Fund houses line up new offers on whiff of positive sentiment

Mutual fund houses are hoping to push through their new fund offers as they sense investor sentiment turning positive after the recent rally in stocks.
Almost two dozen fund offer documents have been filed with SEBI in the past two months, since the start of the current financial year. In addition, there are several schemes that have received SEBI approval but have been kept on hold pending an opportune time for launch, said fund managers.
These funds will see reasonably improved investor interest as sentiment has reasonably improved in the past few days, said Mr N. Sethuram Iyer, Chief Investment Officer, Shinsei Mutual Fund.
Already, money is flowing into equity schemes, said a fund manager.
The past few new fund offers have seen collections as low as Rs 10 crore; funds can hope to get better collections now due to the revival in investor interest, said Mr Iyer.
The benchmark Sensex has gained 14 per cent since last Friday.
Some fund managers are wary and feel they cannot judge if the rally of the past few days will attract investor money, though it has definitely caught investor attention.
“I wouldn’t expect these many launches three months down the line,” said one of them.
It is the existing products that will be preferred to the new ones, as they are sitting on built-up portfolios, said another fund manager.

The schemes lined up for SEBI approval are of varied themes – equity, debt, index, gold, fund of (international) funds, and arbitrage schemes.
In the equity category are Fidelity Forward India, IDFC Dynamic Equity fund, Reliance Target Appreciation Fund, Shinsei Industry Leaders Fund, Canara Robeco Force Fund and Reliance Micro Cap Fund. In the debt category are Religare Credit Opportunities Fund, Shinsei Liquid Fund, UTI Capital Plus Fund, Mirae Short Term Bond Fund, Kotak FMP, Templeton’s Fixed Horizon Fund, Sahara Daily Fund and Baroda Pioneer PSU Bond Fund.
Even as fund managers predict that upcoming fund launches will get more favourable attention, there are investors who feel that have already missed the bus.
At the 8000 levels (of the Sensex) nobody invested, and now with equity markets at higher levels, investors are afraid these levels may not sustain, said Iyer.
The right approach for investors should be a long-term one, he said. “Although equity is a risky investment, one can reap rewards over a longer term.”

Source: http://www.thehindubusinessline.com/2009/05/23/stories/2009052351351000.htm

Birla Sun Life MF Introduce Generate Capacity

Facility" in the growth option of Birla Sun Life Frontline Equity Fund, with effect from May 22, 2009. Under this facility, the investor can choose a specific % target return, which, if achieved, the gain/fund value (as opted by the investor) shall be switched to the growth option of the debt scheme selected by the investor from the options provided.
This facility is being made available for the transaction made through electronic mode only. The trigger levels are 15%, 30%, 50% & 100% gain from average cost of acquisition of the units in the scheme.
Trigger Switch options: The gain amount or the whole invested amount with gain in the scheme to debt scheme selected by investor. The minimum application amount criteria for debt schemes will not be applicable for the switches.
Debt Schemes: Birla Sun Life Savings Fund-Retail Plan-Growth option, Birla Sun Life Short Term Fund-Retail Plan-Growth Option, Birla Sun Life Dynamic Bond Fund-Retail Plan-Growth Option, Birla Sun Life Cash Plus-Retail Growth
Default trigger/scheme: The default trigger level - 15%, Default debt scheme for switch -in - Birla Sun Life Savings Fund- Retail Plan-Growth Option.

Inactive MFs Hit Investors’ Money?

Investors have seen mutual fund managers sitting on piles of cash for months. They did not invest in equity when the stock valuations were low across the board. Now that the stock markets have hit the roof, they have been made to look ordinary. The story gets worse, because they are holding the investors money without really showing any significant gains. Investors are angry, having seen people make money as stocks go skywards, while they have hardly anything substantial to show. To get the experts viewpoints on this non-performance by mutual funds, CNBC-TV18, called on Dhirendra Kumar, CEO of Value Research and Nilesh Shah, Deputy MD of ICICI Prudential, to provide the answers for these very people.

Q: Is it true that yesterday there was no redemption allowed at NAV and what s the justification for that?
Shah: We have to be fair with the investors who are staying with us; investors who are redeeming and investors who are coming in. Yesterday when bulk of the market didn’t trade and 600 out of 800 scrips on National Stock Exchange were quoting at Friday’s price because there was no volume, we could not have calculated a fair and appropriate NAV. In that situation, it would have been unfair to the investors who were redeeming out. It would have probably been a bit advantageous to the investors who were getting in and it would be unfair to the investors who were staying with us. So, we requested the regulator to say that if it can declare tomorrow as a non-working day and it acceded to our request for the benefit of all unit holders.

Q: Acceptable logic for you, Dhirendra?
Kumar: Yes, a fairly logical and principled stand. That is because mutual funds buy stocks and if you couldn’t buy stocks or sell stocks then how can you buy a mutual fund.

Q: One clarification: how does it work when the market hits down circuit or do you think in those circumstances there were more hours of trade so most stocks got to move up or down?
Shah: More important than the ups and downs is the calculation of NAV. If I had 800 scrips on the National Stock Exchange traded in the price available, I would have calculated the NAV and then we would have taken a call whether we have the cash to pay for the redemptions or not. So the question is can we calculate the NAV, which is fair to the investor who is coming in, the one who is going out, and the one who is staying with us? If any of these three conditions are not met, we have no option but to go back to the Association of Mutual Funds of India (AMFI) or Securities and Exchange Board of India (SEBI) and request this to be declared as a non-working day on the overall benefit of the unit holders.

Q: Did you get a lot of redemption requests and have more come in since they could not be executed at yesterday s NAV. Would they be coming in today?
Shah: No. unfortunately most people were trying to take advantage of an arbitrage opportunity because some part of the NAV would have been quoted at Friday’s price and most people had the expectation that today too that the markets will be up. So we had seen fair amount of buying interest at the client and distributor level than the redemption level. I think the perception of investors have changed where selling at every rise has been now replaced with buying at every dip. So, I do not foresee too much of redemptions coming through going forward if the markets continue to remain supported by the policy actions of the government.

Q: We were speaking with the head of UTI Mutual Fund who made the point that mutual funds have not seen that much by way of inflows over the past few months. Do you expect to see redemptions to start kicking in because these are probably investors who held on for more than the past six-eight months or got in even?
Kumar: Certainly. I feel that there are lot of disappointed investors today more so because a lot of investors came at the peak level and after that they have been disappointed by the secular decline over a prolonged period and the psychology of an individual investor is that if he is able to recover a substantial part of his losses or get back in the black then he plans to move out. So I think, not in the immediate future, but many of these investors will be breaking, or at least they will be thinking about it.
Looking at the performance objectively, mutual funds were behaving like an ordinary investor because many of them were caught on the wrong foot. First, they had substantial amount of cash, the market turned around and suddenly the surprising mandate put the market on fire. So mutual funds contributed to the whole underperformance thing, because they kept sitting on substantial amounts of cash.

Q: Is that a fair point that many of the mutual funds, equity mutual funds may have actually underperformed the market on the way up because of large cash holdings?
Shah: We need to see the picture in its totality. I can talk about ICICI Prudential Mutual Fund and as Dhirendra will agree we have never taken aggressive cash calls across most of our funds where the mandate is to invest in equity. On the way up, some of our funds would have probably underperformed the broad market because lot of high beta stocks moved up significantly. Stocks that were beaten down in sectors like real estate, constructions and power have jumped up significantly. Some of those stocks are today trading above fair value. By participating in those stocks, I would not like to be accused later that you do not look at a stock’s quality. A 15-day or 30-day period is unfair to evaluate a fund manager’s performance.
Let s talk about three-, five- and 10-year performances and on that basis most of the Indian fund managers have been outperforming benchmark indices by a reasonable margin. How many analysts were predicting the election result that there will be thumping majority and the election outcome will be like this. Fund managers are not gods; they also take a call based on rational expectations. On Friday, no one had expected that on Monday there will be a working government, that there will be so much hope and hike in aspirations.
We built a little cash balance to ensure that if there is an election outcome that is against our expectations, we will be able to average ourselves in and on the back of rally where the markets had moved from 8,000 to 12,000, it was not a very inappropriate call. So in hindsight, anyone can say this or that should be done but at the end of the day, we followed a logical rational approach. I think our five-year and 10-year performance does show that we have been following a fairly reasonable and logical approach.

Q: This criticism though is not just about Monday’s event. This criticism is about high cash levels that has been perpetuated since the market bounced almost 50 per cent from its lows. Give us a sense, even a ballpark figure, of how much money is waiting to be invested from the mutual fund fraternity in the market. What would you estimate the cash at?
Kumar: It s not a matter of estimation, it’s a matter of fact that at the end of April mutual funds had nearly Rs 14,000 crore and it was equal to what they had in March-end as well, which means on a net basis all equity funds combined together had a similar amount of cash while the market had gone up. I agree with the way ICICI Prudential managed its funds given its size, it had about 6.5% of cash position, which I think for an open-ended equity fund is quite normal, but on the other hand some of the large fund families with substantial equity assets under management Reliance Mutual Fund for example had about Rs 5,900 crore cash as on month-end as disclosed by it. That itself accounts for nearly 27 per cent of its equity fund. Number two was UTI Mutual Fund, it had about Rs 1,700 crore, which amounted to about 18% of the total assets, followed by SBI. In fact, with SBI, the surprising thing was that compared to March-end, its April-end cash went up substantially.

Q: How would you advise equity mutual fund investors to approach investing now because there has been a disruptive event in the market -- suddenly the market is up 25% and people may be a bit lost on how to position their investments. What would you tell them?
Kumar: I would urge investors that they should not rush into the market. If they don t have a plan, they should develop one and go about implementing it. It is also the time for indexing. So far we held this view that indexing is not relevant and till about six months back we held the view that equity funds, be it actively managed funds or be it Sensex, will give handsome rewards over a period of time. I think things are changing dramatically. I think it s about time investors start looking at indexing as a part of their core portfolio.

Q: One question on the market: we had a crazy day yesterday; we also had a fantastic mandate in terms of elections. How would you map the next few weeks and months for us?
Shah: I think we are going to see more crazy days but obviously not like yesterday. The market today is driven by hope and aspirations like in 1991 when the Congress government came and on the basis of the majority given to them they pulled India’s growth trajectory up and in a challenging environment did a wonderful job. Today, the same aspirations are there. The environment is as challenging as it was in 1991, probably we have more foreign exchange reserves than 1991, but the deficit is fairly high and there is hope that the government will carry out various reform processes whereby it will pull up the growth trajectory of India again -- like China travelled on the path to prosperity from 1980s till today. India will probably be moving in the same direction.
So, there is a lot of hope and aspirations are high. It’s impossible for a government to meet all the hopes and aspirations at one go. So there will be days of disappointment, there will be days of hope and we will continue to see a market which swings up and down based on hope and greed or hope and fear, but overall there is reasonable chance this time that we should be able to kind of lead the economy into a higher growth trajectory and this should result in stronger capital markets over years to come.

Source: http://valueresearchonline.com/story/h2_storyview.asp?str=100243

MFs still cautious, to focus on large-caps only

Facing the risk of being labelled 'too cautious', the cash-laden mutual fund
industry wants to see more concrete evidence of a rally before taking a more firm call on the fate of the stock markets.
Investment officers of leading mutual funds seem to be less bullish of the rally post-elections than foreign institutions who are 'desperate' to deploy cash. MFs appear to have learnt a lesson from 2008 and say that they are focusing on large-caps and companies with good fundamentals, rather than bet on mid-caps and small-caps which fell faster in the ensuing sell-off. Exposure in equities as an asset class to the total market value of equity diversified funds has increased from 81% in March 2009 to 82.4% in April 2009 but going forward, perspective is the key. "If one bases their projection on fiscal 2010, there is hardly any value left. But if you look beyond 2010, the Indian economy seems more resilient. Many are awaiting earnings upgrades for companies. FIIs have a more long-term view while our domestic institutions have been more short-term focused," Seturam Iyer of Shinsei AMC said.
Monday's monster rally does not appear to have forced an immediate change in asset allocation strategies also. "This is more of a sentiment trigger as the uncertainty surrounding formation of government has gone. We will wait for events such as cabinet formation and the union budget (expected in 2 months). There has to be more concrete evidence before we re-look at stocks and sectors," Sameer Narayan, head of equities, Fortis Investments, said.
Equity experts at mutual funds are backing fundamentals over stock price gain. "Mid and small cap stocks had witnessed sharp declines over the last year or so. While in the short-term, increased risk appetite may lead to larger gains in mid and small cap stocks, over the long term, companies with good fundamentals are likely to do well irrespective of market cap ranges and sectors," Sukumar Rajah, CIO, equity, Franklin Templeton Investments, said.
Rather than remaining fully-invested, many mutual funds like Birla Sun Life which have kept 10-11% cash as compared to equity assets, want the freedom to invest if valuations are attractive.

Source: http://timesofindia.indiatimes.com/Business/MFs-still-cautious-to-focus-on-large-caps-only/articleshow/4549350.cms

After manic Monday, no redemption rush at MFs

Mutual funds did not witness any major redemption pressure on Tuesday as was being speculated following Monday’s record surge in equities. Industry players said investors might want to remain invested in the hope of a new bull run in the market.On Monday, the first trading day after the announcement of election results, trading had to be halted as Sensex breached the upper circuit twice on course to a 17.3 per cent, or 2,110 points, jump. However, as trading was closed after 12 noon on Monday, few traders or investors got a chance to trade. Mutual fund houses declared it as no-trading day and declined to redeem or sell units at the day’s NAVs (net asset values).This led to speculation that mutual funds would see huge outflow when the market opens on Tuesday as investors would rush to book profit.Jayesh Shroff, equity fund manager at SBI Mutual Fund, said there is no reason for investors to exit mutual fund schemes in the present scenario. “The overall market sentiments are positive and one would like to stay invested. In fact, investors who failed to invest on Monday as fund houses declared it a no-transaction day put money in equity schemes hoping for a strong rally in the market,” he added.Jaideep Bhattacharya, vice-president (marketing) with UTI Mutual Fund, said had there been better investment avenues other than equities, there could have been redemptions from equity funds. But that was not the case as most debt and fixed income instruments have been giving lower returns than equities.“Over the past two days, foreign institutional investors (FIIs) have invested around $5 billion in the Indian markets and the overall market sentiment, too, is buoyant. In such a scenario, it is in the benefit of investors to stay invested,” he added.According to data provided by Sebi, mutual funds could net-invest just Rs 50 lakh in equities on Monday as against Rs 1,000 crore investment by FIIs. On Tuesday, FIIs were net investors in equities to the tune of Rs 53 crore. Data on mutual funds’ equity investments on Tuesday were not available with the Sebi at the time of filing of the report. Rajiv Deep Bajaj, managing director of Bajaj Capital, a brokerage firm that also distributes mutual funds, said his company witnessed fresh investments in mutual funds on Tuesday. “The general macroeconomic environment of the country looks good following the election results and the equity market sentiments have changed. The fear that markets would correct below the 10,000-level is gone and we see the market in the 12,000-15,000 range for some time,” he said. Vikaas Sachdeva, country head for business development, Bharti AXA Investment Managers, and Waqar Naqvi, CEO of Taurus Mutual Fund, said they witnessed inflows in their equity funds. However, the inflow figures were not available with the fund houses readily.

Source: http://www.mydigitalfc.com/mutual-funds/after-manic-monday-no-redemption-rush-mfs-537

FIIs pump Rs 20,000 cr in stocks from early-March

Foreigners have been able to spot value better than Indians, at least as far as the stock market goes. FIIs have put in close to Rs 20,000 crore into Indian stock markets in the last 43 days since the bull rally began. Simply put, FIIs were daily net buyers of Rs 500 crore investments per day at a time the benchmark index went up above 14,000 from 8,160 levels. In comparison, mutual funds have been net buyers of Rs 3,300 crore - around 1/7th of the amount committed by FIIs.
According to Sebi data, FIIs have made net investments of Rs 19,820 crore till Tuesday from March 9, (when the 6,000-point rally began). The deluge of funds brought into the country by the FIIs has made them net buyers of equity for the calendar year 2009 at Rs 10,681 crore. They were net sellers of stocks amounting to a whopping Rs 52,987 crore in calendar year 2008.
FIIs are betting on companies reporting an improved financial performance in the years to come on the back of solid government policy initiatives. "We think the ensuing policy action will improve growth and thus earnings. We are forecasting 2.5% and 12.5% growth in earnings for sensex constituents in FY2010 and FY2011 respectively compared to our earlier forecast of minus 10% and 11%," Ridham Desai of Morgan Stanley said.
While many investors are waking up the possibility of Indian economy coming back on track with a smoother-than expected government formation, experts say the bet taken by FIIs for the last 2 months has paid off.
In the last one month, foreign investors have also aggressively taken up stakes in cash-strapped real estate companies such as DLF, Unitech, Indiabulls Real Estate as well as Suzlon either through qualified institutional placements or direct buying on the stock exchanges from the promoters. This has helped FIIs who actively participated in such offerings to immediately sit on significant gains (notional).
Deals like DLF promoters selling off 16.8 crore shares at Rs 230 apiece (current price Rs 385), Indiabulls Real Estate just sold off 15 crore shares at Rs 185 (current price Rs 200) and Unitech sold off 42 crore shares at Rs 38.50 apiece (current price Rs 71) show how foreign investors profited.
A re-rating of the markets is likely to take markets to expensive territory relative to current earnings but an improving fiscal situation would improve the optimism regarding growth next year, Jyotivardhan Jaipuria of Bank of America Merrill Lynch said.
However, cautious mutual funds have stuck to debt as their choice of asset during the same period - taking a diametrically opposite view. While FIIs were net sellers of debt to the tune of Rs 3,500 crore from March 9 - fund majors were net buyers having put Rs 46,000 crore into debt during the same time.

Source: http://timesofindia.indiatimes.com/Business/India-Business/FIIs-pump-Rs-20000-cr-in-stocks-from-early-March/articleshow/4553516.cms

Mkt outperformance will come from midcap cos: Reliance MF

Following the astounding opening (and subsequent suspension on hitting circuit) of the markets today, experts are now talking about which sectors and companies will lead the way ahead.
Madhu Kela, Head of Equity Investment of Reliance Mutual Fund, said,” The outperformance of the market will come from the midcap companies where ownership is negligible." He further said that the new highs can be expected from Nifty.

Q: Is there life beyond 4,200 or would you get cautious like some of our analysts here?
A: I am not cautious at all. I think the country is in an inflection point. I think lot of people will still worry about what happens to global sentiment and markets may have run-up too much. I think this has been an unprecedented verdict. This will give the Party the ability to act. I just fear that they should not be slower than what the market is expecting them to do. I am extremely confident that they will do it.

Q: Tell us the people who doubt the rally – why this verdict is equal to good news for the equity market?
A: The first thing is that as a portfolio manager what we have learned is whatever is outperforming the world will get towards that out performance. So, India is going to be one country which in the global world map is likely to outperform. I do not know what will happen in the next 2-5 days. This has been an investor’s delight who wanted to invest into India from a three-five year perspective.
Sometime back I had said USD 50 billion of flow over the next 12 months and these are not Foreign Institutional Investor (FII) flows. Now, whether it comes through External commercial borrowing (ECB), Foreign Currency Convertible Bond (FCCB), Foreign Direct Investment (FDI) there will be USD 50 billion of additional money and as a capital starved country that is what we need. I think once the money comes in then you will have lower interest rates then you will be able to build your infrastructure. So, the only thing the government should allow is a policy framework to attract this money and considering the crises which is going around in the world this is the best time for us to attract this capital.

Q: What about the cash people have been sitting on—not just mutual funds. You talk to a lot of hedge funds, FIIs, High Networth Individuals (HNI), do you think now they will just throw in the towel and come in. I mean, lot of people were holding out at 3,100 at 3,700. Now do you think it will be forced to enter the market?
A: The best comment which I heard on your channel, “The Left is out and people are left out.” I think our job and our business is such that people might be in a denial for sometime, the markets have run-up too much, 2,600 Nifty is already at 4,000-4,100, You will be out of job if you don’t deploy. The market could go to 20% and if you continue to remain in cash you will be out of your job. The bigger concern is from the hedge fund side, people who are running 10-20-30% net long and people who have left India. If there is a particular hedge fund which is 50% net long India and there is another hedge fund which is only 10% net long India, he will have no choice but to come and invest.

Q: Will you buy if the level is between 4,200 to 4,500?

A: We have not changed our portfolio; we have not changed our style. In lot of these funds, we are 80-90% invested and I think now is our turn. You will see midcaps flying, now you will see stock idea flying, I am sure we will be able to catch at least a lot of them because of our view that from this inflection point even if I buy 10-30% higher it doest matter because now we are playing as an investor’s delight.

Q: A lot of people will now think that because FII money will chase performance and you will see the largecaps outperforming. But for a portfolio manager like you looking for out performance, do you think there is better value in the broader market now and you could generate performance by buying those stocks which are still trading at 25% of their peak value?
A: Whichever portfolio manager has gone into caution and I think to lot of them, they have reduced the number of stocks. What people have ended selling up, is smallcap and midcap names because everyone was cautious and in these stocks the float is very limited. So that is where I think the maximum outperformance is going to come from. It may not be the top 50 companies but a company below that, the next 100 companies where the size is large and the ownership is

negligible.

Q: The thing that this coming back too though is the argument about what this past 50-60% on the market looks like. Does it look like the most resounding bear market rally we have ever seen or have we indeed put the worst behind us and begun a new cycle which most people are circumspect to admit to or to agree to. Where do you stand on that?
A: Let’s go back to the bull run which have happened in the world. For example, Japanese bull run; between 1973-74 Japanese market corrected by 50% and people thought that the bull run is over and after that the index went up ten fold. I see that is the kind of opportunity which we have for India that there us so much chaos which is going around in the world and here is one country where we have stable government for the next five years and they are committed to providing proper governance. Obviously, we have seen that in the last five years. So what kind of money could you attract and as I keep saying, if we get capital then our job is done.
It’s going to take sometime for people to digest whether after such a big rise should we be participating or not. But I think it’s a matter of time before people will aggressively participate.
Let me make one very important point that all the people are only talking about the cash which the portfolio managers are holding. What about the cash which Indian public are holding? For last 18 months we have not seen any inflow from Indian public and we have seen USD 300 billion of saving in last one year. What happens to that cash?
Now we are at 4,000 level, market is up 50-60%, we did not get a chance to get out, this is our opportunity, golden chance, let’s get out. I think some retail investors could commit that mistake. In fact this is an opportunity and I am not saying the market is going to go in a perpendicular manner; you may have some disappointment coming from global cues at some point of time but every dip is an opportunity to buy from a retail investor point of view.

Q: What themes would you like to back now from here? Would you back banking as the likely recipient of most reform from the government? Would you back infrastructure, would you back Public Sector Undertaking (PSU) candidates for divestment. If you wanted to play this government formation and the Budget what would you best bets be?
A: I think I am going to back entrepreneurship all over again. So you have to back bottom up companies where there is an extremely aggressive, smart entrepreneur who wants to grow. Capital availability for that percent during last 12-24 months; capital will become available for him. So that is theme number one that you can really catch a proper entrepreneur. The other point is there is going to be lot of performance difference between intra-sectors.
If I am right that USD 50 billion comes into this country in the next 12-18 months then you are seeing at least 15% appreciation in the rupee. So there are a lot of sectors which are going to get hurt because of that. So you will have differentiated performance. The domestic sector and the things which have linked to investment and domestic consumption and infrastructure will all over again do very well while things which are linked to international and rupee appreciation will not do as well or will do badly rather. It will make you to the market. So we would like to position ourselves into great entrepreneurs in these sectors which are likely to link to India.

Q: There are still concerns about the earnings. As an event would you say this is an event which is reprised equity upwards or are we stretching the argument there?
A: Earnings will follow. Last two weeks two real estate companies which are suppose to be in the darkest of the time are getting money. So earnings will follow, once people get money, once people are able to invest, earning will follow. We saw that in 2004, a lot of the capital goods companies are trading at 20-30-40 price-earnings (PE) multiple but as the money started to come in and as they started to invest earnings followed one-three years down the line.
So what people were focusing till now including me is what is going to happen next month or next three months. I think that trajectory is going to change and people are going to focus on what is going to happen after next one year and three years and that is where you see a lot of difference. You will see people who are skeptic about earnings and immediate earnings that will vain away as a matter of time.

Q: Last 6-12 months, a lot of stocks had got derated because of the quality of their balance sheets, they were overleveraged and access to capital was a question. You are speaking about USD 50 billion of global money flow into India. Do you think those stocks could get rerated now?
A: Yes. Last time I had said that the corporate governance is only talked or practiced in the bear market. In bull market, people want to focus on performance and momentum. For a lot of these companies which did not get capital in that bear market, we will end up getting capital. However, I would like to put a word of caution there is still a lot of good quality which is available. So we would definitely like to invest in that good quality which is backed by strong entrepreneurship.

Q: The circuit halted at 13,500. Lot of people year end target is 15,000 on the Sensex. Give me your range for the market?
A: I may sound over jubilant. I do not have a timeframe but my target is a new high in Nifty whether it happens in 12-24 months, I do not care. I think all these targets will get revised upwards.

Q: You think sub-10,000 levels in the Sensex are history. We won’t go back to those kind of levels, we will form a bottom above that?
A: As a matter of caution I may want to put out that there are only two things which can change that. One is, there is another catastrophe in the world in which case obviously we are going to be part of it. Second, the government reaction to reform and progress is far slower than what the world is expecting.

Source: http://www.moneycontrol.com/india/news/market-outlook/mkt-outperformance-will-comemidcap-cos-reliance-mf/397940/3

Mutual Funds Also Hit Circuit

The good news is that the markets are up, but the bad news is that fund investors could not benefit as they could not buy and sell, leaving them stuck where they were on Friday last.
Why? Because authorities have announced that Monday will be a taken as a non-business day for mutual funds.
This is the right thing to do by the authorities. The reasoning behind it is that the transaction time for all equity funds on a normal business day is 3 p.m., and on a day like today it would have been impossible to undertake any transactions at all. Therefore, it will be unfair for investors if fresh purchases and sales are allowed while the underlying asset prices are frozen.
The rule-based approach that applies here will then come into effect. If mutual funds get purchase and redemption requests on a non-business day, then these will get executed on the next business day.
On a typical Friday afternoon post-3 p.m., if an investor files a request, his order will get executed on the following business day -- he will get the Monday NAV in effect.
The uncertainty has rubbed off on the mutual fund managers too and they are all groping for suitable answers, but what is certain is that the ball is in the court of the Association of Mutual Funds of India (AMFI).
At the moment, while some mutual funds have said they are going to declare NAVs only as a reference point, others have indicated they will not declare NAVs and the rest are awaiting notification from AMFI before deciding either way.
Be that as it may, but for those interested in ‘what if’ kind of situation, here were the possibilities:
The election results may have been unexpected, but the reaction to it was very much in line with general expectations. After poll results were announced many analysts and asset managers were of the view that come Monday the markets are going go up, the only thing dividing their opinions being by how much.
Still, nobody really expected markets to get shut down prematurely for the day due to excess buying pressure. In the opening session, Sensex jumped to a plus-14 per cent gain, which was the biggest rise on opening since 1995. The scene in the debt market was no different with the benchmark GOI yield going down by 25 basis points to 6.27% -- the lower the yield, bigger the gains. This was the two-week low for the benchmark gilt. Unlike its equity counterpart, the debt market may be forgiven for the lack of exuberance, as later in the week the Reserve Bank of India (RBI) would be coming out with another round of G-sec auction.
Considering the way the markets swung, this would have been a good day for mutual fund investors. At least, even the worst of the funds could not have, after this day, shown a negative return the day after. One-day returns of the funds were slated for a jump if we had got to see the end of the day net asset values (NAV).
Large-cap funds would have been be the biggest beneficiaries from the skyrocketing stock markets. The gains of these funds would certainly have been higher than the mid- and small-cap funds. Thematic funds -- infrastructure-related funds would have seen quite a jump in their fortunes too. Infrastructure-related sectoral indices like Power, Metal, Realty, Oil & Gas, all went up by 20 per cent today.
Likewise, nothing would have been able to stop the rise of the banking funds as banking index had crossed the 20 per cent threshold in the morning itself. Though IT had gone up by almost 10 per cent, still companies like Infosys did not take a major part in the rally, which implies that IT funds would not have gone up like their equity diversified counterparts. Similar would have been the case of funds betting heavily on FMCG and healthcare.
Among debt funds, with yields again falling, gilt funds and funds betting on longer maturity debt, like medium- and long-term debt funds may have seen another round of positive gains, while the funds investing more in short-term paper would have seen muted gains.
In all, Monday has been quite an eventful day, even though it was curtailed to quite an extent, especially for mutual fund players it was a total disappointment. However, if more days like this are going to be in the offing in the future, investors would be able to make up for the immense loses they suffered in 2008, in no time at all.

Source: http://valueresearchonline.com/story/h2_storyview.asp?str=100234