'Fund managers remain optimistic about impending reforms'

Markets remained flat for the major part of the week on account of profit booking after the Comptroller and Auditor General of India’s report was tabled in Parliament on allocation of coal blocks, aviation and mega power projects, which are estimated to have given huge undue benefits to select companies. Also, the country’s annual consumer price inflation slowed slightly to 9.86 per cent in July, helped by a drop in petrol prices.

In the global markets,Japan reported a wider-than-expected trade deficit in July as Europe’s sovereign debt crisis and a slowdown in China dragged down exports and higher oil prices boosted imports.However, the sentiment later improved after the Fed hinted the possibility of a third round of quantitative easing. Two of the four fund managers of Smart Portfolios Season 4 remained active from August 17- August 23

SACHIN SHAH
Fund Manager, Emkay
Shah carried out several transactions on the buy side during the period under review. KPIT Cummins Infosystems, Cipla, Karur Vysya Bank, Zee Entertainment Enterprises and Divi’s Laboratories were added to his portfolio.

Shah believes that reforms are the need of the hour, mainly due to the economic situation in the country. However, political compulsions are making it difficult for the government to proceed in this direction, and delaying the much-required steps to be taken. In the markets, he sees a case of selective profit booking in some stocks, especially those which have run up but haven’t delivered good results and where the business outlook is not so great. His top holdings currently include ICICI Bank, Divi’s Laboratories,Mahindra & Mahindra, LIC Housing Finance and Havells India. Shah’s net worth is valued at Rs 9.47 lakh, down 5.29 per cent.

RIKESH PARIKH
VP (equity strategies),Motilal Oswal Securities
Parikh was active through the week under consideration. His value picks were Power Finance Corporation, Emami, Bharat Heavy Electricals and Housing Development Finance Corporation. Meanwhile, he exited Infosys with a nine per cent gain.

Parikh is optimistic about the markets in general as he says some of the pending bills require only Cabinet approval, even though it appears challenging in the current state of affairs.If approved it will add fuel to the current upmove and kick-start the investment environment in the economy. Adding to this, markets have stepped out of its short term trading range after a long time. If these levels sustain, the markets could test higher levels. His current top holdings include Engineers India, JSW Energy, Oberoi Realty, Hindalco Industries and Power Finance Corporation. Parikh’s net worth is at Rs 10.22 lakh, up 2.19 per cent.

ASHISH MITTAL
Fund Manager (PMS), Centrum Wealth
Mittal remained inactive during the week. His top holdings include Balmer Lawrie & Company, Karur Vysya Bank, Tide Water Oil Co (I), Coal India and Cairn India.

Mittal believes that with de-growth in both foreign direct investment inflows and exports and the global rating agencies hinting at a ratings downgrade, any slippage on implementation of pending reform measures would have disastrous consequences on both the economy and equity markets as foreign institutional investors would start pulling out their investments. Such a pullout would lead to a crash in the rupee’s exchange rate and increase the stress on corporates, which have taken substantial foreign loans. Also, larger foreign loans will be required to finance the current account deficit. However, he advises booking profits for select individual stocks based on stress on respective sectors or on respective businesses due to leveraging conditions.

Mittal’s net worth stands at Rs 10.79 lakh, up 7.82 per cent.

ALEX MATHEWS
Head (technical and derivatives research),Geojit BNP Paribas Financial Services
There were no transactions during the week. His top holdings include CRISIL, Timken India, Tata Coffee, CMC and Mindtree. Mathews’ net worth totals Rs 9.34 lakh, down 6.62 per cent.

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