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Survey of Foreign Liabilities and Assets of Mutual Fund Companies 2016-17
September, 06th 2017

Today, the Reserve Bank released the results of the 2016-17 round of the Survey of Foreign Liabilities and Assets of the Mutual Fund (MF) Companies on its website. The survey covers 44 Indian MF companies and their Asset Management Companies (AMCs), which held/acquired foreign assets and/or liabilities during the reference year 2016-17 and/or in the preceding year (See Annex for list of companies). The financial year-end position was collected from MFs through Schedule 4 in respect of units issued to non-residents, unpaid dividend, redemption of units issued to non-residents and MFs’ overseas investments. Information on the stock of external assets and liabilities of the AMCs were collected through the Annual Return on Foreign Liabilities and Assets (FLA).

Highlights:

I. Mutual Fund Companies:

  • Foreign liabilities of MF companies stood at 719.8 billion in March 2017 of which units issued to non-residents accounted for 99.8 per cent. The remaining liabilities included unpaid income/dividends to non-residents and sale proceeds pending repatriation.

  • Large valuation changes caused a surge in foreign liabilities of MFs during 2016-17, with the rise in the market value of units (23.6 per cent) far exceeding the growth in their face value (4.0 per cent). As a result, the ratio of market value to face value of liabilities increased to 2.66 in March 2017 from 2.24 a year ago, indicating valuation gains during 2016-17 (Tables 1 & 2).

  • Foreign assets of MF companies (mainly equity securities) amounted to 38.7 billion in March 2017, which was only 5.4 per cent of their foreign liabilities, indicating that they held most of their assets within the country. The net foreign liabilities of MF companies stood at 681.1 billion (US$ 10.5 billion) in March 2017 (Tables 1 & 3).

  • UAE, Singapore, UK, USA and Mauritius together accounted for nearly half of the MF Units held by non-residents in March 2017. Units held in Mauritius recorded a 48 per cent decline, coinciding with the signing of the Protocol to amend the India-Mauritius Double Taxation Avoidance Agreement (DTAA) during 2016-17 (Tables 4 & 5).

  • USA and Luxembourg remained the major overseas investment destinations for MFs companies (Table 6).

II. Asset Management Companies:

  • AMCs associated with MFs had net foreign liabilities of 52.4 billion (US$ 0.8 billion) in March 2017 (liabilities of 56.8 billion and assets of 4.4 billion). Foreign liabilities of AMCs were largely owed to non-residents in Mauritius, UK and Japan whereas Guernsey was the main destination of their relatively small overseas assets (Tables 78 & 9).

  • The reinvested earnings of foreign direct investors in the AMCs (estimated from their share in the difference between a company’s net profit and distributed dividends) stood at 5.3 billion in 2016-17 ( 5.4 billion in the previous year).

The results of the previous survey round for the year 2015-16 was placed in the public domain vide press release dated August 4, 2016.

Ajit Prasad
Assistant Adviser

Press Release: 2017-2018/635


Table 1: Mutual Fund Companies – Foreign Liabilities and Assets
Item End-March 2016 End-March 2017 % Growth
( terms)
million US$ million million US$ million
(1) (2) (3) (4) (5) (6)
Foreign Liabilities 581,678 8,769 719,807 11,117 23.7
Foreign Assets 38,048 574 38,700 597 1.7
Net Liabilities 543,630 8,195 681,107 10,520 22
Notes: 1. The amount in US $ terms is arrived at by using the RBI reference rate (end-March).
2. Liabilities / Assets are valued at market prices unless stated otherwise.
3. Sum of constituent items may not add up to total due to rounding off.
4. These are also applicable for the remaining tables.

 

Table 2: Mutual Fund Companies – Non-Resident Holding of Foreign Liabilities
Item End-March 2016 End-March 2017 % Growth
( terms)
million US$ million million US$ million
(1) (2) (3) (4) (5) (6)
Face Value of Units 259,440 3,911 269,801 4,167 4.0
Market Value of Units 581,214 8,762 718,427 11,096 23.6
Other Foreign Liabilities 464 7 1,380 21 197.4

 

Table 3: Mutual Fund Companies – Foreign Assets
Item End-March 2016 End-March 2017 % Growth
( terms)
million US$ million million US$ million
(1) (2) (3) (4) (5) (6)
Equity Securities 37,870 571 38,551 595 1.8
Debt Securities 0 0 0 0 0
Other Foreign Assets 178 3 149 2 -16.3

 

Table 4: Foreign Liabilities in Units of Mutual Fund Companies at Face Value – Major Countries
Amount in million
Country End-March 2016 End-March 2017 % Share 
in 2017
Annual Variation
Absolute per cent
(1) (2) (3) (4) (5) (6)
United Arab Emirates 44,319 48,470 18.0 4,151 9.4
Singapore 24,039 28,215 10.5 4,176 17.4
United Kingdom 21,654 25,003 9.3 3,349 15.5
United States of America 16,859 19,362 7.2 2,503 14.8
Mauritius 20,105 10,482 3.9 -9,623 -47.9
Hong Kong 5,802 6,840 2.5 1,038 17.9
Oman 3,084 4,684 1.7 1,600 51.9
Saudi Arabia 2,866 3,816 1.4 950 33.1
Canada 3,045 3,330 1.2 285 9.4
Kenya 3,105 3,161 1.2 56 1.8
Others 114,562 116,438 43.2 1,876 1.6
Total 259,440 269,801 100.0 10,361 4.0

 

Table 5: Foreign Liabilities in Units of Mutual Fund Companies at Market Value – Major Countries
Amount in million
Country End-March 2016 End-March 2017 % Share 
in 2017
Annual Variation
Absolute per cent
(1) (2) (3) (4) (5) (6)
United Arab Emirates 86,244 113,436 15.8 27,192 31.5
Singapore 57,964 72,248 10.1 14,284 24.6
United States of America 46,758 65,349 9.1 18,591 39.8
United Kingdom 42,785 57,690 8.0 14,905 34.8
Mauritius 53,574 50,409 7.0 -3,165 -5.9
Hong Kong 11,046 15,116 2.1 4,070 36.8
Oman 6,854 12,281 1.7 5,427 79.2
Canada 10,067 11,945 1.7 1,878 18.7
Saudi Arabia 5,951 9,812 1.4 3,861 64.9
Kuwait 4,774 7,519 1.0 2,745 57.5
Others 255,197 302,622 42.1 47,425 18.6
Total 581,214 718,427 100.0 137,213 23.6

Table 6: Equity Securities held Abroad by Mutual Fund Companies – Major Countries
Amount in million
Country End-March 2016 End-March 2017 % Share 
in 2017
Variation
Absolute per cent
(1) (2) (3) (4) (5) (6)
United States Of America 14,947 17,141 44.5 2,194 14.7
Luxembourg 18,545 16,614 43.1 -1,931 -10.4
Cayman Islands 871 947 2.5 76 8.7
Switzerland 608 674 1.7 66 10.9
Korea, Republic of 553 585 1.5 32 5.8
Taiwan 404 503 1.3 99 24.5
Ireland 273 286 0.7 13 4.8
Brazil 506 265 0.7 -241 -47.6
Japan 287 253 0.7 -34 -11.8
United Arab Emirates 0 224 0.6 --- ---
Others 876 1,059 2.7 183 20.9
Total 37,870 38,551 100.0 681 1.8

 

Table 7: Foreign Liabilities and Assets of Asset Management Companies
Item End-March 2016 End-March 2017 % Growth 
( terms)
million US$ million million US$ million
(1) (2) (3) (4) (5) (6)
Foreign Liabilities 45,396 684 56,777 877 25.1
Foreign Assets 3,824 58 4,352 67 13.8
Net Liabilities 41,572 626 52,425 810 26.1

 

Table 8: Foreign Liabilities of Asset Management Companies – Major Countries
Amount in million
  End-March Variation
Country 2016 2017 % Share 
in 2017
Absolute per cent
(1) (2) (3) (4) (5) (6)
Mauritius 9,683 14,717 25.9 5,034 52.0
United Kingdom 11,831 14,000 24.7 2,169 18.3
Japan 7,413 8,114 14.3 701 9.5
Canada 4,068 4,856 8.6 788 19.4
Hong Kong 2,194 3,713 6.5 1,519 69.2
Singapore 3,373 3,176 5.6 -197 -5.8
France 2,334 2,853 5.0 519 22.2
United States of America 1,525 2,019 3.6 494 32.4
Korea, Republic of 1,278 1,399 2.5 121 9.5
Cayman Islands 737 806 1.4 69 9.4
Netherlands 620 700 1.2 80 12.9
Others 340 424 0.7 84 24.7
Grand Total 45,396 56,777 100 11,381 25.1

 

Table 9: Foreign Assets of Asset Management Companies – Major Countries
Amount in million
  End-March Variation
Country 2016 2017 % Share in 2017 Absolute Per cent
(1) (2) (3) (4) (5) (6)
Guernsey 2,426 2,956 67.9 530 21.8
Singapore 360 383 8.8 23 6.4
Mauritius 245 265 6.1 20 8.2
United Arab Emirates 52 46 1.1 -6 -11.5
Sri Lanka 4 4 0.1 0 0.0
Others 737 698 16.0 -39 -5.3
Grand Total 3,824 4,352 100.0 528 13.8
 
 
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