Household savings in India likely increased in FY24 after hitting their lowest level in FY23, according to a Crisil report. This rise in savings helped finance growing investments in the economy, with total domestic savings estimated to have grown stronger than the 10.7% increase seen in the previous fiscal year.
The current account deficit is expected to have narrowed to around 1% of GDP in FY24. High-frequency data indicated a rise in household savings, with bank deposits growing by 13.5% compared to 9.6% in the previous year. Mutual fund investments also rose, with net inflows reaching â‚ą2 lakh crore in FY24, up from â‚ą1.55 lakh crore in FY23. However, the growth of bank credit slowed during this period.
Bitcoin trading during US market hours has reached an all-time high, accounting for 46% of this year’s cumulative volume through April, according to Kaiko Research. This increase is linked to the January launch of spot-Bitcoin exchange traded funds (ETFs), which have enhanced price discovery and arbitrage trading due to their net asset value calculations at the close of US stock exchanges.
Thursdays see the highest trading activity, with nearly 15% of daily volume. The ETFs have attracted almost $13 billion in net inflows since their launch, though demand has recently slowed, with $925 million inflows in May.
SEBI has revised the computation of market capitalization for listed companies under its LODR regulations. Instead of using a single day’s market cap on March 31, SEBI will now use an average market capitalization over six months, from July 1 to December 31, with December 31 as the cut-off date.
This change impacts ten LODR provisions related to market capitalization, such as the appointment of an independent woman director, board size, quorum for meetings, and others.
The new method aims to provide a more accurate reflection of a company’s market size by mitigating daily fluctuations. The adjustment is based on recommendations from a SEBI expert committee to facilitate easier business operations.
In April, net SIP inflows into mutual funds decreased by 5% to ₹8,660 crore from ₹9,109 crore in March, as investors paused monthly remittances due to high valuations and election uncertainties. Despite a record SIP inflow of ₹20,371 crore, the net-to-gross SIP inflow ratio dropped to 43% from March’s 47%.
Investors remain cautious but are not abandoning SIPs, with new accounts and SIP discontinuances both rising. The SIP discontinuance ratio was stable at 52%, with two new SIPs added for every one closed.
Foreign Portfolio Investors (FPIs) have been selling due to market unease, influenced by low voter turnout, while Indian institutions and domestic investors continue to invest.
The market cap of companies listed on the BSE has surpassed $5 trillion, highlighting concerns over high valuations. The number of companies trading at over 50 times their forward P/E multiples has surged to 104.
The Nifty Midcap 100 is trading at a 39% premium to the Nifty 50, and the MSCI India Index has outperformed the MSCI EM Index, increasing India’s valuation premium over emerging markets. India’s market cap to GDP ratio is now 132%, above the long-term average of 85%.
Sebi issued new guidelines on May 21 to manage the impact of market rumours on stock prices, particularly for acquisitions. Starting June 1, 2024, these regulations will apply to the top 100 listed companies, and to the next 150 companies from December 2024.
The guidelines require listed entities to verify market rumours following significant price movements and use the unaffected price—what the share price would have been without the rumour—for transactions where Sebi or stock exchange pricing norms apply.
The unaffected price will be determined using the adjusted volume weighted average price (VWAP), with confirmation of rumours required within 24 hours of the price movement trigger.