20th Feb 2023 News

1. Weekly
News
20th Feb, 2023
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SEBI Registered Investment Adviser (INA200006628)

2. Snapshot
Inflation Breaches RBI
Tolerance
Rationalization of Total
Expense Ratio (TER)
Backstop Fund for
Corporate Debt Market
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SEBI Registered Investment Adviser (INA200006628)
Weekly Market News
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Other News

3. Weekly Market News
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SEBI Registered Investment Adviser (INA200006628)
Index % Change
(Last week)
% Change
(yearly)
Nifty 50 1.05% 3.94%
Nifty Midcap 150 0.29% 6.56%
Nifty Small Cap 250 0.29% -1.43%
Nifty IT 0.60% 3.34%
Nifty Bank -0.37% 9.39%
Nasdaq 100 0.01% -10.90%
S&P 500 -0.43% -5.24%
Dow Jones -0.18% 0.68%
Nifty Pharma -1.66% -7.66%

4. Inflation Breaches RBI Tolerance
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
 Retail inflation in January accelerated to the fastest in three months, exceeding the Reserve Bank of
India’s upper tolerance band of 6%.
 Inflation based on the consumer price index (CPI) hardened to 6.52% in January, after declining to a
one-year low level of 5.72% in December.
 The unexpected surge in headline inflation, led by a spike in food prices, has raised the likelihood of
further tightening of monetary policy in April, with economists estimating inflation to remain over the
6% mark over the coming months due to sticky core inflation.
 Core inflation, which excludes volatile components such as food and energy prices, remained over
the 6% mark, touching a multi-year high of 6.2% in January.

5. Rationalization of Total Expense Ratio (TER)
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
• Securities and Exchange Board of India (SEBI) has directed mutual fund industry players to incorporate
Goods and Services Tax (GST) and transaction costs to the Total Expense Ratio (TER) of mutual funds.
• Currently, the 12 percent GST and the transaction cost levied by distributors on investments are not
included in the purview of the TER of the mutual funds.
• This rationalization of TER may impact distribution margin of MFs but will be cost effective to Mutual Fund
investors.

6. Backstop Fund for Corporate Debt Market
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SEBI Registered Investment Adviser (INA200006628)
• India is setting up a fund worth Rs 33,000 crore ($4 billion) to provide liquidity to its
corporate debt market during bouts of stress, to help stem panic selling and ease
redemption pressures.
• Asset managers would contribute 10% of the fund.
• SBI Mutual Fund, a unit of India's largest state-owned lender, State Bank of India,
has been tasked with administrating the backstop fund.
• This fund is being created to avoid situation of credit event where there is a run on
the funds for redemption which in turn creates pressure on liquidity.
• During times of stress, the backstop fund could step into the market to buy
relatively illiquid investment grade bonds.
• The need for a buyer and seller of last resort for corporate bonds was highlighted
by Franklin Templeton India's move to stop redemptions from six debt funds in April
2020 as investors withdrew money and the fund house was unable to sell debt
investments in the market.

7. Other News
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
• FPIs turned net buyers last week with an investment of over Rs 7,600 crore against net
outflows of Rs 3,920 crore in the preceding week (From February 7-12).
• With an aim to bring in transparency, capital markets regulator Sebi mandated all stock
brokers and depositories to maintain websites.
• Turkey and Syria faces series of Earthquake.
• New Zealand declared state of Emergency because of Cyclone Gabrielle.
• Discovery of Lithium reserve in J&K.
• Bengaluru ranks world’s second-most slowest city, London leads

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