[04:30:25 PM] => Myiris: Welcome to the Live Chat Session on Myiris.com.
[04:31:26 PM] => Myiris : Our guest Ms. Chandan Desai, Head - Equity, JM Mutual Fund will be joining us shortly
[04:32:11 PM] => DISCLAIMER

[04:33:03 PM] => Ms. Chandan Desai is the Head - Equity, JM Mutual Fund. At the time of this conversation / chat, Ms. Desai may or may not have positions in the stocks mentioned below, although holdings may change at any time. The views expressed by Ms. Chandan Desai is based upon information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such. Ms. Desai, his company and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed.
[04:33:54 PM] => None of the information contained herein constitutes, or is intended to constitute a recommendation of any particular security or trading strategy or a determination that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.
[04:34:17 PM] => Lastly the views expressed by Ms. Desai have no bearing whatsoever with that of IRIS Ltd. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website www.myiris.com.

[04:35:02 PM] => Myiris : Welcome to the chat session Ms. Desai

[04:35:39 PM] => Mittal_S: I have put in money in the growth fund of a leading company. Now the NAV has depreciated very much. So should, I wait or exit out of it and put it in some of the income fund?
[04:36:58 PM] => CD : Before taking any decision, please see the asset allocation and portfolio of the fund in which you have invested. If the allocation is heavily skewed towards any one sector and the portfolio consists of second line stocks, you should exit the Fund.
[04:37:15 PM] => However, if it is a well-diversified fund consisting of well-established industry leaders, then this is a wrong time to exit. Though current scenario for equity markets is quite uncertain, the valuations of most of the bluechip stocks are at an attractive levels and a 6-8 months wait at this juncture should yield handsome returns.

[04:38:19 PM] => Sanju kadam : When do you see the RBI cutting interest rates now that fed has already done a rate cut?
[04:40:05 PM] => CD : Since long, RBI has been talking of bias towards softening of interest rates and a cut looks due in the near future.

[04:40:38 PM] => BehlR: How can investors identify good performing equity funds?
[04:41:24 PM] => CD : In order to identify a good performing equity fund, you will have to compare performance of the fund over various period like 1 month, quarter, half year and a year as against certain benchmark indices like Sensex or Nifty. A fund which has been beating these benchmark indices on a consistent basis can be considered as a good performing fund.

[04:42:43 PM] => Sanjayn: Please give me one good pick each from Pharma and FMCG?
[04:43:39 PM] => CD : Though as per recent SEBI guidelines, we can’t recommend any particular stock, but the leading domestic pharma companies and MNC FMCG companies look ideal investment bet.

[04:44:18 PM] => Reddy G: How would you compare the performance of your funds?
[04:45:55 PM] => CD : Our debt funds have been doing extremely well for quite sometime and JM Income Fund (bond scheme) has got CPR-1 ranking from CRISIL for last 3 consecutive quarters. JM Basic Fund, the petrochemical sector fund has give appreciable return of 35 % in the last 2 years.
[04:46:22 PM] => Though equity schemes have been showing negative performance in last 1 year in line with the industry, JM Balanced is one of the top performers in its category and we have been able to beat the industry average in most of our funds.

[04:46:45 PM] => Sanjeev_K: What do you think for the market in a one-month horizon?
[04:48:14 PM] => CD : We expect market to remain vulnerable to any deterioration in the current US-Afghanistan situation. Even though most of the asset price destruction has already taken place, we feel that market can further drift downwards in the immediate term if there is one more attack on US by terrorist group being attacked in Afghanistan.

[04:50:04 PM] => Manish90 : When do you feel the current down turn would change?
[04:50:57 PM] => CD : Indian stock market has been showing persistent downtrend over last few months due to weak global sentiments, discouraging economic numbers, downgrade of rating by leading rating agencies, problems at the country’s largest Mutual Fund. Over and above that, like other countries around the world, we were also getting affected by slowdown in the US economy as our technology business is mainly dependent on US.
[04:51:27 PM] => With the current military conflict between Afghanistan and US, the US economy has been pushed over the edge and has a possibility of going into recession. Thus, the current scenario can further worsen into an extremely adverse situation. But normally at such times market bottom out and we foresee the same happening in next 3 months.

[04:51:58 PM] => Joshua : Which sector would be the next fancy of brokers in the near term after Pharma?
[04:53:32 PM] => CD : Currently, all market players are realigning themselves towards defensive sectors and we think that after pharma it may be turn of FMCG counters as these 2 sectors are comparative insulated from economic downturn.

[04:54:21 PM] => Yousuf_A : What is your take on the Equity markets with the government contemplating the interest rate cut?
[04:54:46 PM] => CD : Though there may not be any immediate impact of interest rate cut as the situation in equity market is quite vulnerable to current conflict in the region, any rate cut augurs well for equity market over long term.
[04:55:28 PM] => With declining interest rates and stable/ upward moving inflation rate, it will be a must for people to park at least some of the savings in equity markets to generate decent returns.

[04:55:42 PM] => Hariharan : What are the target returns fund manager is planning for the JM Basic fund?
[04:57:09 PM] => CD : JM Basic Fund is an oil and gas sector fund. Though current mayhem in the market has affected this sector also, we see a lot more opportunity in this sector with scheduled dismantling of APM in April, 2002. Though the actual return will be dependent on the market conditions, we target a 20-25% return from current levels.

[04:58:55 PM] => Shah_ketan : Any Chance of a new fund based on the Pharma coming from JM?
[04:59:33 PM] => CD : Though we are mulling about the idea, the final decision in not taken as yet.

[05:00:49 PM] => Parikh : Now that Fed has cut rates for the 9th time this year do you see the steps they have taken through these rate cuts reversing the down turn?
[05:01:24 PM] => CD : In a normal situation, the 9 cuts by Fed over last 10 months should have started reversing the US economic scenario. But the 11th September attacks may delay this reversal. Till then US economy was mainly facing problem of reduction in business spending, but now it may lead to slowdown in consumer spending also.
[05:02:01 PM] => For long, consumer spending has been the growth engine of US economy and with this engine slowing down, it will take some more time for rate cuts to show desired result.

[05:02:15 PM] => Yadav56 : Can you tell me something about JM Equity's asset allocation?
[05:02:43 PM] => CD : At present JM Equity has 60% in equities, 10% in G-Secs and 30% in money market instruments.

[05:06:03 PM] => Godwan : You were holding close to 6% of Infosys till August 31-2001 inspite of the tech meltdown. Why are you still holding such a big percentage?
[05:06:26 PM] => CD : Though the technology scenario is not appearing to be very bright at present, we feel that only industry leaders like Infosys and Wipro can survive this downphase and yet come out as winners.
[05:07:09 PM] => Also the fact that Infosys can still show 25-30% growth rate goes in favour of that stock as with discoursing economic numbers so far, we can hardly expect any domestic economy related stock to show good numbers (except for pharma).

[05:07:39 PM] => Nilesh: What are your views on the future direction of the Indian Mutual Fund Industry?
[05:08:30 PM] => CD : Indian Mutual Fund Industry has gone through a lot of ups and down over the years and should be able to sustain current downturn. We see a further consolidation in this industry as small players will have to join hands with bigger ones to survive.
[05:09:12 PM] => After this consolidation phase, we will see more strong players operating in the market.

[05:10:17 PM] => Kurien.kt : Given the current scenario, what do you recommend to invest in - old economy or new economy?
[05:11:17 PM] => CD : In the current scenario, valuations are attractive for both old economy as well as new economy. But as new economy, especially technology sector is largely dependent on US economy which is in vulnerable position, it is advisable to stick to old economy at present stage.

[05:12:12 PM] => Ramnath : Now that the US economy is in a recession, where do we go from here?
[05:12:35 PM] => CD : The US economy was already fragile before the recent attacks on account of curtailment in business spending. But now even consumer spending in US may get affected with mounting layoffs in airline, technology, entertainment and hotel industries.
[05:12:59 PM] => Though to a great extent India is insulated from the recession in US economy as exports account for only 10% of GDP, slowing US economy is bound to have impact on India also, especially on the technology sector. Any major pullout by FIIs on account of uncertainty in the region can also affect the market in a very adverse manner.
[05:14:30 PM] => Thus, we may see a further adverse situation in the short term and a volatile market. However, normally markets bottom out in such extreme adverse situations and yield good return over long term.

[05:14:45 PM] => Major54 : Can you tell me the current cash levels in each of your funds?
[05:15:07 PM] => CD : JM Equity Fund is having 30% cash and JM Balanced is having 25% cash.

[05:15:50 PM] => Tushar-H : Why should I invest in a Mutual Fund when most funds perform as miserably as they do in India?
[05:16:04 PM] => CD : When markets face a downturn, both direct equity investment as well as mutual fund investments show negative returns. But in direct investments, one may put all his eggs into one basket whereas Mutual Fund schemes never put all money in 1 or 2 stocks and try to keep a well-diversified portfolio.
[05:16:40 PM] => Hence, when the markets start coming down, the fall in MF schemes is lower compared to % fall in individual stocks. Thus, equity investment through Mutual Funds reduces the risk profile of investment to some extent.

[05:18:32 PM] => Raikarpp : When stock markets are hovering at lower levels, and considering the current scenario markets are expected to remain dull, how is your pure equity and balanced equity schemes are expected to perform?
[05:19:12 PM] => CD : In last few months, we have reduced our equity exposure to a great extent and today we are sitting on 40% cash and cash equivalent in Equity Fund and almost 35% cash and cash equivalent in JM Balanced Fund apart from debt exposure of 20%.
[05:20:37 PM] => The equity exposure is also restricted to cash-rich industry leaders who should be able to survive downturn in their business, if any. With this defensive positioning we should be able to minimize losses when the market goes down in the near future as aftermath of US attack.
[05:21:21 PM] => However, the cash position built up over last few months will come handy in next 2-3 months as we plan to accumulate stocks at lower level. This investment at lower levels should yield good appreciation over next 9-12 months.

[05:22:23 PM] => Prathu_raikar : When markets are at lower levels which rationales you hold good based on which you are expected to give returns above normal market returns?
[05:23:18 PM] => CD : Considering the current vulnerable scenario, the Fund has already reduced its equity exposure as a short term defensive measure and has decided to reinvest at lower levels when the situation stabilizes.
[05:23:51 PM] => The Fund will utilize every major downfall to pick up stocks, which are relatively insulated and have strong fundamentals. This cherry picking at attractive valuations should help us to give above normal market returns.

[05:25:02 PM] => Brijeshved : How do we know that analyst's in India do not give recommendations based on their holdings? Merrily Lynch in US has implemented a policy whereby analyst covering specific sectors and stocks can not invest in them? Do you have any plans to follow that ethical policy?
[05:26:56 PM] => CD : In order to ensure that analyst in India do not give recommendations based on their holdings, SEBI has recently implemented a strict guideline on ‘Insider Trading’ . As per this guideline, analyst and Fund Managers etc. are required to give a list of their (including in the name of spouse) holdings to their organization which gets forwarded to SEBI.
[05:27:24 PM] => Also any person giving a media interview cannot recommend a stock unless he discloses his/her own position in the same. Thus, these guidelines in a way act as a deterrent to any front-running or misleading recommendations.

[05:32:11 PM] => Pankajbardiya : What would be effect from war?
[05:34:03 PM] => CD : If the current conflict leads to a full-fledged war going on for a long time, the situation in markets across the world will worsen. Already, the global economy is on the tip of recession and war may push it over the edge.
[05:34:30 PM] => No region (except China) around the globe looks a probable candidate to take on the mantle of global growth leadership from USA. Hence, we fear that a prolonged war could lead to recession around the world.

[05:35:22 PM] => Mahendrakh : What would be an ideal asset allocation for an investor?
[05:36:17 PM] => CD : Though asset allocation depends on age and income profile of the investor depending upon his risk taking ability, on an average an investor should ideally put 50% of his surplus money in no-risk investments like tax-free RBI bonds, bank FDs etc., 30% in low risk bonds and 20% in equity.

[05:37:35 PM] => MariaG : Could you elaborate on your investment philosophy?
[05:38:28 PM] => CD : We, at JM Mutual Fund believe that management is the most critical factor for any company and believe that a good management can turnaround any business whereas mediocre management can mar the best business.
[05:39:47 PM] => Hence, we invest in industry leaders with well-established management.

[05:41:48 PM] => Mohammed Ali : How has been the performance of your equity funds?
[05:43:24 PM] => CD : Though equity schemes have been showing negative performance in last 1 year in line with the industry, JM Balanced is one of the top performers in its category and we have been able to beat the industry average in most of our funds.
[05:43:48 PM] => In fact, JM Basic Fund, our petrochemical sector fund is top performer in the last 1 month.

[05:48:06 PM] => Myiris : Thats the end of today's chat with Ms. Chandan Desai, Head - Equity, JM Mutual Fund.

[05:48:47 PM] => Myiris : We thank Ms. Desai for making this a lively and informative session.

[05:49:14 PM] => Myiris : Thank you all for your participation.