Mkts may see lot of stock specific moves in Oct

2009 September 29
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by admin

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Vetri Subramaniam, Head- Equity Funds at Religare Mutual Fund said that markets may see lot of stock specific moves in October. He sees disconnect between Indian & global metal stocks. He feels that PSU divestment will increase the free float of the companies. He informed that Religare MF has participated in Oil India IPO, but not in NHPC IPO. He is underweight on auto sector in the portfolio.
He further said that September quarter earnings are seen in line with expectations. He would be comfortable at 14000-15000 level on Sensex. He is positive on domestic consumption themes.
Religare PSU Equity Fund NFO closed on October 28, 2009. The investment theme of the fund says that PSUs are more resilient in economic downturn and their balance sheets are virtually debt free. PSUs have huge cash on books and are less vulnerable to earnings slowdown. PSUs pay strong dividends.
In its PSU divestment agenda, government could raise more than $ 160 billion and will reduce holding as per norms by the SEBI. The government may go for divestments of around $ 4-5 billion in FY10. More free float will lead to more investor interest. Disinvestment will raise free float and the weightage of companies will increase in benchmark indices.
The Fund mandate allows to hold companies (up to 20%) even after Government exits or becomes a minority shareholder. At least 65% of the assets will be invested in companies, which are part of the BSE PSU Index. Balance 35% will be invested in PSUs outside the BSE PSU Index.
The Fund will have no market capitalization bias and will be style neutral. Portfolio will comprise of 25 – 30 stocks. The Fund will also participate in forthcoming IPOs of Government companies. Areas of focus of the fund are Oil & Gas, Power, Metals, Gas Utilities, Capital Goods, Banking and finance Companies.

Vetri Subramaniam, Head- Equity Funds at Religare Mutual Fund said that markets may see lot of stock specific moves in October. He sees disconnect between Indian & global metal stocks. He feels that PSU divestment will increase the free float of the companies. He informed that Religare MF has participated in Oil India IPO, but not in NHPC IPO. He is underweight on auto sector in the portfolio.

He further said that September quarter earnings are seen in line with expectations. He would be comfortable at 14000-15000 level on Sensex. He is positive on domestic consumption themes.

Religare PSU Equity Fund NFO closed on October 28, 2009. The investment theme of the fund says that PSUs are more resilient in economic downturn and their balance sheets are virtually debt free. PSUs have huge cash on books and are less vulnerable to earnings slowdown. PSUs pay strong dividends.

In its PSU divestment agenda, government could raise more than $ 160 billion and will reduce holding as per norms by the SEBI. The government may go for divestments of around $ 4-5 billion in FY10. More free float will lead to more investor interest. Disinvestment will raise free float and the weightage of companies will increase in benchmark indices.

The Fund mandate allows to hold companies (up to 20%) even after Government exits or becomes a minority shareholder. At least 65% of the assets will be invested in companies, which are part of the BSE PSU Index. Balance 35% will be invested in PSUs outside the BSE PSU Index.

The Fund will have no market capitalization bias and will be style neutral. Portfolio will comprise of 25 – 30 stocks. The Fund will also participate in forthcoming IPOs of Government companies. Areas of focus of the fund are Oil & Gas, Power, Metals, Gas Utilities, Capital Goods, Banking and finance Companies.

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