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AMC Stocks Decline Up To 12% On Franklin AMC Fiasco; SIP Closures Up 70% In March


On liquidity concerns as Franklin Templeton AMC stopped six of its debt schemes for redemption as well as further investments there have been seen pressure mounting onAMC stocks including the likes of HDFC AMC, Nippon Life India Asset Management tumbling up to 12% in intra-day today.

AMC Stocks Decline On Franklin AMC Fiasco; SIP Closures Up 70% In March

As per a leading business dailies report, 6 of the schemes of Franklin with a combined asset size of Rs. 25,856 crore have been shut with effect from April 23, 2020.
"In the current environment, it has been difficult to generate liquidity, especially for credit papers, which are low on the credit curve," said Sanjay Sapre, president at Franklin Templeton MF.

Bearing the brunt have been other stocks from the financial space that includes micro finance institution, NBFCs and housing finance companies.

Also as part of another development FPIs have reduced their stake in India's financial space further adding to the woes of the sector.

We expect a flattish U-shape economic recovery. Risks remain on the downside and could lead to few banks being downgraded," said S&P Global Ratings earlier while taking a negative call on Axis Bank and ICICI Bank.

Amongs the NBFCs as TLTROs failed to gain favour with banks, Bajaj Finance effortless break levels of Rs. 2000, trading lower by more than 8% in intra-day trade.

The vulnerability in the AMC stocks have come in on news that suggested the closure ratio of SIPs surged to 70% in March i.e. above the 11-month average of 57.4%.

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