Mutual funds halt fresh investments in gold FoFs amid rupee pressure
.webp)
Mutual funds have stopped accepting fresh investments in their gold fund of funds (FoFs) from Friday. The restrictions, which mutual fund (MF) officials said were imposed on the instructions of the Securities and Exchange Board of India (Sebi), come amid concerns over the current account deficit and continued pressure on the rupee.
Gold is among India’s largest import items by value.
Late on Thursday, fund houses issued notices stating that lump-sum investments, along with new systematic investment plan (SIP), systematic transfer plan (STP) and switch registrations, would be discontinued from Friday. Existing SIP, STP and switch transactions will continue.
Some fund houses have announced similar restrictions on silver FoF investments.
However, gold exchange-traded funds (ETFs) and silver ETFs remain open for investments. According to industry officials, the restrictions on FoFs are likely to have some impact on overall gold and silver inflows, as FoFs are the preferred investment channel for retail investors, especially those investing through distributors. FoF investments are easier because, unlike ETFs, they do not require demat accounts.
In June, fund houses had placed similar restrictions on FoFs and new unit creation in ETFs, citing prevailing economic and market conditions. The restrictions came amid a sharp depreciation in the rupee and calls from the Prime Minister to reduce gold investments. Most fund houses lifted the restrictions in the following months.
Other Latest News
.webp)
Billionaire Mukesh Ambani is looking to activate the vast workforce of Reliance Industries Ltd. to drum up interest in the blockbuster initial public offering of his empire’s telecom and digital services arm Jio Platforms Ltd., even bringing forward some salaries to give employees access to investable cash.
.webp)
India wants to promote trade settlements in rupee to help partner countries facing a shortage of hard currencies so that they continue importing essential goods, Finance Minister Nirmala Sitharaman said on Friday.
When countries struggling to access hard currencies often face difficulties in maintaining trade despite their need to import goods, and local currency settlements could help address the problem.
.webp)
The Indian economy is expected to grow by 7.1-7.3 per cent in the current fiscal, with a sustained revival in private investment providing an additional source of demand, Deloitte India said on Friday.
However, geopolitical tensions, volatile energy prices and trade disruptions pose risks to the growth outlook, it added.
.webp)
Reliance Industries on Friday said it has never feared competition and that India's regulatory framework treats domestic and foreign companies equally, responding to recent criticism by billionaire Elon Musk over delays in the launch of his satellite internet service, Starlink, in the country.
"In light of recent remarks about Reliance and the Indian market, we wish to place the facts on record," the company said in a statement.
.webp)
Capital market regulator Securities and Exchange Board of India (Sebi) has revised the Closing Auction Session (CAS) framework, addressing key concerns surrounding the derivatives settlement. The regulator has changed trading timings and the methodology for determining settlement prices of stock and index derivatives contracts.
Following the move, Jefferies in a note said that the decision to change the methodology for calculating settlement prices of index derivatives on expiry days to the volume-weighted average price (VWAP) is a bigger positive for brokers versus exchanges.
.webp)
.webp)
.webp)
.webp)
.webp)
