[04:29:07 PM] => Welcome to the live chat session at myiris.com

[04:30:55 PM] => Myiris: Mr. Lalit. K. Khanna, Executive Director, Escorts Mutual Fund will be joining us in a short while.

[04:31:22 PM] => DISCLAIMER
[04:31:59 PM] => Mr. Lalit. K. Khanna, is the Executive Director, Escorts Mutual Fund. At the time of this conversation / chat, Mr. Khanna may or may not have positions in the stocks mentioned below, although holdings may change at any time.
[04:32:52 PM] => The views expressed by Mr. Lalit. K. Khanna 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. Khanna, 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.
[04:33:36 PM] => Lastly the views expressed by Mr. Khanna 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.

[04:34:44 PM] => Myiris : Welcome to the chat session, Mr. Khanna.

[04:36:53 PM] => Rakesh791 : Are there any parameters by which one can judge funds besides their returns or portfolios?
[04:38:23 PM] => LK : Over long term, consistency in returns is as important as absolute returns for the period. For similar returns, the fund that is less volatile is certainly superior to the other one.

[04:39:05 PM] => Suresh_pr: How would you compare the performance of your funds vis-à-vis your competition?
[04:41:25 PM] => LK : Our schemes have consistently outperformed the benchmark indices and have been among the top performers in their respective categories. Escorts Income Plan has recently been ranked by Value Research based upon returns in the last one month. Our tax-saving equity scheme � Escorts Tax Plan � has been a top performer across different time periods. The scheme has handsomely outperformed the benchmark index, Nifty, for most periods.

[04:42:18 PM] => RM_KT: What do you think for the market in a one-month horizon?
[04:43:15 PM] => LK : The equity markets are in the process of forming a long-term bottom and this may continue for some more time. Markets should remain range-bound in the next one-month.

[04:44:38 PM] => Sanjay : Given the current interest rate scenario isn't it better to invest in PPF than in a Gilt, or Income Fund?
[04:45:26 PM] => LK : Not necessarily. The long-term direction of interest rates in India is still downwards. Low inflation and ample liquidity can support even lower interest rates. Moreover, government itself can not keep the level of interest rates on small savings out of tandem for long. Sooner or later, it will have to rationalize interest rates on these instruments as well.

[04:46:08 PM] => T_patil: What's your outlook on Pharma & FMCG sectors?
[04:46:53 PM] => LK : Pharma sector should continue to do well in the coming months. The potential on the generics front in the US is huge and Indian pharma companies are well positioned to take advantage of this. However, MNC pharma companies are unlikely to see much excitement. Regarding FMCG, prospects should improve with rise in rural incomes post the good monsoon rains.

[04:49:03 PM] => Namrata26: How safe is investing in Equity funds? Don`t you think investing in FD`s gives a much better return with no loss of principal amount for an non speculator?
[04:49:59 PM] => LK : Equity, as an instrument, is fundamentally riskier than debt. However, over long term, equities give the highest returns to the investors, notwithstanding the associated volatility in returns. Investors who can afford to take some risks should actively consider investing in equity funds right now as valuations are at historic low levels. Investors who don�t want to take much risks should look to invest in pure debt funds.

[04:51:01 PM] => Maullick: Yours is the only INCOME FUND that has given me negative returns in a falling interest rate market - So much for a Fund Managers expertise - can you kindly clarify why it happened - are you not accountable to us investors?
[04:52:13 PM] => LK : There seems to be some wrong information here. We have only one pure debt fund - Escorts Income Plan. The scheme has been giving steady and consistent returns ever since its launch and is top ranker in its category.

[04:53:11 PM] => Shalini : What measures should the Govt take to pump prime the economy?
[04:55:07 PM] => LK : Boost investments, particularly in the infrastructure sector, make FDI regime more liberal and accelerate the privatization programme.

[04:56:52 PM] => Krishnakumara : Dear Sir - can you clarify what your gilt scheme is supposed to do - forget yours but in general where does a gilt scheme have to invest? After answering the same can u make me understand what is a Krishna Jal Bhagya Nigam and Maharashtra Jeevan Pradhikaran Bonds doing in your portfolio. - Are you another UTI?
[04:59:02 PM] => LK : Gilt scheme invest in Government Securities. These include securities issued by central and state governments/agencies and debt guaranteed by these entities.
[05:00:29 PM] => Both Krishna Jal Bhagya Nigam and Maharashtra Jeevan Pradhikaran are state guaranteed papers. While KJBN is rated A+ by Crisil, MJP is rated AA (SO). These papers are adequately liquid and are being traded at above our acquisition cost. All our investments and accounting practices are as per SEBI guidelines.

[05:01:38 PM] => Ravi_ken : Will mutual funds do better than the market?
[05:02:26 PM] => LK : This would largely depend on the individual fund. It would not be possible to generalize all the mutual funds.

[05:03:12 PM] => Sandeep45: What are your views on interest rates?
[05:05:13 PM] => LK : The long-term direction of interest rates remains downwards in the country on back of low inflation, ample liquidity in the system and adequate forex reserves in the country. However, the high fiscal deficit may create an upward pressure on interest rates.

[05:06:05 PM] => Amit67 : According to AMFI reports, liquid funds have witnessed the maximum inflows. Is this a sign that interest rates have bottomed out and therefor returns from income funds is limited forcing people to turn towards liquid funds?
[05:07:19 PM] => LK : The kind of returns that have been generated by income funds in the past one year are certainly not sustainable. But, at the same time, there are no immediate signs to indicate any upward move in interest rates. Move towards liquid funds should largely be seen as precautionary and investors would gradually return to the income funds.

[05:09:31 PM] => Sapnil : Where do you see the tech sector headed for this year?
[05:09:57 PM] => LK : The fortunes for the sector are largely dependent on global capital spending on technology. The sector is still reeling under over-capacity and high inventory that will take some time to clear up. The Indian IT companies should be able to maintain their growth as advantages of the offshore model are still being understood by the US and European corporate.

[05:11:58 PM] => Naren98 : Your views on our economy? What growth rate do you expect?
[05:12:36 PM] => LK : Expect recovery by next quarter. Increased spending by government and good growth in agriculture, hence rural income, should do the trick.

[05:13:36 PM] => Dinesh_sur : In the short term in the Tech Sector, which is the best Strategy- Technicals or Fundamental?
[05:13:59 PM] => LK :Technicals almost always favour the fundamentals.

[05:14:31 PM] => Raghu_nandan: Where do you see the media entertainment companies headed to?
[05:15:50 PM] => LK : Media entertainment companies would continue to attract investor attention for some more time. However, it must be understood that the earnings in this sector can show considerable volatility over long term. One needs to be very cautious.

[05:17:05 PM] => Shyam43: Which sectors will be outperformers over the next one year period?
[05:17:34 PM] => LK : Cement, pharma and front line IT stocks should do well from here.

[05:18:07 PM] => Nimish_patel : Where do you think the markets are headed in the short and medium term?
[05:18:20 PM] => LK : Range-bound in the short term. Expect recovery in two months.

[05:19:27 PM] => Bala : Why are MFs selling for the last few months when FIIs are buying?
[05:20:24 PM] => LK : Mainly to meet the redemption pressure. Funds have also increased their cash position in the portfolio.

[05:21:02 PM] => A_mad : Do you think prices of information technology stocks will come back to their higher levels? Wich stocks do you recommend?
[05:22:16 PM] => LK : While some recovery in the IT stocks is very likely, don�t expect them to go anywhere near their earlier highs. Stick to the larger front line stocks.

[05:23:13 PM] => Praveen 67: Is this the right time to invest for the small investor?
[05:23:35 PM] => LK : Stock valuations are at near historic lows and the flow of bad news seems to be getting over for the time being. Small investors should definitely consider investing between 30% - 40% of their planned equity investments at this juncture.

[05:26:32 PM] => Somnathm : Does the current interest rate truly reflect the fundamentals of our economy - or is it just on account of liquidity in the system given that there are too many NPA's the Banks have decided to buy just GILT - A demand Supply mismatch - in favour of supply actually?
[05:28:47 PM] => LK : Besides the abundant supply, other factors too have contributed towards lower interest rates in the country. For example, the inflation has been well under control. This, in turn, has been caused by opening up of the domestic economy (thus reducing the tariff and non-tariff barriers for imports) as well as abundant food grain reserves. This gives the RBI sufficient maneuvering room to bring down the interest rates. While low credit offtake and ample liquidity in the system have contributed to the declining interest rates, other structural changes in the economy are also to an extent responsible for the lower interest rates.

[05:29:15 PM] => Rajiv_menon : What is your opinion on the future of index funds?
[05:30:37 PM] => LK : Index funds will continue to flourish. The inherent diversification, investment in large cap blue-chips, and foreclosure of the portfolio appeal to a large number of investors. Index funds should help in increasing the size of the mutual fund industry.

[05:33:10 PM] => Rishabh : Do you see M&As gaining ground in the Mutual Fund Industry?
[05:34:02 PM] => LK : This would largely be a function of individual corporate strategy. Till now, the only people to opt out of the industry have been nationalized banks who do not look asset management as part of their core business activity.

[05:35:16 PM] => Tapan_gh : What are your views on the future direction of the Indian Mutual Fund Industry?
[05:37:45 PM] => LK : The mutual fund industry has a bright future in the country. The current size of the industry is around Rs. 110,000 crore which is substantially lower than the bank deposit base. The mutual fund industry should eventually exceed the bank deposit base, as we have seen in case of developed economies.

[05:38:36 PM] => Marat 32: Do you subscribe to the view that mutual funds industry in India is yet to mature?
[05:40:41 PM] => LK : No. Indian mutual fund industry has come a long way in the last few years. The growth in the asset size in of the industry is clear evidence in this regard. While asset size in equity funds has, till now, largely been a function of stock market levels, the debt/income funds have shown excellent growth in the last two years. The industry is well regulated (through SEBI) and we have very serious players in this industry.

[05:40:53 PM] => Neera_prabhu: What is your opinion on technology funds?
[05:42:08 PM] => LK : Tech stocks can be expected to stage a partial recovery later this year. Tech funds would be expected to mirror their performance. But don�t expect tech stocks/funds to reach anywhere near their historic highs.

[05:43:18 PM] => Religh : What would you suggest income fund or equity fund in a current scenario?
[05:44:37 PM] => LK : This would largely depend on your risk appetite, which would depend on factors like your age, savings in hand etc. Ideally, one should divide the assets between equity and debt. For a normal investors, looking at low equity valuations, one can go upto 40% in equity and 60% in income funds or alternatively in balanced funds.

[05:45:35 PM] => Renu_Sarin : Do you think the Indian mutual funds industry has underperformed given the market conditions?
[05:46:49 PM] => LK : The performance of the mutual funds is for every one to see. However, it must be remembered that performance of equity can not be judged in the short term. One should really see performance over 2-3 years before passing a judgment on equity funds� performance.

[05:47:36 PM] => Kamlesh09 : What do you think of the cement scrips in the current market?
[05:48:56 PM] => LK : The plans to increase the investment level, particularly in the infrastructure sector, by the government should help all the related sectors. Cement would be one of the key beneficiaries.

[05:49:24 PM] => Thakur_R : Has there been any impact on Escorts MF�s inflows after the UTI fiasco?
[05:50:09 PM] => LK : There has not been any impact.

[05:51:46 PM] => Nalini_Mathur : Which investment strategy do you prefer? Do you churn the portfolio constantly or buy and hold?
[05:53:15 PM] => LK : Our strategy largely depends upon market conditions. In range-bound markets, we look to enhance our returns by actively churning our portfolio, while in case of strong upward moves, we adopt the buy-and-hold strategy.

[05:53:42 PM] => Subodh_sahu : Can you tell us briefly about Escorts�s internal benchmarking system?
[05:56:17 PM] => LK : Regarding performance, we clearly aim to be among the top 5 in the respective categories to all our funds.

[05:56:46 PM] => Dinesh Dutt : Dear sir, why do we find very little brand awareness about your mutual fund in overall MF industry?
[06:00:04 PM] => LK : We have deliberately chosen to let our performance lead our visibility. We believe that by giving consistent returns to out unitholders, we will be able to carve out a niche for ourselves. We have largely succeeded in our endeavor.
[06:03:28 PM] => LK : We have deliberately chosen to let our performance lead our visibility. We believe that by giving consistent returns to out unitholders, we will be able to carve out a niche for ourselves. We have largely succeeded in our endeavor.

[06:03:51 PM] => Anish_kumar : What is your outlook on YTMs in the debt market? Will the downward trend continue for some more time?
[06:06:51 PM] => LK : Interest rates should stabilize at current levels for the time being, even as the long term direction for interest rates remains downwards.

[06:08:09 PM] => Gaurav : What are the reasons for sudden large inflows into Income funds? Do you think sufficient investment avenues are available for investing the incremental inflows?
[06:10:27 PM] => LK : Lack of opportunities in the equity market led a large number of investors to divert money towards debt. Also, with abolition of �Badla�, an attractive avenue for parking funds dried out. This money also found its way into the income funds. Falling interest rates and corresponding increase in the securities value further attracted investors towards income funds. Looking at our equity markets, the income and liquid funds should continue to attract investors.
[06:22:23 PM] => Mr. Lalit Khanna is busy ..He'll be back shortly

[06:37:48 PM] => Abishek : How MF could a best bet after us64 fiasco ? Are private MFs really trustworthy ?
[06:38:28 PM] => All private mutual funds fully abide by the SEBI guidelines. SEBI has laid in place elaborate guidelines for investing, accounting and reporting the investments making the entire process very transparent. There should not be any problem of trust with Pvt. Sector mutual funds.

[06:38:47 PM] => Abishek : Is it worth to buy Escorts at this levels?
[06:39:32 PM] => LK : As we are associated with the Escorts group, it would not be fair to comment on this question.

[06:39:54 PM] => Sushanth : What are the prospects of Nath Seeds , Panecea biotech ,and Hindustan Agrigenetics LTD? Thanks
[06:40:46 PM] => LK : We would not like to comment on individual stocks.

[06:40:58 PM] => Mohanvamsi : What is future for cement stocks present conditions?
[06:41:31 PM] => LK : Cement sector should benefit due to increased govt. spending on infrastructure. The ongoing consolidation drive and favourable monsoons too should have positive impact.

[06:41:49 PM] => Girish : Is it worth to invest in MFs after US-64 fiasco ?
[06:42:07 PM] => LK : As we have said earlier, MFs fully comply with the SEBI guidelines. SEBI also conducts periodic audits on all the mutual funds to check if all the guidelines are being strictly followed. US-64 was a special case and it would not fair to generalize it with entire mutual fund industry.

[06:42:29 PM] => Aakash : Which is your fav. pharma stock?
[06:42:48 PM] => LK : We would not like to comment on individual stocks. As a sector, we continue to favour the large cap Indian pharma stocks over the MNC pharma companies.

[06:43:08 PM] => Aniket : Why there is no excitement in escorts counter after it bagged 4 crucial tele circles?
[06:43:31 PM] => LK : As we are associated with the Escorts group, it would not be fair to comment on this question.

[06:43:46 PM] => viren ahuja : Are infrastructure stocks good buys considering PM's interest in economy revival?
[06:44:06 PM] => LK : Certainly. Government seems determined to pump up the infrastructure spending and this should certainly benefit the companies operating in this field. However, one should be careful in picking the stock considering the poor fiscal situation of the government may mean difficulty in achieving financial closure of some of these projects.

[06:44:27 PM] => Krish : In the present scenario of falling stock prices, what do you think is the role of a good mutual fund like yours can do to stabilise the market. Do you think it will be a continuos process?
[06:44:48 PM] => LK : Mutual funds are just one of many market players active in the market. Eventually, the stock levels are driven by the inherent fundamental strength rather than by the level of interest of some institution in a stock. The Indian markets have greatly matured in the past few years and are now large enough so that no single entity can have a large influence over prices for long. No one provide artificial stability to markets if such actions run contradictory to the fundamental direction of stock price movements.

[06:45:11 PM] => Maullick : With respect to my question on Income Fund of Escorts my reference was towards your BOND FUND. You have posted negative returns in that.
[06:45:32 PM] => LK : Income Bond is not a pure debt scheme. In case of Income Bond, we were hit by certain investment decisions that went adverse resulting in depreciation on our equity portfolio. These were largely on account of the poor market conditions. On the debt side we are very sure that we will be able to recover most of our investments in the coming months. This was just a one-off incident as can be seen from the excellent performance by our schemes Escorts Income Plan and Escorts Tax Plan.

[06:45:55 PM] => pk.Ramanan : Why no visibility of your Escorts MF?
[06:46:13 PM] => LK :As I have said earlier, we want our performance to speak for itself. Our entire focus is towards generating consistently higher returns for our investors. Our good performance is being noticed by the investors and our asset size is steadily climbing up.

[06:47:03 PM] => praveen ramanan : What is your fund corpus in Escorts Gilt?
[06:47:52 PM] => LK : Recently launched Escorts Gilt is a small fund as yet. The scheme is performing well and we hope to increase the corpus of the fund in the coming months.

[06:48:19 PM] => Shroeder : What is the impact of UTI scam in your portfolio. How secure is your Mutual fund from these scams?
[06:48:44 PM] => LK : Our portfolio has not had any impact of the US 64 issue. Escorts Mutual Fund abides by all the stringent guidelines of SEBI for investing, accounting and reporting our investments. We also have our internal guidelines on these issues. We are as transparent in our operations as any MF can be and there is certainly no chance of happening a UTI here.

[06:49:08 PM] => Divya : Why is your fund is not having major presence felt in mumbai ? Mumbai is financial capital of the country.
[06:49:26 PM] => LK : Till now we were focussing mainly in the northern part of the country. Having registered our presence here and having established ourselves, we are now planning to aggressively expand in other parts of the country as well. You will soon notice our presence in Mumbai as well.

[06:49:52 PM] => Ravi-ken : Mr. Khanna don't you think that there is a difference between sovereign risk and that of risk of Electricity Boards and other institutions supported by various State Governments. (By the way Maharshtra has been downgraded) . Secondly these papers in your portfolio are only liquid to PF\'s and not to other Banks / MF's. If tomorrow there is a run on your MF you will definitely find it difficult to exit - in this respect I agree with Mr. Krishnakumara.
[06:50:41 PM] => LK : Let us be very clear that the debt issued and guaranteed by state government (unlike any corporate paper) has no �default risk�, just like the central govt. debt. However, there is a slight element of �delay risk�, that is, the receipt of interest or principal may (not necessarily) get delayed by some time. But state will never default. We are following a very careful selection criteria for making investment in state papers, with diversification being foremost in our minds. These papers are sufficiently liquid as far as our investment size is concerned and there is absolutely no threat of our getting cornered here.

[06:51:04 PM] => Manjum : When do u see the benefits of disinvestment trickling into our economy?
[06:51:21 PM] => LK : It is going to be a slow process. With coalition governments and political considerations being the order of the day, it will require considerable will and determination for govt. to successfully move ahead with the programme. Measurable benefits may take months to tickle in but it would help the investor morale almost immediately and that would bring in some instant relief.