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Cautious response to recent reform moves

Source : BUSINESS_STANDARD
Last Updated: Sun, Sep 23, 2012 04:41 hrs

It was yet another eventful week (September 14-20) for the markets, highlighted by the US Fed's quantitative easing announcement and the government's decision on more reforms. It announced a rise in diesel prices and followed it by opening foreign direct investments in multi-brand retail and aviation.

Further, the Reserve Bank of India reduced the Cash Reserve Ratio by 25 basis points, infusing liquidity to the tune of Rs 17,000 crore. The markets extended their gains in the wake of the slew of announcements, only to take a breather after the Trinamool Congress, in protest, decided to withdraw its support to the government.

All the fund managers were active for the duration under review.(Click here for tables)

A K PRABHAKAR
Sr VP (Equity Research),Anand Rathi Financial Services

Prabhakar churned his portfolio by adding several names such as Emami, Coromandel International, Cummins India, Sun Pharmaceuticals Industries and Pfizer. On the other hand, using the upswing during the week, he cleared off Indiabulls Real Estate, Grasim Industries, Aditya Birla Nuvo, Jammu and Kashmir Bank, Havells India, Power and Grid Corporation of India.

He sees the rally fizzling out as political uncertainty will halt the reform process. Selling pressure could start if the Nifty is not able to cross 5,600, leading which, we might see 5,400 or 5,350 by October. Whatever is done by the government so far is only a start and if a policy roll back or uncertainty prevails, then we can't avert a downgrade, he opined. His top holding currently includes Tata Coffee, Sun Pharmaceuticals Industries, Emami, Coromandel International and Cummins India.

Prabhakar's net worth is Rs 10.29 lakh, up 2.9 per cent.

KISHOR OSTWAL
CMD, CNI Research

Ostwal had no new picks but he squared off two of his biggest bets so far, Reliance Industries and State Bank of India, as he believed these stocks have run up sharply and some consolidation is now required. Century Textiles & Industries was another sell.

According to him, a 100-150 point correction on the Nifty looks possible before the futures & options settlement for the month, as traders have gone long and the market is overbought. Though some of the reforms will be reversed, he does not think it will ignite rating agencies for a downgrade.

Currently, BF Utilities, Bombay Dyeing & Manufacturing and Aban Offshore are his top picks. Ostwal's net worth is Rs 10.35 lakh, up 3.5 per cent.

NAVEEN FERNANDES
Fund Manager, Centrum Wealth

Fernandes added DLF and United Breweries through the week, while he sold off Polaris Financial Technology with a 11 per cent gain.

He believes the government's apparent commitment to continue the reform process will provide confidence to foreign institutional investors to step up buying Indian stocks. Also, he doesn't expect political instability to continue or mid-term polls happening. He added the government's recent announcements would certainly avoid a rating downgrade by international agencies.

As of now, BASF India, ITC, Karur Vysya Bank, United Breweries and Hindustan Zinc are his top five holdings. Fernandes' net worth is Rs 10.29 lakh, up 2.9 per cent.

SHARDUL KULKARNI
Head, Technical Research,Angel Broking

Kulkarni was very active during the period under review. He bought Bank of Baroda, Punjab National Bank, Lanco Infratech, Mahindra & Mahindra, Hindustan Oil Exploration Company, V-Guard Industries and Voltas. On the other hand, Delta Corp, Venkys (India), Chambal Fertilisers & Chemicals, Autoline Industries, Indian Oil Corporation and Hindustan Petroleum Corporation were cleared off, for gains of four to 12 per cent.

Kulkarni says on technical ground any decline should be used to buy for a primary target of 5,800 levels. "While a fuel price rise seems inevitable, the decisions regarding FDI in retail and aviation shows the government is persistent on reforms. We believe although a lot more needs to be done to bring a paradigm shift in sentiment, the recent steps are definitely in the right direction," he adds.

With this, his top five holdings are Shree Renuka Sugars, Punjab National Bank, Bank of Baroda, Lanco Infratech and Aditya Birla Nuvo. The net worth is Rs 10.57 lakh, up 5.7 per cent.

SACHIN SHAH
Fund Manager,Emkay Investment Managers

Shah continued to hold on to his portfolio and added Hathway Cable & Datacom, Apollo Tyres, Sundaram Finance and ITC to his holdings. He opines that the markets will hold on unless we have some adverse bad news from global or domestic markets. He believes rating agencies might wait for some more time to hear out all the announcements of the government and then may take a call on ratings.

His top holdings as of now include IDFC, Exide Industries, ICICI Bank, Astrazeneca Pharma India and Hathway Cable & Datacom. Shah's net worth is Rs 10.31 lakh, up 3.1 per cent.

TAHER BADSHAH
Sr VP and co-head equities,Motilal Oswal AMC - PMS

IRB Infrastructure Developers, Punjab National Bank, Sun TV Network and OnMobile Global are the stocks that were on the buy side for the week.

Badshah believes the correction after the rally will be modest. Also, that the government actions are a good beginning from the point of view of appeasing rating agencies, although follow-on initiatives are required.

His top five holdings are HDFC, HDFC Bank, Kotak Mahindra Bank, OnMobile Global and Tata Motors. Badshah's net worth is Rs 10.19 lakh, up 1.9 per cent.


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