Markets: Beating Volatility China Looks Opaque, Indiato Benefit
from That: AroraM A R K E TS & F I N A N C E ��1 2
MSCI India 654.15 1.08MSCI EM 1635.43 0.13MSCI BRIC 394.54
0.12MSCI World 6158.48 0.34SX 40 15471.04 1.18Nikkei 18182.39
0.48Starit Times 2906.43 0.98
Prices per Troy Ounce ($)
GOLD RATE
Nifty 7823 1.37
Sensex 25764.78 1.22
Market Trends
At 7 pm ISTValues in US $, Gross
STOCK INDICES % CHANGE
*At 10.30pm, After adjusting for import duty, Indian spot gold
lower by $3.65 to US Comex gold price on Thursday. The premium on
local gold is due to tight supply following import curbs.
US India
OPEN 1133.20 1249.87
LAST* 1126.40 1242.69
FOREX RATE (`-$ Exchange Rate)
DUBAI CRUDE48.701.46
Absolute Change
OIL ($) BOND10-YR YIELD
7.750.00
Figures in %
OPEN
66.25
LAST
66.24
[email protected]
Mumbai: The Pension Fund Reg-ulatory and Development Au-thority
(PFRDA) has eased re-strictions on National PensionScheme fund
managers regard-ing investments by private sectoremployees,
potentially broaden-ing the scope of returns.
Fresh accretions can go intostocks in the futures and
options
(F&O) segment, PFRDA an-nounced on Tuesday. Until now,such
money going into equity wasallocated in line with the
50-stockNifty’s composition.
NPS fund managers handlingmoney from government employ-ees
already had the freedom to dothis, with the same caveat — thatthis
only applied to fresh accre-tions. Apart from limiting the
in-vestment to stocks in the F&O seg-ment, the companies need
to havea market cap of more than Rs
NPS investments are long-termwith a 5-20-year holding
period.
Manoj Nagpal, CEO of OutlookAsia Capital, was critical of
thedecision to restricting F&O expo-sure to only new additional
mon-ey. “Only the fresh accretion offunds will be actively
managed.That means a part of the schemewill be actively managed,
whilethe remaining part will be pas-sively managed,” he said.
The industry is, meanwhile,hoping PFRDA will increase fund
management expenses.“The 0.01% expense ratio for the
NPS funds is not just low, it is neg-ligible,” said Balram
Bhagat,CEO, UTI Retirement Solutions.
Shukla of HDFC Pension Fundssaid, “The regulator is seized of
thecost structure problem and we arehopeful it will get corrected
soon.”
However, any increase in fundmanagement fees will increasethe
costs for investors. To be sure,this can rise even without
direct-ly increasing the expense ratio.
5,000 crore, said Sumit Shukla,CEO, HDFC Pension Funds.There are
158 scrips in the F&Osegment, which is characterisedby high
liquidity.
Shukla welcomed the move. “In-dia is a growing economy with
alarge number of very good com-panies outside the Nifty uni-verse,”
Shukla said. “This movewill increase the ability of thefund manager
to invest in themand, thereby, generate better re-turns for
long-term investors.”
More Pension Money Can Now Flow to F&O SegmentPFRDA allows
NPS managers to invest fresh accretions from private sector
employees in F&O, as is done with contributions from govt
staff
1 Year 5 Years
Passively managed NPS Equity Funds
-3.05 8.54
Nifty -4.53 7.06Actively man-aged Large Cap Funds
-0.15 8.27
Returns [CAGR in %] as on Sept 2, 2015
Active vs Passive
LONG & SHORT | R PRASAD
AN
IRB
AN
BO
RA
Meet the Guys Who Beat the Market
STARS OF D-STREET
Nifty’s return from April to August, 2015 -7.16%
LARGE-CAP FUNDS
Tata Pure Equity -3.01% Return
PRADEEP GOKHALEHe has been a fund manager for 11 years. Before
joining the Tata group, he worked in companies like Lubrizol, Tata
Int’l and Bombay Dyeing in accounts and taxation
TOP 3 PICKS: HDFC Bank, Maruti, Axis Bank
Gokhale was underweight banks much before the downturn began.
His logic: recovery in PSU banks will take long. He focused on
consumer-led growth industries like auto and pharmaceutical.
Franklin India Bluechip -3.26% Return
ANAND RADHAKRISHNANHe has 21 years of experience. The chief
investment officer of Franklin Equity - India is responsible for
all local equity funds
TOP 3 PICKS: HDFC Bank, Infosys, ICICI Bank
Unlike Gokhale, Radhakrishnan was not underweight banks. His big
bets include IT majors Infosys and Cogni-zant, and pharma major Dr
Reddy’s. When the market slide worsened after yuan devaluation, IT
and pharma were among the best performers, vindicating his
call.
-3.34% ReturnUTI Equity
ANOOP BHASKARHe has 23 years of experience in fund management
and investment research. Before UTI, he was with Sundaram Mutual
Fund
TOP 3 PICKS: HDFC Bank, Infosys, Reliance
He has increased the fund’s holdings in healthcare, auto and
cement in the past six months, realising con-sumer growth and
pharma’s export-led success model were the keys to success. He is
overweight healthcare and auto but, like most others, underweight
banks.
If April was the cruellest month, August was no better. Indian
markets tumbled the most in a month since 2011 and FIIs sold the
biggest chunk of shares in a month since 2008. But some local fund
managers defied the market and beat benchmarks with superior
returns from April to August. They did so by eschewing radical
bets, risky, volatile sectors and stocking up on consumer and
technology stocks. Prashant Mahesh profiles the nine who stood out
and reveals the secret of their success.
Note: Returns, from April 1 to August 31, are absolute. AUMs and
top 3 holdings are as on July 31. Funds with an AUM of `100 crore
and above have been considered. Source: Value Research
LARGE & MID-CAP FUNDS
TOP 3 PICKS: HDFC Bank, ICICI Bank, Dr Reddy’s
ICICI Prudential Top 200 1% Return
YOGESH BHATTHe has experience of 19 years — 11 of them with
ICICI Prudential Mutual Fund. He has worked across brokerage houses
in dealing and strategy
Bhatt has doubled pharma weightage and increased IT exposure in
his portfolio. He has also cut the number of stocks from 45 to 30,
removing laggards.
Kotak Select Focus -1.28% ReturnHARSHA UPADHYAYAHe has over 15
years of experience in asset management, having worked with DSP
BlackRock and UTI Mutual Fund earlier
TOP 3 PICKS: Infosys, HDFC Bank, L&T
Upadhyaya shunned metals and commodity com-panies and stocked up
on select banks, industrials, consumers and automobiles.
MO MOSt Focused Multicap 35 0.53% Return
GAUTAM SINHA ROYHe has 11 years of experience in fund management
and research and is known for managing the firm’s investment
book
Gautam’s investment mantra — avoid troubled sectors and
companies and go for growth stocks. He stayed away from power, PSU
banks and textiles. Like most other large-cap funds, he increased
exposure to refiners like HPCL and consumer stocks like Maruti.
TOP 3 PICKS: Maruti, HPCL, HDFC Bank
CNX 200’s return from April to August, 2015 -5.99%
MID & SMALL-CAP FUNDS
TOP 3 PICKS: Idea, Bharti, Welspun
BNP Paribas Midcap 3.87% Return
SHREYAS DEVALKARHe has nine years of experience as equity
research analyst and specialises in IT, telecommunication,
industrials and utilities
Devalkar tries to identify leaders or challengers in small
sectors. He picked stocks like VA Tech Wabag, Welspun &
Ramakrishna Forging and avoided com-modity stocks and those exposed
to global volatility.
TOP 3 PICKS: Max, Amara Raja, Crisil
MO MOSt Focused Midcap 30 2.38% Return
TAHER BADSHAHHe has 18 years of experience across sell side
equity research and fund manage-ment, and is known for his calls on
the automobile sector
Strong conviction and higher stakes in companies likely to show
sharp earnings growth have worked for this fund. Early
identification of mid-caps such as Amara Raja Batteries, Bajaj
Finance, Max India and Ajanta Pharma have helped it outperform.
SBI Small & Midcap 6.67% Return
R SRINIVASANHe heads the equity team at SBI MF. He has 19 years
of experience in capital mar-kets, having worked with FCH,
Principal PNB AMC & Oppenheimer, among others
An allocation of over 50% to small-cap stocks and a bottom-up
approach to stock-picking helped fund’s outperformance. Stocks like
Atul, D-Link, Relaxo Footwear and Techno Electric helped fund
return higher than other mid-cap funds.
TOP 3 PICKS: MRF, Relaxo, Atul
CNX Mid-cap’s return from April to August, 2015 -0.1%
Our Bureau
Mumbai: The share price of Am-tek Auto on Thursday crashed37%,
leading analysts to believethat selling by foreign institu-tional
investors is taking a heavytoll on its share price.
The stock, which will be pushedout of the derivative segment
fromOctober, closed at Rs 31.5 on theBSE, with the market cap of
thecompany slipping to Rs 695 crore.“Today’s (Thursday’s) fall in
Am-tek Auto was a surprise as deriva-tive positions did not suggest
anymargin call pressure like earlier,”said SP Tulsian, founder,
Premi-um Investments. “The only logicalconclusion for the sharp
fall couldbe that institutional players werescrambling to exit the
counter.”
Foreign investors’ holding inAmtek Auto came down to 18.8%at the
end of the quarter endedJune from 35.1% in the previousquarter.
Domestic institutionalinvestors, however, raised theirstake to
16.4% from 5.1% in thesame period.
The stock has lost 81.6% of itsmarket capitalisation in just
over amonth. Thursday was the fourthtime in a month that Amtek
Autocrashed over 20%.
Amtek Auto had clarified thatthere was some “temporary cashflow
mismatch”, and to mitigatethe situation, the promoters hadinfused
.̀ 75 crore into the compa-ny. The company has a consolidat-ed top
line of .̀ 15,000 crore and itsmajor outgo is interest on loan
orborrowing, analysts said.
The share prices of the subsidi-ary companies of Amtek Autohave
been hitting the lower cir-cuit for many days now. OnThursday,
Castex Technologiesfell 4.9% to .̀ 51.9.
Amtek Auto Stock Slides37% as ‘FIIsRush to Exit’
� Sebi Notifies Revised Listing Regulations
MUMBAI The Securities and Ex-change Board of India has
notifiedthe revised listing regulations. Theregulator has given
companies 90
days to implement the new rules, reports OurBureau. However, two
provisions — rules governing related-party transactions and
onre-classification of promoters as public shareholders under
various circumstances —would be applicable with immediate effect,
theregulator said. Sebi has allowed passing of or-dinary resolution
instead of special resolutionin case of all material related-party
trans-actions subject to related parties abstainingfrom voting on
such resolutions. These chang-es are in line with the provision of
the Compa-nies Act,2013.
Short Takes
ANIR
BAN
Sankhadip.DeyTypewritten TextSource:
http://articles.economictimes.indiatimes.com/2015-09-04/news/66212812_1_top-3-picks-psu-hdfc-bank
http://articles.economictimes.indiatimes.com/2015-09-04/news/66212812_1_top-3-picks-psu-hdfc-bank
