NEW DELHI: A stable government at the Centre has had a direct impact on the bond markets as mutual funds pumped in a whopping over Rs 23,000 crore in the bond market in September, taking the total investment to close to Rs 5 lakh crore since the beginning of the year.
In comparison, foreign investors made a net inflow of a staggering 1.19 lakh crore so far in 2014. The latest inflows take the total net investment by MFs stocks to Rs 8,000 crore so far this year.
The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills,
According to the latest data compiled by market regulator Sebi, the net investment MFs in the debt market during September were Rs 23,416 crore. This takes the total investment by MFs into the bond market to Rs 4,89,467 crore so far this year.
In 2013, mutual funds had invested a net of Rs 5.12 lakh crore in the bond market.
Sector experts attributed the inflows in debt market to the NDA government’s reforms agenda, improved fundamentals of the Indian economy and high interest rates.
Mutual funds collect money from investors and buy stocks, including IPOs (primary market) and bonds.
Moreover, MFs picked up shares to the tune of around Rs 4,200 crore in the equity market last month, making it the fifth consecutive monthly inflow.
MFs have turned net buyers of equities since May 2014. Prior to that, fund houses have been net sellers in the equity market since September last year, while they were net buyers of shares to the tune of Rs 1,607 crore in August 2013.