Jefferies recommends 'hold' rating to Nippon AMC

Updated : March 17, 2021 05:09:05 IST

The Jefferies report also stated that the management sees strong growth potential in exchange traded funds (ETFs), which can open up new money pools

Jefferies also stated that the management aimed to widen the product suite

Global research firm Jefferies has maintained 'hold' rating for Nippon Asset Management Company (AMC) stating that the company was on a revival path post ownership change and had arrested market share dips -- both in the retail and the corporate sectors. Jefferies has a price target of Rs 350 for the stock.

The brokerage said that the management aimed to widen the product suite through non-MFs and passives, and initiate new risk management processes.

Jefferies said in a report, "As per the management, the industry has seen a rare negative correlation between market returns and equity flow. Runaway growth in direct equity participation of retail should ease, making way for higher flows into MFs. Notably, even as equity flows have been negative for the past nine months, new folio registration has been strong. Debt flows will likely slow down till rates settle at new levels."

The research firm also stated that the four key pillars for the revival of Nippon Asset Management Company were:

1. Sustaining the recent alpha generation from active management.

2. Diversifying revenue streams into non-MF products such as alternative investment funds and offshore.

3. Building up on head-start in passive products.

4. Taking more digital initiatives both for distributors and customers.

The Jefferies report highlighted that the management sees strong growth potential in exchange traded funds (ETFs), which can open up new money pools.

Published : March 17, 2021 05:09 PM IST

Jefferies recommends 'hold' rating to Nippon AMC

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