Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
MOSt Focused Dynamic Equity - Direct Plan – Annually Dividend - 12.0577MOSt Focused Dynamic Equity - Direct Plan – Quarterly Dividend - 12.1441MOSt Focused Dynamic Equity - Regular Plan – Annually Dividend - 11.8648MOSt Focused Dynamic Equity - Regular Plan – Quarterly Dividend - 11.9218MOSt Focused 25 Fund- Direct Plan (D) - 19.9042MOSt Focused 25 Fund- Direct Plan (G) - 23.6535MOSt Focused 25 Fund-(D) - 18.5348MOSt Focused 25 Fund-(G) - 22.1333MOSt Focused Long Term (D) - 17.7719MOSt Focused Long Term (G) - 18.4005MOSt Focused Long Term- Direct Plan(D) - 18.558MOSt Focused Long Term- Direct Plan(G) - 19.1937MOSt Focused Midcap 30- Direct Plan(D) - 25.0224MOSt Focused Midcap 30- Direct Plan(G) - 28.4678MOSt Focused Midcap 30(D) - 23.7621MOSt Focused Midcap 30(G) - 27.111MOSt Focused Multicap 35- Direct Plan(D) - 28.2914MOSt Focused Multicap 35- Direct Plan(G) - 28.6402MOSt Focused Multicap 35(D) - 27.2712MOSt Focused Multicap 35(G) - 27.6188MOSt Ultra Short Term Bond Fund-Direct Plan-Fortnightly Dividend Option - 10.0048MOSt Ultra Short Term Bond Fund-Direct Plan-Monthly Dividend Option - 10.0199MOSt Ultra Short Term Bond Fund-Direct Plan-Quarterly Dividend Option - 10.0407MOSt Ultra Short Term Bond Fund-Direct Plan-Weekly Dividend Option - 10.0075MOSt Ultra Short Term Bond Fund-Regular Plan-Fortnightly Dividend Option - 10.0023MOSt Ultra Short Term Bond Fund-Direct Plan- Growth - 13.5785MOSt Ultra Short Term Bond Fund-Direct Plan-Daily Dividend Option - 10.0008MOSt Ultra Short Term Bond Fund-Regular Plan- Growth - 13.2471MOSt Ultra Short Term Bond Fund-Regular Plan-Daily Dividend Option - 10.0109MOSt Ultra Short Term Bond Fund-Regular Plan-Monthly Dividend Payout - 10.0191MOSt Ultra Short Term Bond Fund-Regular Plan-Quarterly Dividend Payout - 10.0488MOSt Ultra Short Term Bond Fund-Regular Plan-Weekly Dividend Option - 10.0072Motilal Oswal Most Focused Dyn Eq Fund (G) - 12.1348Motilal Oswal Most Focused Dynamic Equity Fund-Dir (Div-A) - 12.3283

Prepare for high savings flows into equity

Blogs Blog Details

Mr. Gautam Sinha Roy

Fund Manager, MF

The market is currently grappling with two major constraints as it is trading at all-time high levels. Firstly the valuations have skyrocketed as stocks have gained sharply in the recent past. The price-to-earning (P/E) multiple of all major indices are at their record highs.
While the Nifty is at 24x Trailing PE, the midcaps are even more expensive, hence Nifty-500 is at ~26x.Though index levels have moved up, there is no visible growth in earnings to support it.
In my opinion, for the market to further go up, the earnings growth has to pick up. The upside for the market depends on the growth trajectory of corporate earnings which is currently missing.
The second constraint here is the liquidity situation, which is creating a floor for the market. We are seeing unprecedented domestic retail liquidity coming into the market.

Positive shift
This is the first time we are seeing a huge shift in domestic retail asset allocation into equity which according to me is a good thing. In fact, this liquidity is keeping the market high currently. I would say that this change in attitude of domestic household in terms of investment into equity through mutual funds is a positive thing. Indian household savings were highly skewed towards physical assets like gold and real estate.

Now the trend is changing. And because of this shift I believe that $10-20 billion per annum of incremental flows will keep coming into equity from domestic retail investors and the bulk of this will be through the mutual fund route.
The amount may look high. But it is not if you consider our domestic savings rate of 30 per cent of the GDP. Even half to one percentage point increased allocation into equity will look high because of the historically abysmally low savings flow into equity from domestic investors. We have not seen this kind of flows till now so it is looking quite high.
The market participants should be prepared to deal with this kind of sharp flows into equity from now on.
This huge liquidity from domestic investors is supporting the market and it would cap any sharp downfall for the market.

What could change the situation on the positive side is improvement in the earnings trajectory. If that has to happen then domestic consumption has to pick up, especially rural consumption, which has been lagging for the past four years. All depends on a broad-based economic recovery. I feel the focus areas will be consumption and affordable housing sector which could trigger accelerated growth for the economy and corporate earnings.
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