[04:26:18 PM] => Myiris: Welcome to the live chat session, Mr. Sukumar will be joining us shortly
[04:26:52 PM] => DISCLAIMER:
[04:28:52 PM] => Mr. R Sukumar is the Vice President - Investments & Fund Manager, Kothari Pioneer AMC Ltd. At the time of this conversation / chat, Mr. Sukumar may or may not have positions in the stocks mentioned below, although holdings may change at any time. The views expressed by Mr. Sukumar 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. Mr. Sukumar, 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.
[04:29:39 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.
[04:30:17 PM] => Lastly the views expressed by Mr. Sukumar 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.

[04:31:00 PM] => Myiris:Welcome to the chat session Mr. Sukumar

[04:31:26 PM] => RS: Good evening participants

[04:32:32 PM] => Dinesh: Why do you have scrips like HDFC, HDFC Bank, ICICI, Crisil, Mahindra and Mahindra which have nothing to do with Internet in your Kothari Internet opportunities fund?
[04:34:01 PM] => RS: As per our original strategy (also mentioned in the original IT document), we felt that it will be profitable to invest in traditional businesses that can gain due to use of Internet. Even when dot-coms were popular Lou Gerstner of IBM remarked that Dot-coms are like fire flies which appear before the storm and the real storm is when traditional businesses start leveraging the power of Internet. I always believed in this and hence the strategy to invest in Indian companies which can benefit due to the Internet directly and/or through subsidiaries.

[04:35:01 PM] => Sunil: Why are you having exposure to dotcoms like indya.com, indiainfoline.com ? The world over dotcoms have failed And you have gone ahead and made private placement in a few dotcoms? Now do you regret your decision or you feel you will realise the value?
[04:36:30 PM] => RS: I was and am skeptical of dot-coms in many verticals. But, I believe that dot-coms in media and trading can be successful and I am still hopeful of the prospects of these two companies. (Incidentally Indya.com was offered on a rights basis to us as shareholders of Planetasia.com and I believe that the we will be able to sell the same above our cost).

[04:37:48 PM] => Sachin: Investors were unable to predict this tech crash happening, but why were professional fund managers unable to predict and take corrective action at the right time?
[04:38:35 PM] => RS:I don’t think any fund manager was able to predict a fall of this magnitude, though most of us realized that growth assumptions were getting stretched and consequently the risks in the sector were increasing.

[04:39:40 PM] => Abhay: How do you expect to produce good returns in a ‘scam ridden’ market like this?
[04:40:27 PM] => RS: Focus on fundamentals and quality stocks. It is a simple philosophy which is difficult to practice but the invariably produces good results over 3 to 5 years.

[04:41:22 PM] => Renuka: Have we reached the bottom or can the markets go down further from these levels?
[04:42:14 PM] => RS: It is almost impossible to identify a bottom. But, the important point is that quality stocks are available cheap in terms of various valuation parameters. My experience is that if we can identify and buy them now we can look forward to very good returns.

[04:43:25 PM] => Ncshah: We hold 25000 master plus since 1991 entry rate Rs.10 what would be the most profitable and wise decision at present? To hold or quit?
[04:44:03 PM] => RS: No comments on our competitors

[04:44:24 PM] => Ashok: Why do you have unlisted holdings in a number of your schemes?
[04:45:29 PM] => RS: We thought that it was a good idea to get into some high potential businesses at a very early stage, so that we could get good returns. We recognize the risk associated with these type of investments and have hence limited them to a very small portion of the portfolio.

[04:46:14 PM] => Sameer: What is your advice to those investors who had had bought units in your internet opportunities fund and whose NAV is below Rs 5 today?
[04:47:17 PM] => RS: I believe that the portfolio is well positioned and can perform very well when the sentiment improves.

[04:47:58 PM] => Neyha: Normally , when is a good time to invest and redeem from equities or equity funds?
[04:48:54 PM] => RS: I personally believe that it is not worth timing the market. I believe that the right strategy is to invest regularly (preferably every month) in good equities /equity funds and take the issue of timing out.

[04:50:05 PM] => Vivek: A number of tech funds were launched at the peak of the tech mania. You launched Internet fund in Feb 2000. With the tech crash your fund too has suffered. Can we ever hope that atleast we will able to redeem our investments at par?
[04:51:52 PM] => RS:I believe that the portfolio is well positioned and can perform very well when the sentiment improves.

[04:52:40 PM] => Sapna: What is the logic behind investing in Dr Reddy (ADS) in Kothari Prima plus?
[04:53:36 PM] => RS: The ADS’s were trading at a discount to local shares when we bought them and we sold them when they started trading at a substantial premium to local shares. Hence, we got a higher return on ADS’s compared to local shares of the same company.

[04:54:16 PM] => Suhas: When do you see the reversal in the US slowdown?
[04:55:33 PM] => RS: I think that economic recovery could be atleast a year away. But, stock markets lead the economy in an upturn and could start moving up in a few months.

[04:56:00 PM] => Satya: Will the results of front-line tech stocks lead to re rating of IT stocks?
[04:56:46 PM] => RS: Not immediately. I think there is going to be divergence in performance trends of leaders vs. the followers. Even if the performance of front-line stocks in good, the others might languish.

[04:57:39 PM] => Dennis: Why are there ADS (Wipro, Satyam) and GDS (Aptech) in your portfolio?
[04:58:40 PM] => RS: We believe that good tech stocks can trade at a premium overseas when the stock markets there start recovering. So, the appreciation could be more for them then the underlying local shares.

[04:59:57 PM] => Preeti: Do you think the second rung IT stocks shall survive?
[05:00:58 PM] => RS: Many of them will not as they do not have any strong reason to differentiate themselves and offer a good value proposition to customers. Some of them have unique strengths and they could survive if they really work hard during this tough phase.

[05:01:35 PM] => Lalita: Why do you have a high exposure to equity in your pension Plan which is basically a tax saving pension scheme?
[05:02:22 PM] => RS: Our exposure is never more than 40% to equities. Pension Plan is a fund for long term savings and hence I feel that it is desirable to have an equity component, which can give a superior return over the long term.

[05:02:45 PM] => Soumya: What is your view on Shoppers Stop- an unlisted scrip which is there in a number of schemes of Kothari?
[05:03:03 PM] => RS: Cannot give specific comments on individual unlisted companies

[05:03:57 PM] => Nayanar: What are your views on the current capital market reforms undertaken by SEBI? Will it reduce the volatility in the markets in the long run?
[05:04:34 PM] => RS: I believe the current steps are positive for long term development of the market.

[05:06:26 PM] => Sudha: Which are the quality companies in healthcare?
[05:07:07 PM] => RS: Cannot answer this question due to compliance issues

[05:07:41 PM] => Dilip: Is equity investing about timing or is it about long term investment?
[05:08:05 PM] => RS: I believe in long term equity investing.

[05:08:50 PM] => Satyajit: Your internet opportunities fund is a sector specific "growth scheme". Can you please show where is the growth? If you are saying that investors should have a long term view then what is the long term returns that this scheme would offer. Please be specific- 6months , 1 yr. and 3 yrs.
[05:10:11 PM] => RS: I believe that long term is over 3 years. It is not possible to quantify the returns, but I believe that it could be more than broad based indices like BSE100 or 200 and also more than many other funds though there is a risk of not achieving that.

[05:11:30 PM] => T.S. Bhaskaran: How the funds are able to perform very well. What is the strategy in selecting stocks and portfolio composition with the changing scenario of markets very often?
[05:12:20 PM] => RS: By focusing on comprehensive evaluation of the fundamentals of the stocks. I spend most of my time finding out more about the businesses of the companies by meeting various people, reading as much about the companies and the sectors and maintaining a certain discipline in the whole process. I believe that a portfolio of the strongest companies can weather bear markets and can give good returns and my focus is to identify the strongest companies and stay invested in them.

[05:13:21 PM] => dpie: Is it worth investing in Blue chip funds(dividend) now ?
[05:13:45 PM] => RS: I believe so.

[05:14:13 PM] => Swalia: What is the price potential of Mascot Systems with a 12 month price target?
[05:14:31 PM] => RS: No comments

[05:15:03 PM] => Vivio-66: I see on the Elliot Charts that the Sensex will go to 1850 with Infosys also below 2000. Assuming this happens, what will you do and suggest?
[05:16:35 PM] => RS: If it happens, I will re-evaluate fundamentals and will stay invested if the fundamentals are strong.

[05:19:34 PM] => ranganathan_nds: Please what will be the state of the equity market in the next three months i.e., July-Sept., 2001, and the quarter thereafter i.e., Oct-Dec 2001. Can you fix where the market is heading ?
[05:20:23 PM] => No comments

[05:20:57 PM] => Myiris:Mr Sukumar will not be answering stock specific questions

[05:21:32 PM] => Jajoo: People in UTI have commented in the press that if the Market touches 4200 index things will be all right - that is to say that the current NAV shall remain protected. Does that mean that the current undisclosed NAV is around RS. 8.50 if you assume the 40% rise required. If this is true why can't the UTI throw the repurchase window open to all and sundry - are there more hidden erosion of wealth?
[05:21:45 PM] => RS: The question is best answered by them.

[05:22:26 PM] => Rao: Are sector-based investments even through MFs advisable in the present scenario?
[05:24:58 PM] => Myiris: Mr Sukumar is on an urgent phone call, please bear with us

[05:27:21 PM] => RS: Sector funds have different characteristics from diversified funds and might be very suitable for some and not suited for others. Whether a sector fund will suit your objective is best decided by you after discussing with your qualified advisor/agent.
[05:28:28 PM] => Raghu : Considering the present scenario, does investments in index funds make sense? What is your opinion?

[05:31:14 PM] => RS: I personally think that a well managed fund can outperform most index funds over the long term. (warning : Pioneer ITI and I might benefit from the growth of actively managed funds).

[05:32:21 PM] => Merlin : Keeping in mind the US-64 fiasco, do you think the pvt.sector MFs are going to be adversely affected?
[05:34:01 PM] => RS: I don’t think so. I think that most investors are well educated and will stay invested in well managed and transparent private sector MFs.

[05:35:52 PM] => Krishnan : Now that the tech scrips are not doing too well, do you plan to change your investment strategy with regard to the internet opportunities fund?
[05:37:02 PM] => RS: No. We believe that the portfolio of the fund is well positioned.

[05:38:21 PM] => Shobha : I have invested heavily in equity funds. Considering the low returns, how long would you advise investors like me to hold on?
[05:39:34 PM] => RS: As long as you are invested in good funds, you should not worry, but could review the relative performance and style of your funds every quarter or so.

[05:40:42 PM] => Shilpkala : In which vertical industries do you expect to see growth/turnaround in the next 3-6 months ?
[05:41:41 PM] => RS: I think that select IT companies, new generation banks and 2-wheeler manufacturers can record good growth.

[05:42:50 PM] => K.D. Rai : Should I buy Indogulf Corp. at current price? I may assume that the share may go down to 25 and up to 60 in two years time.
[05:44:13 PM] => RS: We have invested in Indo Gulf in some of our funds as we see a lot of value in the stock at the current price(warning : some of our funds and /or some of employees might be owning shares of the company)

[05:46:01 PM] => Lok 94 : If you had to launch a sector-specific fund today, which sector would you choose and why?
[05:49:40 PM] => RS: I think the range of sector funds we already have are sufficient. There is no new sector for which I can think of a sector fund.

[05:52:06 PM] => Myiris: We are overwhelmed with the response that Mr Sukumar has got from the myiris community.We still have over 80 questions to be answered but are pressed for time.Therefore with our apologies to everybody Mr Sukumar shall be answering only the last 3 questions.

[05:52:47 PM] => T.S Baskaran : In your opinion when do you think that the tech slowdown will start reversing?
[05:53:18 PM] => RS: I think that it would take 6 months to a year.

[05:53:47 PM] => Nandakumar : What is your assessment of the fundamentals of product driven tech companies such as visual soft and kale? Is the market overreacting to a bad year of products sales for visual soft?
[05:54:21 PM] => RS: I think that the market is not in a position to evaluate these companies and hence the extreme volatility. I think both the companies are still to establish the long term sustainability of the product business. The jury is still out.

[05:54:41 PM] => Ravi : Sir, So you think that the current spell of monsoons will actually revive rural demand as widely expected?
[05:55:24 PM] => RS: To some extent definitely. But, rotting food stocks and inflated procurement prices are long term problems which are going to have a negative effect.

[05:56:49 PM] => Myiris: That's all we have time for today.Thank you for participating in the chat.

[05:58:44 PM] => We look forward to your company on our next chat session with Mr. Jaideep . V. Mehta, Director, Techno Shares and Stocks Ltd. on Friday.

[05:59:09 PM] => Myiris : Till then ....Good Bye!!