2021

•

Bank of Japan Governor Speech

•

U.S. Chicago Fed National Activity Index (Apr)

Tuesday,

May 25, 2021

•

Germany Gross Domestic Product (YoY) (Q1)

•

Germany IFO – Business Climate (May)

•

U.S. Housing Price Index (MoM) (Mar)

•

U.S. Consumer Confidence (May)

Wednesday,

May 26, 2021

•

Japan Leading Economic Index (Mar)

•

Japan Coincident Index (Mar)

Thursday,

May 27, 2021

•

U.S. Coincident Index (Mar)

•

U.S. Gross Domestic Product Annualized (Q1) PREL

•

U.S. Pending Home Sales (MoM) (Apr)

•

Japan Unemployment Rate (Apr)

Friday,

May 28, 2021

•

U.S. Michigan Consumer Sentiment Index (May)

•

U.S. Personal Spending (Apr)

•

U.S. Core Personal Consumption Expenditure - Price Index (MoM) (Apr)

•

Eurozone Consumer Confidence (May)

The Week Ahead

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The information herein is meant only for general reading purposes and contains all factual and statistical information pertaining to Industry and

markets which have been obtained from independent third party sources and which are deemed to be reliable. The information provided cannot be

considered as guidelines, recommendations or as a professional guide for the readers. It may be noted that since Nippon Life India Asset

Management Limited (NAM India) has not independently verified the accuracy or authenticity of such information or data, or for that matter the

reasonableness of the assumptions upon which such data and information has been processed or arrive data; NAM India does not in any manner

assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAM

India’s views or opinions, which in turn may have been formed on the basis of such data or information. The Sponsor(s), the Investment Manager, the

Trustee or any of their respective directors, employees, associates or representatives do not assume any responsibility for, or warrant the accuracy,

completeness, adequacy and reliability of such data or information. Whilst no action has been solicited based upon the information provided herein,

due care has been taken to ensure that the facts are accurate and opinions given are fair and reasonable, to the extent possible. This information is

not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely

on information/data arising out of their own investigations. Before making any investments, the readers are advised to seek independent

professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor(s), the Investment Manager, the

Trustee, their respective directors, employees, associates or representatives shall be liable in any way for any direct, indirect, special, incidental,

consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

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