Weekly Market Review - US election results, a brand new MF category is born, & more.
-Weekly Market Review-
Sensex: 41,893.06 ▲ 5.75%
Nifty: 12,263.55 ▲ 5.34%
The election results started coming in from Wednesday. The results of the US elections is something many across the world want to know.
Reason? The US is the largest economy in the world.
It has an immense amount of trades with all major nations. And it exerts a phenomenal amount of power all over the globe.
The current president, Donal Trump, is famous for his trade war with China among other things. Another thing that Trump is famous for is his anti-immigration stance. Both of these affect the functioning of many companies and economies.
Uncertainty is something businesses do not enjoy. So, before the US elections, many were nervous.
Starting Wednesday, numbers started coming in and Joe Biden, the candidate standing against Donal Trump was leading.
And who won? So far, nobody has won. The counting is still on.
Surprising, but that is the case. This year, counting is taking much longer than the previous elections. In the US, voters can either vote at the polling booth/station or, they can use the mail-in option. The mail-in option allows voters to vote from home using the postal service.
Every year, the number of voters using the mail-in option was much lower. This year, thanks to the pandemic, a staggering number of Americans have used the mail-in option. Counting votes at the polling booth is very quick. Counting mail-in votes takes a lot of time. And this is why the results are taking so long. As of writing this, this is what the counting looks like:
Joe Biden: 264
Donald Trump: 214
These numbers are from the Associated Press. Whoever reaches the 270 mark wins. Many US media houses have assumed Joe Biden will win. Joe Biden himself has appeared in front of the public expressing confidence.
Counting continues. It is expected to finish this weekend.
Sebi Introduces Flexi-Cap Mutual Fund Subcategory
Sebi has introduced a new equity mutual fund subcategory called Flexi-cap mutual funds. This new subcategory will have to stick to one rule: invest more than 65% of its assets in equity.
That’s it. This is very similar to the existing multi-cap fund subcategory.
So why was it introduced in the first place?
Recently, Sebi introduced a new rule. Multi-cap funds must invest at least 25% of their assets in large-cap, 25% in mid-cap, and 25% in small-cap stocks. Till this rule was introduced, most multi-cap funds invested most of their assets in large-cap stocks, a small portion in mid-cap stocks, and an even smaller portion in small-cap stocks. The new rule by Sebi meant that multi-cap funds would have to make major changes to their holding pattern.
According to Sebi, multi-cap funds should invest evenly across large, mid, and small-cap stocks as that is the true definition of “multi-cap”. Flexi-cap funds will be truly flexible and will not have any holding restrictions apart from the rule that at least 65% of the assets must be invested inequities.
Many fund managers had voiced their opinion against this move. They had said, there weren’t enough good mid and small-cap companies to invest in. It is expected that most multi-cap funds will simply recategorize themselves as Flexi-cap instead of making major changes to their holdings to become compliant with the definition of a multi-cap fund.
NAV Cut-off Timings Being Restored
Mutual fund NAV cut-off timings are being restored to 3 pm again. Recently, the NAV cut-off timing for equity mutual funds was restored to 3 pm. This did not include debt funds.
Now, they are being included too. With this announcement, cut-off timing for all mutual funds is being restored to what they used to be before the pandemic struck. The actual timing varies from platform to platform.
More News in Numbers
- 6 Nov: Date from which WhatsApp Pay (using UPI) went live in India.
- Rs 9,555 crores: Saudi Arabia’s public investment fund invested this amount in Reliance Retail.
- 264 vs 214: Joe Biden is leading the US presidential race with 264 seats while Donald Trump has 214 seats.
- 3 pm: The mutual funds NAV cut-off timing is being restored to this from 9th Nov.
Gland Pharma IPO
This is India’s largest pharma IPO to date. Gland Pharma is one of the largest and fastest-growing injectable-focused companies in the USA. It is based out of Hyderabad.
The IPO subscription starts on 9th Nov and ends on 11th Nov.
Markets this week
All percentages above are weekly ups/downs.
HAPPY INVESTING!
SEE YOU TOMORROW
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