[04:29:53 PM] => Welcome to the live chat session, Mr Anup Maheshwari will be joining us very shortly
[04:55:54 PM] => Disclaimer
[04:56:08 PM] => DISCLAIMER
[04:56:37 PM] => Mr. Anup Maheshwari is the Fund Manager at DSP Merrill Lynch Investment Managers Ltd. At the time of this conversation / chat, Mr. Maheshwari may or may not have positions in the stocks mentioned below , although holdings may change at any time.
[04:56:51 PM] => The views expressed by Mr. Anup Maheshwari 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. Maheshwari, 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.
[04:57:07 PM] => Lastly the views expressed by Mr. Maheshwari 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.
[04:59:43 PM] => Welcome to the live chat session Mr Maheshwari

[05:00:04 PM] => Miku25 :Sir,What is your view on interest rate softening. Economy has ample cash - do you feel RBI will take further action to pull down the Bank rate?
[05:00:32 PM] => AM: we continue to believe that interest rates have a stable/declining bias. With no sign of any investment led demand in the economy, free liquidity should continue to remain strong. In this scenario, we would expect some action from the RBI on the bank rate over the coming quarter.

[05:01:26 PM] => Jajoo :Given the good monsoons (if mumbai rains are anything to go buy) how soon do you expect an economic revival in the country. What would you forecast our GDP growth rate . Will the growth come from the manufacturing or services sector ?
[05:02:10 PM] => AM: It is difficult to forecast when the economy would revive. Good monsoon should help boost disposable income in the agricultural sector. This should also have some positive rub-off on the Industrial sector. Our forecast on GDP growth continues to stand at 6%. With the service sector now constituting over 45% of GDP, this sector would correspondingly contribute the maximum in GDP growth.

[05:03:30 PM] => Parthiv_dalal123 :aren't brewery stocks also a part of the FMCG sector? why don't they get similar valuations? wouldn't you have a sizable exposure to such stocks in your portfolio?
[05:03:56 PM] => AM: While brewery stocks are part of the FMCG sector, they have been effected by legislative/company specific issues. This has resulted in sub-par profitability and low earnings predictability in a number of brewery stocks. This is the main reason for their valuation differential v/s the FMCG sector.

[05:05:44 PM] => msaxena :Are the Bulls finally LYNCHED ? Just joking but seriously do you expect the sensex to fall anymore than 3100. Aren\'t the market players acting more on
[05:05:58 PM] => sentiments rather than fundamentals
[05:06:29 PM] => AM: At current levels, the risk-reward of equities is in favour of investing. If we can look beyond the short term technical noise in the market, the valuations of the market look very attractive. On an earnings yield basis, the stock market is at an all time low. With overall returns on capital of the Index constituents expected to improve, we see no reason why the Equity market should not deliver a reasonable return over the next 12 months.

[05:07:20 PM] => Pawannahar : Sir, firstly congratulations on your new assignment. What is your opinion on the future of index funds, viz-a-vis actively managed portfolios/ funds. Is it possible to consistently outperform the index/ market?
[05:07:58 PM] => AM: As a fund manager, my basic value add to the investor is to outperform the benchmark on a consistent basis. If an Index fund were to outperform our actively managed portfolio over a reasonable period of time, I would be out of a job

[05:08:27 PM] => kvenkat74 :when can the equity markets expect to pick up.? Secondly lending in call (for money market fund) has been revised as per rbi so is the performance of money market fund likely to get affected.?
[05:09:00 PM] => AM: Money market mutual Funds will be marginally affected by the revised RBI norms on call money lending. With participation in repos, overall returns from money market funds may decline by about 25 basis points.

[05:10:06 PM] => Manish :Your tech fund is down 60%, Equity fund down 32%, Opportunity fund (or lack of it ) down 31% even your balanced fund is down over 20%. What has gone wrong ? Atleast the balanced fund should have performed better. Looks like the BULL has hanged himself
[05:10:34 PM] => AM: While mutual funds are expected to outperform their benchmarks, they are unlikely to move contrary to the market direction, particularly when the market decline is of a significant magnitude. We try and outperform markets by falling lower in a declining market and rising faster in a climbing market.

[05:16:03 PM] => Pracheeb :Why is that your debt schemes are not doing well?
[05:16:39 PM] => AM: Pracheeb, our debt funds have actually done pretty well over the past year, ranking in the top quartile. While the performance may have been marginally affected in the past month or so (as with other debt funds), the longer term performance remains good.

[05:17:06 PM] => Shilpajain : Hello Sir , What to do you think will the markets come up in near future or not . Will it continue its downtrend till July 2, 2001. Is there something wrong with the fundamentals of the company , which are witnessing the fall . How do you View the market post July 2 2001
[05:17:35 PM] => AM: Shilpa, as I mentioned earlier, the risk-reward is in favour of investment into equities. The current downtrend is more a reflection of short term technical concerns. We actually see the fundamental situation improving when we analyse balance sheets of a variety of companies.
[05:17:57 PM] => We see a trend of balance sheet downsizing, cost control, improvements in working capital efficiencies and overall improvements in returns on capital. Coupled with the fact that interest rates are at all time lows, we are very positive on the equity markets going forward.

[05:18:29 PM] => Binay : It's kind of weird but your DSP Opportunity fund has lost 31% inspite of 66% exposure in cyclical and 12% in cash. Have you recently reshuffled your portfolio and cut exposure in IT - is that the reason for this dismal performance. Even a stupid Sun F & C value fund stands ahead of you in returns.
[05:19:04 PM] => AM: Binay, our Opportunities Fund has been overweight on Cyclical as well as the Technology Sector. The Fund has actually outperformed the market in recent times. We have also done better than the fund you mentioned in terms of returns.

[05:19:36 PM] => Sunita_rao : In your opportunity fund, you have 66% in cyclical? Do you think cyclical are the sector to invest in now?
[05:20:42 PM] => AM: Sunita, we are positive on some cyclical stocks given the fact that this category of stocks are showing an improvement in incremental capital employed. Added to this, their current valuations are hovering around book value/all time low P/Es, despite interest rates being at an all time low. We find this sector attractive for investment, as is reflected in our portfolio composition.

[05:21:30 PM] => Manjesh :Hi congratulations on being one of the youngest fund managers (I think ) .Lets forget all the bull on bottom up approach, research, etc.. etc... how do you plan to meet and fulfil the expectations of all those investors who currently have put approx. Rs. 200 crores under you ?
[05:22:18 PM] => AM: Manjesh, I plan to perform to the expectations of investors by precisely focussing on the attributes mentioned by you above ! My job as a fund manager is to identify good stocks at intrinsic discounts to their expected cash flows. Its as simple as that !

[05:22:57 PM] => Shilpajain : What do u think will the Biotechnology will replace the software boom which we had earlier , if yes which are the companies n which you are bullish.
[05:23:35 PM] => AM: While the biotechnology sector offers tremendous potential, there is a dearth of good quality, listed companies in this sector at the moment. The software boom was characterized by a sector which could absorb large amounts of capital and yet deliver high returns on this capital. Biotechnology, on the other hand, is likely to be less capital intensive than the software sector and it remains to be seen if the biotech sector has a market capitalization potential similar to the software sector.

[05:24:33 PM] => Sunita_rao :Your sector classification is rather confusing? Why do you say Cyclicals in one scheme & auto, cement etc in another? Don't you have a standard method in classification or is it just to confuse an investor?
[05:25:10 PM] => AM: Sunita, our sector classification is actually quite simple. In the Opportunities Fund, we have broken the broad sector classification into four categories viz. Cyclicals, Lifestyle, Healthcare and Technology, since the objective of this Fund is to have large exposures to any two of these four sectors. Further sub-sets of these four broad sectors are detailed in our Equity and Balanced Funds.

[05:26:10 PM] => Vicks :You manage both the technology fund and the opportunity fund. Your portfolio in the opportunity fund clearly shows that you are not bullish on IT. Then how can you objectively manage the tech fund?
[05:26:47 PM] => AM: We are currently at market weight (weight in line with the Nifty) on Technology in the Opportunities Fund. Since the mandate of the Technology.com Fund is to limit its investments to the information technology, telecom and media sectors, our hedge in this fund is through cash. Our Technology.com Fund is currently invested to the tune of 77%.

[05:27:18 PM] => Svenkateswarlu : Shall I sell Infosys at 3200 and give delivery to make profits ?
[05:27:45 PM] => AM: We are constrained from providing stock specific views.

[05:28:21 PM] => Bsandhu : In Today's times is a Fund manager better off as a trader rather than an investor ? your comments - Secondly what in your view would you mean if you say short term , medium and long-term ?
[05:28:56 PM] => AM: Sandhu, Funds are typically managed with certain price targets/return expectations, and the holdings are reviewed on a regular basis. If a stock were to deliver its expected return ahead of time, we have no hesitation in booking a profit. Our investments are return-led and not time-led. The short term is typically defined as a 3 to 6 month period, the medium term as a 1 to 2 year period and the long term as any period beyond the medium term.

[05:29:13 PM] => rohita :L & T is your biggest holding? Why?
[05:29:26 PM] => AM: Rohita, I cannot comment on a stock specific basis.

[05:30:07 PM] => Preeetam_k :Given that MF's and FII's and FI's have privilege to information on companies by speaking to them regularly , or having being invited to special conference calls etc.. there is a long dismal history to show for it - were you all MF's hoodwinked
[05:30:55 PM] => AM: Preetam, if you look at the returns delivered by private sector mutual funds over a longer period of time, they have by and large outperformed the broader market. Being in touch with senior management is an integral part of understanding industry trends and company specific issues.

[05:31:26 PM] => Harryb :The only reason that the US economy has grown over the last decade is because of a healthy stock market. Spending power has increased because of this which has resulted in increasing demand - would you agree. Why can't something like that happen in India?
[05:32:03 PM] => AM: Harry, while I am not an expert on the US markets, I do believe that the US market boom was a function of productivity increases coupled with declining interest rates. The performance of the stock market in the US may have had an added rub-off on consumer spending, but that is not the only driver of an economy. In the case of our economy, the Agricultural and Industrial sectors still contribute over 50% of GDP and we need a sustained growth in these sectors to contribute to a longer term secular growth in the stock market.

[05:32:59 PM] => Hunoz : IS the Bull actually waiting to be unleashed ? (By the way who has got it on a leash ) Just kidding Mr. Maheshwari Where do you see the Index on March 2002 - a base line prediction
[05:33:38 PM] => AM: We expect the Equity markets should deliver a return of upwards of 20% p.a. over the next couple of years. This, by the way, in in line with the compounded annual return of 18% p.a. from the Sensex since inception in 1985. As a mutual fund, our endeavor would be to outperform the broader market benchmarks.

[05:34:03 PM] => Amit :Are Indian MF's prepared for F & O's. Will we see an increase in volumes in the near future? Are you currently playing in this market?
[05:34:28 PM] => AM: At the moment, mutual funds are only allowed to hedge their portfolios through the derivatives market.

[05:38:14 PM] => jacky kapoor: Is it a good time to invest in technology stocks?
[05:38:43 PM] => AM: Jacky, the next two quarters will be quite crucial in understanding the impact of the US slowdown on Indian IT companies. While we remain positive on the business potential from the offshore model of Indian IT companies, we are keenly watching the pricing and costing dynamics of the sector. While the near-term uncertainty on this sector remains, it is advisable to follow a diversified approach to investing.

[05:39:47 PM] => Ramach: I have lost a lot in investing in DSP balanced fund and technologty fund. Is there any hope I will at least get my original investment?
[05:40:10 PM] => AM: Our endeavour is to deliver the maximum possible returns to our investors. At present levels, it would be advisable to remain invested in the equities market.

[05:40:33 PM] => Bunny 007: Do you think we will see a bull run soon? when? which sectors will outperform?
[05:41:02 PM] => AM: We think the markets are poised to deliver attractive returns over the next 12 months, purely on account of undervaluation of present cash flows. A longer term secular bull run requires an improvement in macro-economic conditions.

[05:44:49 PM] => Myiris : Hold on friends, Mr Maheshwari is just taking a break for a minute (Some importatnt call

[05:49:37 PM] => Bsahu: GIVE YOUR MONEY TO PROFESSIONAL MONEY MANAGER.THEN HOW COME YOUR OPPORTUNITY FUND IS AROUND 6/-.
[05:50:04 PM] => AM: Sahu, please refer to my answer to Manish�s question

[05:50:34 PM] => Nkk61: have a query on valuation. In which situation does one employ EV/EBITDA for stock picks? A second query is on PE ratio. is it right to assume that in the long run, the company\'s earnings growth and PE ratio should converge?
[05:51:16 PM] => AM: We use a different approach to valuation. We typically focus on trends in Return on Equity (RoE) and relate this to the Price/Book and Price/Earnings ratio we would like to pay for the company. You would notice that companies with RoE of less than 13-15% tend to quote at discounts to book value. Correspondingly, as RoEs get higher, the P/Book rises proportionately. While we also look at P/E to growth ratios, we use this more to identify near term undervaluation opportunities.

[05:51:48 PM] => Zipahead: given the current market stand and the GDP rate and also the downtrend, Would you, dear sir, be kind enough to advice on what kind of funds would be most suited for investment.
[05:55:09 PM] => AM: At present market levels, we believe there is a case for upside purely on account of undervaluation of base case cash flows. This factors in the fact that macro-economic conditions are not healthy. We would attach more weight to the macro-economic factors once the Sensex reaches a certain level, to determine further upside. I must mention though, that despite poor macro-economic conditions, the financial variables of the economy are very positive viz. Interest rates, inflation, liquidity - all of which augur well for the equity markets.

[05:55:18 PM] => alpha: Tech shares seem to be crashing again. When will we see some stability?
[05:55:38 PM] => AM: Answered earlier.

[05:58:48 PM] => Jeevan: do you see interst rates coming down further?
[05:59:04 PM] => AM: Answered earlier.

[05:59:28 PM] => Halvajain: What kind of yields can I expect in a gilt fund if I enter it now? What is downside? Or the upside?
[06:00:01 PM] => AM: Over the next 12 months, we expect gilt funds to deliver a return in the range of 9.50% to 10%. Our outlook for the next 3 months is of stable to declining interest rates. The longer term outlook is more a function of macro-economic fundamentals.

[06:00:19 PM] => Krupa: assuming I am willing to take the risk, is this the right time to invest in tech funds? or should I wait a little longer for NAVs to fall further?
[06:00:40 PM] => AM: Answered earlier

[06:01:12 PM] => Manish 78: Which industries you feel are consistence to give an annual return of about 15-20%.
[06:02:08 PM] => AM: The defensive sectors tend to deliver consistent returns over a period of time. In the case of cyclicals and growth sectors, timing does become important in eventual returns.

[06:02:35 PM] => Nil: What is the Current cash levels in each fund?
[06:03:05 PM] => AM: Please refer to our May-end Factsheet on Myiris.com.

[06:03:34 PM] => Pankaj Taparia : What is your view on the ICE sector and what is your prognosis on them in the coming quarters
[06:04:11 PM] => AM: Answered earlier for the IT sector. In terms of telecom and media, we are looking for stocks with high margins of safety i.e. stocks with discernable cash flows trading at low valuations. There are some opportunities at the moment that we are evaluating.

[06:04:38 PM] => Vanaja: What is your one year term outlook on the technology sector, interms of business growth and investor returns from current levels
[06:05:16 PM] => AM: Answered earlier.

[06:07:01 PM] => Myiris: Mr Maheshwari is loaded with questions, but friends due to time constraint he will be answering only last 10 questions which have been already asked

[06:11:48 PM] => Mravvichandran : You have invested huge amount on SIP Tech? What is the future of this investment?. opportunities fund is supplosed take advantage of the prevailing fancied sector. what is your favourite sector right now and why?
[06:12:17 PM] => AM: We have valued SIP Technologies at Rs 99 in our Fund. At this price, the valuation works out to 4x FY2001 expected earnings (results are expected shortly), and a Price/Book value of about 2x, which leads us to believe that the current valuation is conservative. Going forward, the company is expected to grow in line with the industry rate of growth.
[06:12:56 PM] => The Opportunities Fund is currently focussed on the Cyclicals and Technology Sectors, with more weight attached to the former.

[06:15:34 PM] => Mahesh: Don't u think the MNC pharma industry is pretty attractive and is unnecessarily beaten down to such lows and are sure to outperform as 2005 comes closer
[06:15:53 PM] => AM: The MNC pharma sector is attractively valued. The trigger for stock performance will be a function of an improvement in their domestic sales growth prospects and legislative changes. The concern, however, is on the modalities of 100% subsidiaries and the business impact on the existing listed companies.

[06:16:20 PM] => Chandresh :Don't you think companies should make all relevant information publicly available to all investors at the same time? Do Fund managers get privy to sensitive info in advance because of deep pockets?
[06:17:12 PM] => AM: Chandresh, our experience is that companies are by and large following SEBI�s code of conduct on corporate governance. Any information given to analysts/fund managers is updated on their web-sites. This phenomena is likely to gain momentum over the coming months.

[06:19:26 PM] => Zipahead :the question here would be whether the small investor should venture into the current market scenes? I would certainly LOVE it if YOU could seriously consider this question and comment.
[06:19:59 PM] => AM: At the individual level, anyone, including you or me, has some asset allocation plan towards equity and debt. To the extent that one plans to invest in equities as part of this asset allocation, the present market levels offer a good risk-reward ratio. Unfortunately, small investors tend to shy away from investing into the equity markets at lower levels and tend to come in at higher levels, after perceiving a consistent rising trend. This is a good time to break from this trend.

[06:21:04 PM] => Myiris: Thank you Mr. Maheshwari for informative and lively chat session

[06:22:37 PM] => AM : Thanks a lot for the overwhelming response and sorry friends, but due to time constraint could not answer all the questions.

[06:25:37 PM] => Myiris : Thank you all the participants and do join us for the next chat session on 22 June withMr Vinay Bajpai - AVP - Investsmart India Ltd.

[06:26:00 PM] => Myiris : Thank you all and bye for now