Transcript of Chat with Mr.Balasubramanian.A ,Fund manager ,Birla Mutual Fund. - 23rd September 2002
[04:26:53 PM] => Myiris: Welcome to the live chat session.
[04:28:17 PM] => Myiris: Our guest today is Mr A Balasubramanian, fund manager, Birla Mutual Fund. At the time of this conversation/chat, Mr Balasubramanian may or may not have positions in the stocks mentioned below, though holdings may change at any time. The views expressed by Mr Balasubramanian are based on information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such.
[04:30:29 PM] => Mr Balasubramanian, 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.
[04:32:06 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.
[04:35:10 PM] => Lastly, the views expressed by Mr Balasubramanian 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.
[04:36:57 PM] => Myiris: Welcome to the chat session, Mr Balasubramanian.
[04:38:39 PM] => Devangfgsbcd: What are your views on the divestment of BPCL & HPCL?
[04:41:09 PM] => AB: The BPCL and HPCL disinvestment have been delayed for three months. As a result, stock prices of both have fallen more than 20 per cent. It is to be noted here that both PSUs are worthy of making investments at current valuations. Even if one has to assume the disinvestment is not going to happen, both stocks are trading at PE multiples of less than eight and dividend yield of roughly about 5.50%. After the recent event happenings, it is difficult to say when the divestment would happen. Probably, the recent downgrade of India's rating by S&P might throw up some surprises on the disinvesment front. Our strategy currently on these two stocks is to remain invested purely on the basis of value that these stocks offer.
[04:42:55 PM] => Mohanborder: Which fund would be suitable for long-term (10 years) with annual returns of 15-25%?
[04:44:54 PM] => AB: Generally, equity funds should offer higher returns over a period of time. Risk premium on equity investments varies from 6 to 7% over 10-year government securities yield. Given the current interest rate structure and dividend yields for majority of the stocks becoming attractive, one could expect a double digit return from equity.
[04:46:56 PM] => E: What is the future of the media sector?
[04:50:26 PM] => AB: The media sector as a whole is undergoing a change currently. There is an ordinance pending in the Parliament which would make all channels pay channels as currently practised in international markets. If that happens, consumers would have their own choice in terms of different channels. One need to see such developments closely.
[04:53:07 PM] => atuldesai_cal: Is it worth at current levels to invest in the steel industry?
[04:54:59 PM] => AB: Steel industry has shown good improvement in their realisations due to the price increase witnessed worldwide due to the demand coming up from US, UK and China. Steel being a commodity, one needs to keep track of international price movement of steel. Thus, steel sector should be looked at more from the trading angle.
[04:57:41 PM] => SEKHAR_KUS: What is Hughes Soft position in the future?
[04:59:52 PM] => AB: Hughes Software had posted poor results due to the telecom meltdown worldwide. One needs to closely watch developments in this sector before forming a view.
[05:01:58 PM] => Joemalayil: If a company declares 30% dividend on what basis will they calculate the 30%, whether on face value.......?
[05:03:22 PM] => AB: Dividend is always declared on the face value of shares.
[05:04:10 PM] => pvkca: For a first-time investor, do balanced funds make more sense than say, a full-fledged equity or debt fund?
[05:05:38 PM] => AB: Balanced fund schemes give the best of both debt as well as equity. If it is a first time kind of investment, but the risk appetite is higher, probably one can take an exposure to direct equity itself. Otherwise, balanced fund give the flexibility of remaining invested in both equity and debt.
[05:06:51 PM] => Sunil: Why is it that some balanced funds have done better than their hybrid balanced counterparts ~V a mix of equity and bond funds - from the same fund house?
[05:07:44 PM] => AB: Balanced funds generally adopt a conservative investment philosophy when it comes to the question of investing in both equity as well as debt. During the period of interest rate falling, if there is an aggressive philosophy in managing the fixed income portion of the portfolio, then the return (on the debt portfolio) could be as equal as normal income schemes. We are currently managing both the portion of the portfolio in an aggressive manner which should result in a better peformance in the coming months.
[05:09:55 PM] => sudesh28: I have Mastek @ 422. Let me know the future of this stock.
[05:11:08 PM] => AB: We have the same stock in our portfolio.
[05:13:12 PM] => wpereira: What is the growth prospect of Hexaware Software? I have made an investment of 1 lakh in that scrip. Pls advise.
[05:14:21 PM] => AB: No comment on Hexaware.
[05:21:20 PM] => mundursri2001: What is the reason for downfall in the equity market?
[05:22:52 PM] => AB: Equity market has not been doing well due to various reasons such as global tech meltdown, reduction in spending, global recession post September 11, accounting scandal in US. As far as Indian equity market goes, corporate fundamentals have been improving but due to the sentiment is being due to reasons stated above, money flow into the equity market has not been at its best.
[05:24:04 PM] => Mundursri2001: Is it the right time to enter into equity mutual funds?
[05:25:59 PM] => AB: Equity investment currently looks good for various reasons as is given below: Interest rates are down substantially. Corporates earnings are improving due to lower interest rate. Dividend yields have begun to go up. For certain companies, dividend yield is higher than 10 year Government securities yield. Industrial growth is showing some sign of pick up on the basis of IIP number released recently. Auto sector, especially, commercial vehicle segment is showing a sign of recovery. All these factors augur well with the equity investment. Thus, if one looks at equity investment with more than 6 months kind of time frame, investors would definitly get the benefit. We have currently, Mid Cap fund on the offering and it could be used as a vehicle to take exposure to pure equity.
[05:26:27 PM] => sanjay_chandrashekar: I want to know whether to buy or sell Matrix laboratories, aventis crop science, and neuland laboratories.
[05:28:16 PM] => AB: No comment on Matrix Lab, Neuland as they are not under radar.
[05:29:06 PM] => Sunilgct: whats the prospect of silverline in the near future?
[05:30:20 PM] => AB: No comment on Silverline Industries.
[05:30:36 PM] => Sriram: Will the Sensex touch 2930 again in the coming 2 months?
[05:31:06 PM] => AB: Sensex is under pressure due to lack of participation from institutional investors. At the same time, index has been giving a good bounce back from the level of 3000 or so for quiet some time. Thus, unless until something adverse happens (Iraq war kind), one should not see the Sensex coming under pressure.
[05:31:19 PM] => Sriram: There is newspaper reports that Premji will be selling Wipro shares in the stockmarket for his charity work....Will it have any effect on the prices in the near term?
[05:31:33 PM] => AB: Not really.
[05:31:54 PM] => Myiris: That is the end of the chat session for today.
[05:32:21 PM] => Myiris : Thank you all for logging on.
[05:32:40 PM] => Myiris : We thank Mr A Balasubramanian of Birla Mutual Fund for his time and valuable inputs.
[05:35:03 PM] => Myiris: We will be back with more at chatmasala.
[05:36:10 PM] => Myiris: Till then its Bye from us.