India's Equity Fund Managers Step Up Buying as Uncertainties Hover... | Next Level Education
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India’s Equity Fund Managers Step Up Buying as Uncertainties Hover…

India’s Equity Fund Managers Step Up Buying as Uncertainties Hover…

Till 21st November, equity schemes cornered shares worth over Rs 8,000 cr following their ‘buy-on-dips’ strategies…

India’s equity fund managers, who manage assets worth Rs 5 Lac Crores, have made the most of the ongoing turmoil in Indian shares. Not deviating from their over a year long strategy of ‘buy on dips’, they appear to be exhausting their cash holdings by pumping money in falling stocks.

Stocks like Tata Motors, Infosys, Tata Consultancy Services, Maruti Suzuki, ACC, Ambuja Cements, ICICI Bank, Kotak Mahindra Bank, Asian Paints and State Bank of India have emerged among the top favourites.

The buying spree is one of the strongest in nearly one-and-a-half-years. The net investment till 21 November stands at Rs 8,024 Crores. Thus far this month, 30-share-index or Sensex has lost over 2,000 points or 7.4%— slipping below the 26,000 mark. While Nifty50 is trading below 8,000.

 There have been trading sessions wherein fund managers pumped a whopping Rs 1,700 Crores too — which is quite a rare event in recent months.

US Elections’ outcome with winning added with move by the Indian government have put immense pressure on the stock markets. According to fund managers, these are uncertain times and which should be taken as buying opportunities.

S. Naren, chief investment officer (CIO) of ICICI Prudential Mutual Fund, says: “The global  are unsettled on account of the ambiguity surrounding the new economic policies that will be pursued by the winning US Presidential candidate. Hence, we believe Indian equity could remain volatile in the next few weeks providing several buying opportunities.”

Further, he adds, “Owing to steps, the beneficial effect of lower interest rates and lower cost of capital will show up in construction and infrastructure projects probably leading to a big capex cycle and economic boom, over the course of next three years. We are now more positive on our equity outlook for next 2-3 years and recommend investors to consider spreading their lump sum investments over the next few weeks across the large cap, multi cap and infrastructure funds.”

Fund managers are geared up for the continuation of volatility in the to pick stocks at lower prices. They also advise investors to use corrections as opportunities to purchase additional units of mutual funds.

Sunil Singhania, CIO – equities, Reliance Nippon Mutual Fund, says, “In the near term there will be volatility in the markets. Investors should stay invested and use the corrections as opportunities to purchase additional units. Due to the demonetising of Rs. 500 and Rs. 1000 currency notes, in near term, there will be a slowdown in consumption which will be reflected in numbers next month.”

Agrees Navneet Munot, CIO of SBI Mutual Fund. He says, “are worried that the massive crackdown on black economy along with GST implementation could create huge pains in the near term. Discretionary spending and sectors thriving on demand from cash in the parallel economy will bear the brunt from these disruptions. However, we believe that corrections due to these concerns offer opportunity to investors as the developments are extremely positive from a structural long-term perspective.”

Sector executives say that investors are pouring in an additional sum of equity as well as debt. There is no panic as yet for redemptions. It is worth to note that equity segment of  gets nearly Rs. 3,500 Crores of sticky net inflow through systematic investment plan (SIP) which is a big confidence booster for fund managers to buy stocks. Any additional purchases above it is a bonus for them to invest money in shares.

With four more trading sessions to go in November, it is expected that net investment will decisively cross Rs. 10,000 Crores mark. Last it was in August 2015 that net investment in equity had surpassed this mark to Rs. 10,533 Crores.

Read the Main Article here: http://www.business-standard.com/article/markets/india-s-equity-fund-managers-step-up-buying-as-uncertainties-hover-116112400725_1.html

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