'All eyes on RBI for a rate cut'

Last Updated: Sat, Mar 31, 2012 18:40 hrs

The markets witnessed volatile trades throughout the week under review, as they reacted to reports that the government would not target participatory notes (P-notes) under the new General Anti-Avoidance Rules (GAAR). Due to this, the markets slipped below 17,000 on subdued foreign institutional investment flows. The fund managers of Smart Portfolios’ Season 4 commented on the markets and their individual portfolios.

For the week, Rikesh Parikh’s net worth stands at Rs 1026,000, up 2.61 per cent; Ashish Mittal’s net worth is at Rs 1025,000, up 2.49 per cent; Alex Mathews’ net worth is at Rs 1027,000, up 2.72 per cent; and Ajay Parmar’s net worth totals Rs 1055,000, up 5.53 per cent.

Parikh carried out 11 transactions during the period. As the markets corrected, he exited fast moving consumer goods and pharma sectors. He switched to large caps, with allocation in Maruti, Reliance and Tata Consultancy Services (TCS), “as the markets have corrected to attractive levels”.

Commenting on his portfolio, he said he would increase exposure to rate-sensitive sectors, expecting a rate cut at the next Reserve Bank of India (RBI) meet. His current top holdings include TCS, Bharti Airtel, Maruti Suzuki, Housing Development Finance Corporation and Hindalco Industries.

VP Equity Strategies, Motilal Oswal Securities
Top Holdings Cost
price (Rs)
price (Rs)
 (Rs lakh)
Cadila Healthcare 716.94 720.00 0.47
Mahindra & Mahindra 701.00 684.00 0.41
Pidlite Industries 144.72 157.00 0.39
Bharti Airtel 347.57 324.00 0.32
Power Grid Corp of India 101.93 106.00 0.32
Total investments     3.30
Cash      6.88
Net worth     10.18

Mittal carried out only one transaction during the week, as he bought BASF India. The strategy behind the buy was to capitalise on the fundamentally strong MNC names which didn’t participate in the recent rally and which can reward decently from the current levels.

He expects the markets to recover significantly during the April-June quarter on account of a record level of food grain in the current crop year, a cut in benchmark rates by the RBI and a significant improvement in headline inflation numbers.

His top holdings include Balmer Lawrie & Company, Karur Vysya Bank, ITC, Bharat Electronics and Tide Water Oil Co (I).

Fund Manager, PMS, Centrum Wealth
Top Holdings Cost
price (Rs)
price (Rs)
(Rs lakh)
Balmer Lawrie & Company 618.00 542.00 0.70
Karur Vysya Bank 373.00 378.00 0.64
Bharat Electronics 1,583.00 1,550.00 0.62
ITC 199.00 219.00 0.60
Tide Water Oil Co(I) 6,751.00 7,336.00 0.61
Total investments     9.70
Cash      0.53
Net worth     10.23

During the week, Mathews took some fresh positions in Hindalco, L&T, Adani Enterprises and NBFCs, which he sees as value buys. His current top holdings are Aptech, ITC, Cairn India, IVRCL and L&T.

He said the outlook for markets was still wary, given the uncertainty persisting around GAAR and its impact on foreign funds, especially P-notes. He added fourth-quarter numbers were not going to show any firework and the CPI numbers were still at highs.

Head, Technical and Derivatives Research, Geojit BNP Paribas Financial Services
Top Holdings Cost
price (Rs)
price (Rs)
(Rs lakh)
Tech Mahindra 653.00 725.00 1.08
Oracle Fin Services 2,625.00 2,540.00 0.97
Infosys 2,956.00 2,827.00 0.93
Aptech 90.00 84.00 0.92
TCS 1,250.00 1168.00 0.76
Total investments     7.93
Cash      2.42
Net worth     10.35

Parmar remained inactive during the week. His current top holdings include L&T, Bajaj Auto, Allahabad Bank, IVRCL and Tree House Education and Accessories.

On being inactive, Parmar said he would wait till a clear trend emerged, before taking any action on either side. “We have to watch a lot of domestic data before the RBI meet in April. Also, we have to keep an eye on the crude price and the rupee,” he said.

Co-head, Investment Banking, Emkay Global
Top Holdings Cost
price (Rs)
price (Rs)
(Rs lakh)
Bajaj Finserv 640 601 0.6
Axis Bank 1,247.00 1,177.00 0.59
IRB Infrastructure 192.00 192.00 0.57
JP Associates 84.00 77.00 0.46
ICICI Bank 936.00 899.00 0.45
Total investments     9.15
Cash      1.57
Net worth     10.72

For Smart Portfolios please visit www.smartinvestor.business-standard.com  

More from Sify: