Market Voice: Lalit Nambiar, UTI AMC

'India can't escape unscathed from euro zone crisis'

Lalit Nambiar, fund manager & head (research), UTI AMC, spoke to Puneet Wadhwa on the euro zone crisis and the problems back home. Edited excerpts:

The problems in the euro zone resurfaced this week and took a toll on global markets. Are these concerns overdone?
This is difficult to say. But, from whatever we can gather, there is likely to be more pain in that region. With global markets now more closely linked, India cannot completely escape unscathed when there are upheavals.

However, when some modicum of calm returns, it will help to remember the India growth engine is driven by domestic consumption and is on relatively stronger ground.

How have you churned your portfolio in the past three months? Are you fully invested at current levels? Do you see any stock/sector worthy of investment in the current scenario?
We have moved to a more defensive stance. Our primary mandate is to be invested in equity, so we remain invested for close to 91-95 per cent across schemes.

We have lowered risk by reducing the beta profile of our stock portfolio. Selective bottom-up buying in sectors such as consumer staples, pharmaceuticals and telecom may be considered for the long term.

Are you seeing an increased redemption pressure from retail investors, given the volatility and weak markets?
Our equity assets under management are predominantly of retail origin and there is no significant redemption pressure at our end.

Mutual funds (MFs) have been divesting from equity markets. How do you read into it? Do you expect the trend to reverse anytime soon?
The mood is decidedly cautious. In the absence of any clear trend in global markets, any change of mood is tentative and, needless to say, fickle, as we have been seeing over the past few weeks.

Market participants, whether domestic MFs or foreign institutional investors, are all a bit queasy, shifting their stance with each latest wiggle in economic data or geopolitical news flow. One can only be sure that the volatility is here to stay for some time, across all asset classes.