Transcript of Chat with Mr. U.R Rao ( Divisional Manager and Funds-in-charge, Canbank Mutual Fund. ) - MFs - Budget Expectations - (22/02/2002)
[04:27:10 PM] => Myiris: Welcome to the live chat session.
[04:30:20 PM] => Myiris: Our guest today is Mr. U.R. Rao, Divisional Manager and Funds-in-charge, Canbank Mutual Fund.
[04:31:05 PM] => Mr. U.R. Rao is the Divisional Manager and Funds-in-charge, Canbank Mutual Fund. At the time of this conversation / chat, Mr. Rao may or may not have positions in the stocks mentioned below, although holdings may change at any time. The views expressed by Mr. Rao 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. Rao, 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.
[04:31:23 PM] => 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.
[04:32:09 PM] => Lastly the views expressed by Mr. Rao 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.
[04:33:41 PM] => Myiris: Welcome to the chat session Mr. Rao.
[04:34:41 PM] => zaksait : Which shares will be good to hold post budget?
[05:05:05 PM] => URR : It is better to hold stocks that are budget neutral and that stocks that are likely to get benefit from the budget proposals. I am not supposed to speak on the specifics of the stocks ,but I feel Pharma , Banking , IT, Media and Auto stocks which are fundamentally good can be held till Budget. One has to decide the investment proposal post budget only after seeing the budget proposal of FM.
[05:07:15 PM] => Krish_ch : What are your expectations from the budget?
[05:07:31 PM] => URR : Big ticket disinvestment steps taken by the Govt recently has boasted the image of the govt. about their sincerity to push through their agenda of PSU disinvestment and to raise substantial funds. The international investing community , in particular , will look for genuine measures to cut deficit , sustain structural reforms and revive grassroots demand and nation reconstruction . Govt . has to decide on major issues such as administered interest rate on small savings, business restructuring , speed up PSU disinvestment , time bound finalisation of cyber laws & electronic fund transfers approvals, FDI approvals on infrastructure , further ease overseas investments -to and fro from India .etc.
[05:08:06 PM] => vinny_chadha : What is the prospects of Aptech? Why it is not traded these days any reasons , as it is going to loose this positive rally?
[05:08:16 PM] => URR : Aptech Ltd .under went merger and demerger and hence was/is in ND. After demerger there are 2 companies viz. Aptech Ltd. And Aptech Training Ltd. Training companies are passing through very testing period due to global recession and hence performance of all the companies have got affected .
[05:09:22 PM] => cccbsr : What is todays stock picks?
[05:10:59 PM] => URR : No comments.
[05:11:09 PM] => NG76 : What is your outlook on interest rates? Do you see the administered rates on small savings scheme being reduced?
[05:12:48 PM] => URR : Govt. and the Reserve Bank of India are having softer interest rate bias . Yield on Govt. securities have come down steadily and 10 year bench mark paper yield has touched as low as 7.18% recently . On the other hand small saving scheme interest rate is still on the higher side . Govt has the task to bridge the gap and they have to address this issue in the present budget proposal.
[05:16:32 PM] => cccbsr : What is the prospects of LIC Housing
[05:16:47 PM] => URR : Housing Finance Companies are doing well by and large .Govt. is also encouraging housing sector by extending good support in the budgetary proposal . It is one of the thrust area for the Govt.. Hence prospects for Housing Finance Companies continues to be good in the medium term.
[05:17:53 PM] => Myiris : We are experiencing technical difficulties. Please bear with us.
[05:18:05 PM] => RJana : Sir, Do you expect any major changes in the FDI/FII policy of the government?
[05:18:25 PM] => URR : Govt . has to take further steps to speed up clearance of FDI proposals . Formal introduction of 2 way fungibility for ADRs/GDR s is a welcome steps besides removal of restriction for FII investment in derivatives . Govt. may have to address the issue of FII investment in Key areas such as infrastructure etc
[05:18:34 PM] => MP : Can you suggest any good PSU stocks?
[05:18:48 PM] => URR : One can look at the fundamentally good stocks which are in the disinvestment list of the Govt. as we can see unlocking of values of the assets . With the privatisation of the PSU s , one can expect better operational efficiency in their functioning .
[05:19:02 PM] => Ibiza : What about Canbank MF?
[05:19:21 PM] => URR : Canbank Mutual Fund has recently launched CANLIDUID Scheme on 9th of Jan 2002 and has received good response from the public during the initial issue period of 2 days . The performance of the scheme is very good . Scheme has weekly dividend payout policy .
[05:26:38 PM] => Other open ended schemes of Canbank Mutual fund are doing well . Performance of some of the open ended Schemes such as CANCIGO, CANPREMIUM , CANTRIPLE, (balanced schemes ) CANGILT PGS (dedicated Gilt fund ) CANEXPO and CANEQUITY TAX SAVER under equity segment are performing well . Above schemes are top performing Schemes in their respective segments . CANGILT PGS scheme has declared 4 % dividend forth consecutive time since June 2001 (16% so far in the current year ) CANCIGO & CANPREIMIUM schemes also have maintained the track record of dividend pay out . The performance of the schemes could be seen from our Web. Site www.canbankmutual .com
[05:26:47 PM] => Prashant : Sir, When will equity funds start giving good returns?
[05:27:09 PM] => URR : Equity market started recovering now . US economy is has already shown some indication about recovery . Govt. initiating some more bold steps to speed up PSU disinvestment and reform process in the coming Budget , one can see some rally post budget .
[05:27:23 PM] => Shanmugam : How's Canliquid performing?
[05:27:47 PM] => URR : CANLIQUID performance is good both in terms of mobilisation of funds as well as returns The scheme has posted annualised return 10.29% based on the NAV of Rs. 10.987, as on 18.2.2002 under growth plan .
[05:28:00 PM] => Swati : What do you think for the market in a one-month horizon?
[05:28:14 PM] => URR : We expect the market to be good only . Worst is behind us . As stated earlier, positive thrust from the FM will trigger the market to rally .
[05:28:23 PM] => Rattles : Is the budget likely to give a boost to the markets?
[05:28:42 PM] => URR : FM may initiate some steps to hasten the infrastructure spending , restore fiscal health and disinvestment process will may trigger the market to respond positively.
[05:28:58 PM] => Amol : Sir, Are you getting in to PSU scrips in a major way? Regards
[05:29:33 PM] => URR : We have good amount of investment in PSU stocks which can be seen from the Scheme portfolio ( which is publised on monthly basis on our Website.
[05:29:42 PM] => Sharma_san : Whats the outlook on IT, Pharma?
[05:30:02 PM] => URR : Out look for both the sectors looks good.
[05:30:20 PM] => S_nair : Hello Sir, Which is the best performing scheme from Canbank? Do you have a gilt fund
[05:30:41 PM] => URR : Among the Balanced schemes we have CANTRIPLE ,CANPREMIUM & CANGANGA .Among the medium debt with marginal equity we have CANCIGO scheme and in the Gilt segment we have CANGILT PGS scheme.
[05:30:51 PM] => Raghu : Do you think debt funds can repeat the performance of last year?
[05:31:10 PM] => URR : As the yield on the G. securities has touched new low and 10 year bench mark yield has come recently to 7.18% levels . We are of the opinion that further downward movement in the yield is difficult to expect . Hence it is difficult to expect the gilt schemes to repeat the last year performance in the coming year .However 12 % growth rate is possible during the current year .
[05:31:22 PM] => Raghu : Are balanced funds the best option?
[05:31:36 PM] => URR : As the equity market is looking up , it may be correct time for the risk averse investors to choose balanced schemes to start with before entering high risk equity schemes .
[05:32:26 PM] => sunildvreddy : Will there be another boom after the budget?
[05:32:55 PM] => URR : It is very difficult to predict.
[05:33:10 PM] => MK23 : How do you rate the market as of now?
[05:33:25 PM] => URR : Market is good and worst is over I believe .
[05:33:35 PM] => N-Menon : How can MFs benefit from the budget?
[05:33:51 PM] => URR : We are expecting increase in investment limits in ELS Scheme from present level of Rs 10000/ to Rs 30000/ . Besides we expect continuation of tax free status for dividend income on investment in mutual fund units in the hands of investors .
[05:34:00 PM] => Bhavesh : Which IT scrips look good short-term?
[05:34:18 PM] => URR : It is better to stay invested in fundamentally sound first rung stocks .
[05:34:31 PM] => Ashwin : Which IT scrips look good short-term? Please suggest some good auto scrips for medium term?
[05:34:47 PM] => URR : I am not supposed to recommend scrips for investment .sorry.
[05:35:01 PM] => Naren : Is the rally in PSU scrips likely to last?
[05:35:24 PM] => URR : Govt . has shown their determination to push through the Reform process and disinvestment in PSU stocks . Hence there will be unlocking of value of the assets .Hence the trend will continue for some more time .
[05:35:39 PM] => ShenaiN : When do you see a reversal in the interest rate trend?
[05:35:57 PM] => URR : I feel the present rally in the Govt. securities may not be sustainable . In the meanwhile govt. has to initiate steps to reduce the interest rate in the small savings schemes .
[05:36:07 PM] => Jose91 : How far do you think that the VRS scheme proposed by the government to cut excess flab will succeed?
[05:36:25 PM] => URR : VRS scheme in the Banking sector was big success . It is very difficult to say with definiteness whether the VRS scheme in the Govt department may be success or not as several issues are to be discussed to find the correct position .
[05:36:37 PM] => Sumit : Sir, what percentage of actual budget promises is realised by the next year?
[05:37:29 PM] => URR : As regards disinvestment of PSU , Govt is able to realise 50% of the targeted amount . Fiscal deficit they have not able to contain . Direct and indirect taxation collections are less than the expected levels .Reform process they are able to push through inspite of opposition .
[05:37:37 PM] => Parekh : What is the next support level for sensex?
[05:37:47 PM] => URR : I think next support level for SENSEX is 3550.
[05:37:58 PM] => Reddy : Hello sir, What's your opinion about pension funds?
[05:38:11 PM] => URR : I feel Govt is keen to push through the pension reforms . There is an expectation that the Govt. to permit investment of pension funds ( part of the funds )in stock market .
[05:38:24 PM] => Venkat : Can you suggest a good children's scheme to put money in? Does Canbank have any?
[05:38:46 PM] => URR : Canbank has no children,s scheme . You can consider on merits investment in some of our best performing BALANCED SCHEMES OR CANGILT PGS ( Please refer Offer documents before investment )
[05:39:09 PM] => Manish : Is the economy going up or down!?
[05:39:34 PM] => URR : Fiscal deficit is a matter of concern . IIP numbers are not encouraging . However Feb 2002 numbers shows some sign of recovery . FM has very difficult task in the present budget to put the economy in the growth phase .
[05:39:46 PM] => AR : Is it the right time to move from banks to equities?
[05:40:07 PM] => URR : Equity market is looking up . Expecting budget to be good , the market may consolidate and show some rally post budget . It is better for the small investors to select Mutual fund route for investment in market rather than direct investment . Investors to correct advise and select right fund and right type of scheme considering their RISK vs REWARD appetite.
[05:45:59 PM] => Sudhir : Of late Canbank is aggressive in Debt funds. Specifically the distribution in GILT Scheme. Is there any strategy for income distribution? What is the future for debt funds? Are you coming out with a DEBT FUND?
[05:46:39 PM] => URR : Thanks for the compliment . Performance of Cangilt PGS and other balanced schemes are good . Canbank policy is generate income and to distribute to the unit holders . Cangilt PGS has distributed 4% dividend forth time since June 2001 and the total payout during the current year is 16%. We have aggressive strategy to churn the portfolio and book profits at every rally . We are very strong in debt fund management . Canbank mutual fund was the first to launch Cangilt scheme way back in the year 1987 and was managing huge corpus during the initial period . Cangilt PGS scheme was launched in Dec 1999 and the response for the scheme is good . We have plans to launch debt scheme shortly .
[05:46:57 PM] => R raja : what measures do you feel that government should give in the next budget to spur the mf sector?
[05:47:18 PM] => URR : I have already explained that the MF industry is asking for increase in investment limits under ELSS and continuation of tax free dividend for some more time.
[05:50:01 PM] => Myiris : That�s the end of the chat session.
[05:50:08 PM] => Myiris : Thank you all for logging on.
[05:50:18 PM] => Myiris : We apologise for the delay experienced during the chat
[05:50:29 PM] => Myiris : Our thanks to Mr. U R Rao for taking time off to come on myiris.com chatmasala.
[05:50:36 PM] => Myiris : Hope to see you all again tomorrow.
[05:50:55 PM] => Myiris : Till then it is bye from us.
