inflows into New Fund Offers (NFO) are forcing domestic
mutual funds to buy aggressively in the equity markets
even when the indices are at record highs. After reporting
net sales for the last 3 months, mutual funds have made
net purchases of Rs2,062 crore so far in March 2006
according to the latest data from SEBI.
funds had made net sales of Rs1,377 crore, Rs1,172 crore
and Rs246 crore for the months of December 2005, January
2006 and February 2006 respectively.
activity of mutual funds has also increased considerably,
which indicates more portfolio churning. Gross purchases
till 16 March have already crossed Rs8,000 crore as
against a full month average of around Rs9,000 crore
for the previous 3 months. Gross sales for the first
half of the month has crossed Rs6,000 crore against
full month average of around Rs10,000 crore for the
last three months.
the period April 1, 2005 to March 16, 2006, domestic
mutual funds have made net purchases of Rs11,888 crore.
have made net purchases of Rs3,871 crore or $873 million
so far this month in the equity market. Total net inflows
from FII's so far this calendar year is at Rs15,137
crore or $3.37 billion.