Principal AMC ceases to exist as an Mutual Fund: Sebi Principal Mutual Fund (Principal AMC) will cease to exist as a mutual fund from June 2, capital markets regulator Sebi announced on Thursday. The AMC had informed the markets regulator that it wants to surrender the registration granted by the regulator. “Sebi has accepted the request for surrender of certificate of registration of PMF. Consequently, PMF ceases to exist as a mutual fund w.e.f. June 2, 2022,” said Sebi in a statement. In January 2021, Principal AMC, managing assets worth more than 9,500 crore, was acquired by Sundaram Mutual Fund for338.53 crore for 100% of the share capital of the AMC, Principal Trustee Company, and Principal Retirement Advisors. The schemes managed by Principal Asset Management will be acquired by Sundaram MF. The deal received the required regulatory approvals from the Competition Commission of India (CCI) and from Sebi in November 2021. According to Sebi, Principal MF will continue to be liable for all liabilities/obligations, including monetary penalties, if any, for violations, if any, of the provisions of Sebi Act and MF regulations that have taken place before its surrender of certificate of registration.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.