Fund managers see S&P action as a blessing in disguise

Markets remained subdued between 18th and 25th of this month on account of two negative news, namely Macquarie’s Asia hedge fund exiting its short positions in Indian single stock futures and Standard & Poor’s (S&P) lowering India’s credit ratings to ‘negative’ from ‘stable’. Meanwhile, three of the four fund managers of Smart Portfolios Season 4 remained active.

RIKESH PARIKH
VP (equity strategies), Motilal Oswal Securities
Parikh carried out 13 transactions during the period. He bought Infrastructure Development Finance Company (IDFC), Petronet LNG, HCL Technologies and Idea Cellular, whereas he exited Maruti Suzuki India, HDFC and GVK Power and Infrastructure with profits in the range of two to 10 per cent. However, he booked losses in Bharti Airtel and Tata Consultancy Services.

Parikh prefers to look at the S&P action as a blessing in disguise, as this will increase pressure on the government to accelerate reforms. He says he would prefer to increase exposure in pharma and will gradually take positions in the banking and auto sectors.
 

RIKESH PARIKH
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Allahabad Bank	188.80	164.45	0.37
IDFC	132.10	119.65	0.36
Ipca Laboratories	345.86	350.25	0.35
PFC	184.09	174.65	0.35
Hindalco Industries	130.09	116.25	0.35
Total investments			3.88
Cash			6.16
Net worth			10.04

His current top holdings include Allahabad Bank, IDFC, Hindalco Industries, Ipca Laboratories and Power Finance Corporation. Parikhs’s net worth is at Rs 10.04 lakh, up 0.41 per cent.

ASHISH MITTAL
Fund Manager (PMS), Centrum Wealth
Mittal carried out 17 transactions. He exited BASF India, Bombay Burmah Trading Corporation and ITC with gains of 22-32 per cent. He bought shares in companies like Dhanlaxmi Bank, Unichem Laboratories and Clariant Chemicals (India).

Mittal says the S&P downgrade threat is already discounted by the market, as there was no panic selling by foreign institutional investors (FIIs) or domestic institutional investors (DIIs). He views the development as a positive, as the pressure on the government would further increase to liberalise FII and foreign direct investment flows into the country. Some of the sectors he is watching out for include old private sector banks, minerals and energy and mid-cap pharma scrips.
 

ASHISH MITTAL
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Tide Water Oil Co(I)	6,988.28	7,407.80	0.74
Balmer Lawrie & Company	618.48	554.70	0.72
Bombay Burmah Trading Corp	490.42	565.25	0.71
Karur Vysya Bank	372.59	400.75	0.68
JB Chemicals & Pharama	71.90	67.90	0.68
Total investments			8.89
Cash			1.49
Net worth			10.38

His top holdings include Tide Water Oil Co (I), Balmer Lawrie & Co, Karur Vysya Bank, J B Chemicals & Pharmaceuti-cals and Bombay Burmah Trading Corporation. Mittal’s net worth stands at Rs 10.38 lakh, up 3.84 per cent.

ALEX MATHEWS
Head (technical and derivatives research), Geojit BNP Paribas Financial Services
Mathews carried out six transactions. He exited Cairn India with a nine per cent loss. Meanwhile, he bought Escorts, Wockhardt, Strides Arcolab, MRF and Century Textiles and Industries. Cement, pharma and fast moving consumer goods are some of the themes he would watch out for. He says, “S&P has raised a red flag, which is a warning to go cautiously, and hence, the markets have not reacted adversely.”
 

ALEX MATHEWS
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Aptech	90.23	76.95	0.85
Escorts	83.91	73.25	0.73
Hindustan Unilever	410.47	414.70	0.41
Tech Mahindra	686.01	713.75	0.36
MRF	11318.02	11231.25	0.34
Total investments			6.91
Cash			3.04
Net worth			9.95

His current top holdings include Aptech, Escorts, Hindustan Unilever, Tech Mahindra and MRF. Mathews’ net worth totals Rs 9.95 lakh, down 0.45 per cent.

AJAY PARMAR
Co-head (investment banking), Emkay Global
Parmar didn’t carry out a transaction during the week. His current top holdings include IVRCL, KSK Energy Ventures, Nestle India, State Bank of India and Indiabulls Financial Services.
 

AJAY PARMAR
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
IVRCL	61.10	63.55	0.63
KSK Energy Ventures	59.45	62.45	0.50
Nestle India	4715.31	4735.15	0.47
Indiabulls Financial Services	219.50	225.00	0.45
SBI	2134.07	2162.35	0.43
Total investments			8.54
Cash			1.57
Net worth			10.11

Parmar views the S&P downgrade threat to have limited impact. Meanwhile, issues like slower gross domestic product growth, dismal corporate results, higher inflation, policy paralysis and negative surprises from the government will bring the markets down. He expects defensive counters to be in the spotlight. Parmar’s net worth is valued at Rs 10.11 lakh, up 1.16 per cent.

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