Fund managers optimistic, but cautious

Cautious optimism was the mood of the country’s top fund managers at a short panel discussion at the Business Standard Awards ceremony.

Reliance Mutual Fund Head of Equities Madhu Sudan Kela did not want to predict the Sensex or Nifty value in the next 12 months, but said the next decade will belong to India. “One year is a very short period of time, but people who invest in equity market in the next decade will reap the benefits.”

The BSE Sensex and NSE Nifty have almost doubled from the low of March 2009. But, the key indices have moved in a very narrow range in the last few months. The Sensex and Nifty are trading at a price-earning ratio of 21 times based on 2008-09 earnings and 16-17 times on 2009-10 earnings. There has also been concern over the rising interest rates which could hurt the corporate earnings in the next financial year.

Nilesh Shah, deputy managing director of ICICI Prudential Mutual Fund, said the market players have always been proved wrong in predicting the market. “In 2007, the market doubled, again in 2009 it was the same,” said Shah.

Sukumar Rajah, chief investment officer at Templeton Mutual Fund, however, was more pessimistic. “I do not have much hope from the stock market in the next one year,” he said, adding that the stock market is like a voting machine in the short term and a weighing machine in the long term.

Kela, Shah and Sukumar were Business Standard Fund Managers of the Year in the previous years.

IDFC Mutual Fund’s Kenneth Andrade was the only one to give some direction towards the returns from the stock market in the next one year. “We will make reasonable money in the next one year. The returns would be in double digits,” said Andrade, who is IDFC’s Fund Manager and the winner of BS Fund Manager (Equity) of the Year.

The other winner in the Best Fund Manager (Debt) was Ashish Kumar of LIC Mutual Fund.