[04:29:12 PM] => Myiris : Welcome to the live chat session at myiris.com

[04:31:06 PM] => Myiris:Mr Milind Nandurkar, Senior Fund Manager - Fixed Income, Sun F&C Mutual Fund will be joining us shortly

[04:32:43 PM] => DISCLAIMER:
[04:33:03 PM] => Mr. Milind Nandurkar, is the Senior Fund Manager - Fixed Income at Sun F&C Mutual Fund. At the time of this conversation / chat, Mr. Nandurkar may or may not have positions in the stocks mentioned below, although holdings may change at any time.

[04:35:32 PM] => The views expressed by Mr. Milind Nandurkar is based upon information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such. Mr. Nandurkar, his company and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed. None of the information contained herein constitutes, or is intended to constitute a recommendation of any particular security or trading strategy or a determination that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.

[04:36:22 PM] => Lastly the views expressed by Mr. Nandurkar have no bearing whatsoever with that of IRIS Ltd. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website www.myiris.com.

[04:41:47 PM] => Myiris : Welcome to the chat session, Mr. Nandurkar

[04:44:22 PM] => Santosh_sn : The yield on the benchmark 10-year security rose to 9.80% from 9.12%. A fall of over Rs 4 in a week. This fall was preceded with a significant fall in the value of the rupee. The rupee depreciated to Rs.47.82 levels towards the end of the week. The rupee, this means has depreciated by almost about 2.5% from the beginning of the year. Is the panic real? Where are we headed?
[04:45:45 PM] => MN: We are facing an unprecedented event risk in the form of the terrorist attack evolving into a long drawn full scale war. It is very difficult for the market to judge the price levels in the face of such an event. Hence, the markets react in panic. We have to however look at the situation in a more mature way to find out where the market would settle or which way would it go. Initial panic is not unexpected and panic can last only for a short duration of time.
[04:47:27 PM] => We believe that some of the worst fears of the war have already been discounted by the market. The RBI is stepping in to stabilize the market. The Rupee today touched 48.42 to a dollar before RBI intervened through PSU banks. The Rupee regained most of the ground and closed near 47.85. The bond market fell across maturities in response to the falling rupee but later recovered to Saturday close level as the RBI announced its intention to purchase Government Securities in Open Market Operations, thereby providing exit route to those who want to sell in desperation. The inter bank call money rate was stable at round 7.25%. Thus we feel that though the market can remain volatile in the immediate future, the fundamentals would eventually take over to stabilize the market.

[04:48:58 PM] => Partho : Considering that an attack on Afghanistan is imminent what is your outlook on the rupee front? Is oil prices going to be the most important determinant of the rupee?
[04:50:45 PM] => MN: The dollar has weakened against all other major currencies of the world which reduces pressure on the rupee on REER basis. The oil prices could pose a worry if the Arab world would get drawn into the conflict. Given that the OPEC has assured stable supplies of oil we may not see a big flair in the oil prices. However, some appreciation in the prices may be there to discount for the war like situation at present.
[04:51:40 PM] => The rupee may continue to be under pressure but given the healthy forex reserves the RBI is expected to strongly defend the rupee.

[04:53:48 PM] => Sanjay56: A number of analysts predict that worldwide there will be a shift from equities to fixed income is it true? Is debt back in demand?
[04:54:47 PM] => MN: Situations like the one prevailing today always resulting flight of capital to safety. Fixed Income being a safer mode of investment, the investors prefer debt in the times of crisis. Also, Central Banks around the world are expected to cut interest rates in order to boost the world economy which lends bullish sentiments to the global debt markets.

[04:55:52 PM] => Oswal : What steps India should take with an intention to stabilise the markets?
[04:57:32 PM] => MN: The RBI has already announced that it will intervene the Foreign Exchange Market if need be to stabilize the rupee. It has also stated that it continues with the stance of maintaining stable interest rates and easy liquidity. The RBI is expected to intervene in the forex market without having to act on the money market side. In the fixed income market the RBI has already announced OMO auctions to purchase Government securities. These steps are expected to stabilize the forex and debt market.

[05:01:57 PM] => Neyham : India's main concerns are rupee, oil and Fiis. What do you expect to happen to each of these?
[05:03:01 PM] => MN: See earlier replies

[05:03:48 PM] => Priya : August saw heavy outflows from Liquid funds-Amfi figures show it. After the US crisis do you expect money to flow back into liquid funds again?
[05:04:23 PM] => MN: Yes

[05:05:19 PM] => Suchita34 : What needs to be done to prevent investor panic and possibly a global recession?
[05:06:35 PM] => MN:The investor has to look at what was his investment goal and investment horizon at the time of investment. The event risk could impart volatility in the financial markets over a short period of time but ultimately if investment is of reasonably long tenor than the fundamentals would take over and investor can avoid making exceptional losses.
[05:08:04 PM] => The global economies are slowing down and the recent events do not help the Government around the world in quickly reviving the economies. Hence the investor confidence may remain low for some time to come.

[05:09:44 PM] => Shila : What do u see about the bond market?
[05:09:58 PM] => MN : See earlier replies.

[05:11:28 PM] => Rudy : Whats the outlook on interest rates? Do you expect the Fed to prepone the interest rate cut and India to follow?
[05:12:56 PM] => MN : The Fed and other Central banks are expected to cut interest rates. The cuts may come sooner than later but the timing of the interest rate cuts cannot be predicted. On the domestic front RBI maintains easy liquidity and stable rates policy.

[05:16:52 PM] => Blanche : Is the Fixed Income Party Over - now can we get realistic?
[05:17:47 PM] => MN : The party has surely got interrupted. We really cannot term any level of interest rates as realistic or unrealistic. For the present, the 10-year Government yields today sea-sawed between 10% and 9.60%. This is extreme volatility. When the market returns to normalcy, the rates are likely to remain benign.

[05:21:08 PM] => Kartikeyan: All you fund guys were talking lowering of interest rates - on what grounds given our economy were you propagating that - Reminds me of a time when all you fund managers went tom-tomming about sectoral funds and how the sensex will breach 7000 . We all know what happened - Now DEBT is all set to repeat that.
[05:22:09 PM] => MN : Event risks can never be predicted. We always advise investors to take stock of the risk involved more than what returns are expected.

[05:23:25 PM] => Jajoo: This is a very fundamental question - when all currencies are appreciating against the dollar why are we depreciating against it. Is it just speculative or are there any fundamentals such as fiscal situation etc..behind this fall.
[05:24:48 PM] => MN : There seems to dichotomy here. One can talk about correction of rupee as it was over valued on REER basis. The timing of this correction is normally depended on the market sentiments and depreciation of the currency generally happens only when the sentiments are nervous. Thus though dollar is losing ground against other currencies we are seeing realignment of the rupee value.

[05:25:54 PM] => Ankitshah_99: Is it advisable to invest in debt fund at this point of time?
[05:26:16 PM] => MN :Given that the market is extremely volatile as of now it is advisable to invest in the liquid funds for the time being.

[05:27:05 PM] => Kamleshm: What is the likely impact of this heinous crime on humanity on our Indian economy. First of all should it impact us (so what if we are global) haven't we been facing terrorism in our backyard for so many years - we have still grown at an average of 5.5% !!!
[05:30:16 PM] => MN : Terrorism in itself does not slow down the growth. The world is worried about the consequences of the US backlash and the possibility of an emergence of war like situation.

[05:33:56 PM] => p_bunty2000: How do you see the debt market performing in the coming days. Is it advisable to shift portfolios to liquid funds temporarily?
[05:34:23 PM] => MN : It is not advisable to redeem from debt funds in a panic situation like this. We have seen a recovery of more than one rupee today itself from the lows seen during the day. Some support and signaling by RBI can recover lot of losses suffered in the prices today.

[05:34:45 PM] => p_bunty2000: Do u think that because of the uncertainty the debt market will fall to even greater heights and that investments r best avoided now. Further should one shift over to liquid funds and book profits or loss accordingly now?
[05:35:49 PM] => MN : See earlier replies

[05:36:12 PM] => Janki: As a fund manager is it prudent to time the markets - do you?
[05:36:33 PM] => MN : It is very difficult to time the market. We work on a structured investment approach whereby a portfolio is designed so as to reflect our views on the fundamentals. Event risks sometimes tend to destabilize the markets and one may be forced to change the view on fundamentals and hence the portfolios may change accordingly.

[05:37:12 PM] => p_bunty2000: Would Sun F&C declare a dividend this time. And how much are you expecting. Is it possible for any fund house to give any dividend at this uncertain time?
[05:37:38 PM] => MN : A decision on the dividend would be taken shortly. The trustees are likely to approve some dividend distribution in next couple of weeks provided the market conditions permit.

[05:40:26 PM] => Ram_Chouhan : Will Badla money enter the MF Industry ?
[05:41:04 PM] => MN : A lot of the badla money has already been invested in the liquid/bond funds.

[05:42:49 PM] => Yogesh : Does the current trend of increased fixed income mobilizations indicate a disinterest in equities?
[05:43:04 PM] => MN : It indicates flight to safety.

[05:44:37 PM] => Murthy : Will the entry of pension funds benefit the debt market? How?
[05:45:14 PM] => MN : Yes. Pension Funds are long term investors and can take contrarian views. They also invest in long term securities. This helps to deepen the debt market.

[06:02:08 PM] => Ayan: What is the structure of you bond fund, Since I am a investor in it. Also what you expect Nav for today. Friday NAV was 14.11.
[06:02:30 PM] => MN : Currently we have invested about 70% in corporate, 20% in Govt securities and 10% in cash. The Bond Fund NAV is likely to see a major fall today.

[06:02:49 PM] => Manishm: Do you see India getting into hot pursuit and probably engaging Pakistan - the likely impact if any?
[06:03:01 PM] => MN : Not likely.

[06:03:15 PM] => ankitshah_99: What is the average duration in your debt portfolio?
[06:03:29 PM] => MN : Approximately 3years.

[06:04:14 PM] => Raisy12: As you said that RBI has somewhat arrested the fall in the Bond Market. Do you foresee NAVs of Bond funds to be curtailed or do you see a further fall. What steps you as a fund manager (we know that situations are beyond any fund manager control) would be taking to control the fall in NAVs of you debt fund?
[06:04:34 PM] => MN : Despite RBI steps the prices of securities are much below the Friday closing prices. Hence the NAVs of Bond Funds are likely to suffer largish losses today. Going forward we would aim to further reduce the interest rate risk portfolio.

[06:13:03 PM] => Newsflash : Fed announces 50 basis points rate cut...for more details log on to www.myiris.com

[06:14:12 PM] => Susane : What according to you could be a positive news for the debt markets at this point of time ?
[06:14:59 PM] => MN : Rate cut announcements, stable oil prices, stable rupee / dollar market.

[06:16:21 PM] => Ahujalaw : How will movement in dollar impact debt market?
[06:16:37 PM] => MN : If the volatility does not persist then there would be no impact on the debt market. RBI is expected to intervene in the forex market directly instead of using the money market route. However, prolonged volatility, though not expected, can create flutter in the debt markets as well.

[06:17:16 PM] => Harish : Why is the dollar gaining strength in India when it is weakening worldwide?
[06:17:30 PM] => MN : See earlier reply.

[06:17:54 PM] => Investor : Sir Do you see a good time to invest in Gilt fund now? Your Advise for Investing(as an example) 100 Rs. as and when?
[06:18:18 PM] => MN : You have to be smart trader and should have heart to see volatile price movements.

[06:19:01 PM] => Ankit : Do you think that govt. will hike the interest rate ? If your answer is no. Why?
[06:19:54 PM] => MN : NO. Hike in interest rates can only be to defend currency. We expect RBI to use the forex route to defend currency rather than the money market route. Domestic liquidity is good and credit pick up is low. Also the interest rates round the world are expected to be cut. FED has announced 0.5% cut in its key rate sometime back.

[06:20:39 PM] => Karan : Given the fact that the Income Funds have given returns > 18%and the recent happenings in the world, should a small investor disinvest from Income Funds and put money in a more safer Liquid Fund?? and then reinvest again once the market stabilizes!!!
[06:22:40 PM] => MN : See earlier replies.

[06:23:05 PM] => Arjun : Over the happenings of the last one week, should an Investor book profits from the gain that he's had from Income Funds or stay put?
[06:23:20 PM] => MN : See earlier replies.