[04:32:42 PM] => Welcome to the Live Chat Session : Mr Rajan will be joining shortly
[04:34:42 PM] => DISCLAIMER
[04:35:26 PM] => Mr. S.N.Rajan is the CIO of Kotak Mahindra Asset Management Company. At the time of this conversation / chat, Mr. Rajan may or may not have positions in the stocks mentioned below , although holdings may change at any time.
[04:36:38 PM] => The views expressed by Mr. S.N.Rajan are 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. 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.
[04:36:50 PM] => Lastly the views expressed by Mr. Rajan 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.

[04:41:54 PM] => Svenkateshwarlu: Can I buy Infosys?

[04:42:37 PM] => SNR: Infosys is certainly one of the best companies in IT services and has established itself in the global market. This view on the company should be distinctly distinguished from a view on the stock. Infosys becoming a good buy depends clearly on what one is paying for the stock.
[04:43:08 PM] => . The stock currently trades at around 33 times current year earnings and the company has indicated that it will grow at about 30 %. Considering the fact that it is a leader in the sector a multiple of upto 35 is sustainable. Any higher multiple is possible only if the company surprises on the earnings front as most analysts expect it to and pointers to this front will be evident after first quarter results.

[04:44:53 PM] => Rkay992001: What is your view on rolling settlements?

[04:45:53 PM] => SNR: Volumes will certainly take a beating after introduction of the rolling settlement. Speculative interest will spill over to the derivatives segment. Further with removal of circuit filters we will witness greater volatility whenever there is big buying or selling in a stock. This will throw more opportunities for trading if one spots these movements.

[04:46:45 PM] => Murtazafk: Is the current price of Nath Seeds is worth buying?

[04:48:35 PM] => SNR: I have no view on the stock. But if your interest in the stock is just because it is a biotech stock I would request you to look at the balance sheet before you take a view on the stock.

[04:49:06 PM] => Virafsigan: I have lost 80% in Birla advantage fund & SBI equity, balanced fund.in one year. Should I stay invested in these funds or should I switch over to Alliance and Kothari Pioneer funds who are doing much better.

[04:49:53 PM] => SNR: Being from the industry I would pass this one. You must look at performance rankings provide by various agencies before you take a view on any of the funds that you chose to invest/redeem.

[04:50:54 PM] => Jrvora: I have purchased 500 shares of HFCL @700 when the turn is came?

[04:51:45 PM] => SNR: What price you purchased should not drive the decision to hold the stock. If you think there is a better safer stock you must shift to the same
[04:52:43 PM] => Gmohanty: What is futures of gilt fund (45 days to 90 days)?

[04:53:02 PM] => Gmohanty: What is futures of gilt fund (45 days to 90 days)?

[04:54:26 PM] => SNR: The last one year return has been around 15 % for most gilt funds. Going forward it may not be that high but for the period that you are suggesting, gilt funds with shorter maturities could give returns of around 8 % per annum.

[04:54:52 PM] => Cherry: Which are the stocks you invest in bear market, the stocks which have fallen more or stocks which have remained fairly stable?

[04:56:36 PM] => SNR: Stocks which have fallen more because of any unfavourable events in the company should be avoided. Momentum stocks which have fallen during the bear market by very definition can be expected to move up when markets take a turn. Stocks which have remained stable normally remain stable even during the upturn.

[04:57:33 PM] => Reddykambal: How to get dividend? i.e when to buy shares to get dividend?

[04:58:18 PM] => SNR: Dividends can be received only if the company declares a dividend . When companies declare dividend there is an announcement about a record date. If one has bought shares earlier and if one is a shareholder on the record date you are entitled to a dividend.

[05:00:11 PM] => Abhayyadav: Why are MFs playing bear when FIIs are playing bulls?

[05:01:23 PM] => SNR: Domestic mutual funds have been witnessing redemptions in the past few months. Further there has been a realignment in most balanced funds on the equity component which has led to selling.
[05:02:09 PM] => FIIs have been buying on the other hand because they have seen a fall in prices and therefore an attractive valuation.

[05:02:59 PM] => Nehal: At what level of sensex or after how much fall in sensex, you decide that it is a bear market?

[05:03:47 PM] => SNR: Though there are no precise numbers a fall of one third in price and no bounce back thereafter would suggest that we are in a bear market.

[05:06:01 PM] => Sunil: Do you see your tech fund coming up now and becoming a success?

[05:06:59 PM] => SNR: The outlook for technology companies at this point of time is not very favorable and there is little consensus on when things will change. The spate of profit warnings continues in the US and it looks like things will remain the same for another two quarters before we see positive surprises.

[05:07:57 PM] => Sandeep: Are MF's facing redemption pressure. Is it one of the reasons why they are selling or is it that they have a contraries view to what the other Institutional investors have.

[05:08:33 PM] => SNR: The main reason is redemption and realignment of the equity component downwards in balance funds.

[05:10:04 PM] => Anish: Your view on the economy and the stock market. Do you see a revival in the second half of the year. How would you restructure your portfolio given the circumstances

[05:10:40 PM] => SNR: The economy will at best see a GDP growth of 6 %. Things are tough right now. We do not see a major change in our portfolio because they have been structured to meet investment objectives.
[05:10:50 PM] => Myiris : Hang on Friends, Mr Rajan is on a important call

[05:12:51 PM] => Rameshg: Given that MF's and the Fund managers did not understand our operator driven markets (pretty evident seeing the NAV's) what hope do you see for you and other MF's in a concept driven market of F & O's which are alien to you but not the FII?

[05:13:36 PM] => SNR: It is possible not to play into the hands of the operators if one is cautious . I do not see your point that derivatives are the monopoly of FIIs.

[05:14:39 PM] => Ashok: What are your views about the media sector and Zee Telefilms in particular?

[05:15:27 PM] => SNR: The genera downtrend in industry has led to reduced ad spend by companies and this has affected the fortune of the media sector and especially TV and print channels. Zee after a slippage in TRP ratings has managed to comeback in ratings

[05:17:23 PM] => Rpanikar: Is this really a bear phase or just a tech correction?

[05:17:54 PM] => SNR: I do not see a correction of more than 15% from correct levels. I don�t know what to call it.
[05:22:06 PM] => Myiris : Sorry friends, Just a small break for a minute, Mr Rajan has a very important call

[05:28:57 PM] => Jajoo:MF's account for less than 10% of the BSE market cap while FII's account for approx 25%. Why doesn\'t the investor base place their money with you fund managers and strengthen your base . Is it a question of trust?

[05:29:45 PM] => SNR: A majority of investors (in value terms) prefer to access the market directly which is not the case in most developed markets.Further just placing the money with domestic funds does not necessarily result in strengthening our hands because it is not going to stay permanently.

[05:30:52 PM] => Priya2512:What kind of an investment strategy would you advice investors while selecting equity funds? How could an investor diversify his/her risk?

[05:31:41 PM] => SNR: If you are not one of the adventurous ones you must maintain a balanced allocation to various sectors.Always keep in mind the sector�s weightage in the index and never end up being say 100 per cent overweight in a particular sector which could currently be enjoying the status of the hottest sector

[05:32:26 PM] => My advice would be to keep a cap of 30 per cent overweight.Exxample if a sector is 20 per cent in the index you could go upto 26 per cent.This is not to confuse with investing only in the index stocks.You could choose non-index stocks from the sector.If you are looking at investing at equity funds look at funds which satisfy the above criteria

[05:33:26 PM] => Rupeshmr: What are the parameters used for selecting IT/Media stocks?

[05:40:10 PM] => Myiris: Hang on friends, Mr Rajan will be back in a minute
[05:43:58 PM] => SNR: Since IT stocks are very volatile you must be careful .Choose the leaders which have large market Cap,have a good management and compete with the best in the world which gets reflected by the quality of their clients.Media stocks should be chosen looking at the management and the viewership rankings.

[05:45:19 PM] => Rniranjan: How do you distinguish K30 from other diversified equity funds of Investments philosophy and investment style?

[05:46:08 PM] => SNR: K 30 is a diversified equity fund with no concentration to any particular sector.Currently we are less than 10 per cent overweight in tech and intend maintaining only such moderate overweight. To this extent we will be different from other diversified funds which may take overexposure to a hot sector.Through this strategy we expect to achieve growth without being volatile

[05:47:02 PM] => Rhpatil : Which are the sectors that you are bullish about and where are you bearish?

[05:48:04 PM] => SNR: We are bullish on Technology,Finance and Banking,Cement and PSUs.

[05:49:50 PM] => Namratat: Do you feel investors expectation from mutual funds had been built up to an unreasonable extent?

[05:50:33 PM] => SNR: Yes. Great performances about two years back built up a lot of expectation.Looking back we now notice that such extraordinary returns were exceptions.If one consistently gets a return of 50 per cent over fixed income instruments it would be a very good return.

[05:51:47 PM] => Mukundr: Do you think prices of information technology stocks will come back to their higher levels?

[05:52:05 PM] => SNR: Definitely not.

[05:52:47 PM] => Singhvinod: What is your view on financial sector?

[05:53:51 PM] => SNR: Globally the financial sector is a very important sector.It is in less than seven per cent of the index in India.Going forward we expect this sector to gain prominence.The recent increase in stake in Corporation Bank by LIC to 27 per cent is just the beginning of many such alliances.We will see a lot of consolidation and also take over of Indian private sector banks by foreign banks.

[05:56:44 PM] => Santhily: The investors who invested in the tech funds about a year back have seen the NAV of the funds decline to as low as Rs 3.00. What would be you recommend to them?

[05:57:20 PM] => SNR: It is quite unfortunate that the possibility of such a steep fall was not highlighted enough by the industry at the time of launch of tech funds.To this extent it is difficult to accept such a fall.
[05:57:47 PM] => But unfortunately nothing can be done about it.Averaging is not a solution.I must reiterate the perils of investing in sector funds and concentration of the individual�s portfolio in few stocks or sectors.

[05:58:58 PM] => Renko : Is this the right time for small investor?

[06:01:45 PM] => Renko : Is this the right time to invest for the small investor?
[06:03:15 PM] => SNR: There is no such right time , if you have no exposure to the market you must consider investment at this time.

[06:04:50 PM] => Jayeshlshah: After investing in Bear markets, at what levels should one exit the stocks or book profits, cause everyone advices for investing, but no one tells you when to exit or sell the stocks

[06:05:38 PM] => SNR: As stated earlier a consistent year after year return of 50 per cent over fixed income instruments can be considered a very good return.Very often one gets absolute returns in excess of 30 per cent when investing in bear markets.I would sell more than 50 per cent of the stock if it gives a return of 30 per cent flat and thereafter sell at every rise.One must apply the principle of averaging even on the selling side i.e. sell at every rise.

[06:06:44 PM] => Singhvinod : Is it not true that maintaining NAV's could prohibit fund managers from taking a truly long term perspective?

[06:06:57 PM] => SNR: No

[06:10:29 PM] => Suma: A debt fund with 60% exposure to GoI sec and a fund with 30% each in Corporate debt / Bonds and go Sec. Which is better?

[06:11:02 PM] => SNR: A:Assuming that you are satisfied with the ratings of the corporate debt the latter is better.

[06:12:05 PM] => Ravi: What about stocks like L&T, TATA TEA ? I believe a lot of upside is possible from current levels . L&T upto Rs. 400 + levels and TATA TEA upto Rs. 500 + levels . What do you feel ?

[06:12:18 PM] => SNR: Looks very unlikely.

[06:13:08 PM] => Milind: Is it right time to enter into IT stocks?

[06:13:47 PM] => SNR: Unfortunately it is not possible to predict a right time. If you have an exposure already to IT stocks of about 25 per cent of your equity portfolio, you must resist any temptation to add to it. If you do not have any IT exposure currently you could make it about 15 per cent at current prices

[06:14:48 PM] => Manu: When do you see a reversal in the interest rate trend

[06:15:40 PM] => SNR: Current expectations are that rates will continue to be soft for the next 6 months

[06:16:09 PM] => Rakesh: Why did you launch an MNC fund? DO you believe that MNCs do better than Indian firms?

[06:16:57 PM] => SNR: There is a section of investing community which finds comfort in MNC stocks.The MNC fund is primarily meant to cater to such a requirement. We hold no such view that one is better than the other.There are good Indian Companies and there are good MNCs.

[06:17:21 PM] => Ayush: I have 100 DSQ at 2300 levels. Should i buy 100 more at these levels to reduce my average costs.

[06:17:48 PM] => SNR: Averaging should not be the sole reason for buying DSQ at this price.If you find a better stock at current prices it would be advisable to buy the same.Your initial purchase cost is irrelevant.

[06:18:25 PM] => Kandaswamy: What % of a fund can be invested in a rival / same group funds?

[06:18:57 PM] => SNR: Currently upto 25 per cent of the net assets can be invested in listed investments of group companies. Suitable disclosure has to be made on such investments in group companies. I must add that we do not have any investment in group companies.

[06:19:46 PM] => Sunita_rao: Why do you have so many serial plans? How are they different? Why has SEBI Banned the launch of new serial plans?

[06:20:11 PM] => SNR: We have different serial plans because the duration of each of them is different.Sebi has not banned launch of new serial plans.

[06:21:21 PM] => Preetam: Why is that none of the fund managers saw the crash coming? Are fund managers as ill equpped as the ordinary investor to predict/ anticipate what will happen?

[06:21:56 PM] => A:Fund managers are not supernatural beings.If one could successfully predict one would not be managing others money.You could have individuals who are better than the best fund managers.What the fund manager does is to invest in the best of the companies.

[06:23:31 PM] => Suma: What are PPDs? What if a debt fund has exposure to PPDs?

[06:23:43 PM] => SNR: PPDs are privately placed debt where there is an arranger.There is nothing wrong if a fund has exposure to such PPDs.What is important is the quality of the paper.

[06:24:11 PM] => Ajitha: In a debt portfolio what are the things the fund manager looks at?

[06:24:31 PM] => SNR: The most important would be the quality of the credit.Liquidity also assumes importance because of the open ended structure.

[06:25:01 PM] => RPK: Do you thing this is the right time to invest in equity schemes

[06:25:17 PM] => SNR; Already answered.

[06:25:55 PM] => Pradeep: Do you think there is a future in investing on the internet? DO you think MF investing will happen online too?

[06:26:29 PM] => SNR: As connectivity improves investors will realize the ease of investing through the net.Investors can already invest in a few mutual funds online.

[06:28:59 PM] => Kamalrangan: i feel barring 10 companies in software all are bogus companies making only entriesin the books since they have no tax of anysort whatever they show as profit one has to take pl comment

[06:29:22 PM] => SNR: Just because a company has no tax one must not conclude that it�s not a genuine company. Because of tax free exports we could have companies not providing for tax.

[06:29:46 PM] => Abhishek: What are your views on Global Trust Bank ?

[06:30:32 PM] => SNR: No comments on individual stocks.

[06:30:42 PM] => 123: What is your view on the interest rates 12-24 month period? Do you expect a reversal in the downward trend?

[06:31:13 PM] => SNR : Already answered. Unless we see a pick up in industrial demand rates will continue to be soft.

[06:31:36 PM] => Raj: you seem to be a passive investor, not much churning in portfolio while other mutual funds are supposed be aggresive traders also Dont you believe that the market going no where some sort of trading necessary for optimizing returns

[06:32:00 PM] => SNR: While agreeing with your view that one needs to trade to optimize returns we prefer to be less aggressive on this front.

[06:33:03 PM] => Ravi: What are three major parameters one investor has to see before investing in equities. Please also name three good companies quoting below 30 Rs for 3 year frame

[06:33:21 PM] => SNR: Quality of management,growth prospects and valuations.

[06:33:49 PM] => Balachandran: Don't you think low HLL valuations are sort of an overreaction? On a medium term (the years) do you see a rerating of the stock especially since brand restructuring is underway?

[06:34:25 PM] => SNR: HLL is finding it difficult to have top line growth.The expected pick up in rural demand does�nt seem to be happening.On top of it, it is witnessing aggressive competition from foreign as well as Indian players.It has still managed to achieve profit growth due to operating efficiencies to which there is always a limit.
[06:34:45 PM] => . Recent ORG numbers suggest that there is no improvement.However the company has strong brand and every fall will provide a good opportunity to buy.One must sell if you see a 25 per cent return.

[06:35:41 PM] => Krishnaswamy: How is the company called CG-Igarashi Motors Ltd?

[06:36:08 PM] => SNR: They seem to be doing well on the export front. They have a strong Japanese collaborator who also has a stake in the company. It is one of the leading exporters of micro motors.

[06:38:37 PM] => Abhishek: I have bought some shares of GTB at a price of 28.50, should I sell the stock or hold it ?

[06:39:03 PM] => SNR: No comments.

[06:40:04 PM] => Rajalakshmi: Why is it that a company like Reliance Petroleum with no distribution infrastructure commands higher valuations than a HPCL which has a good distribution network, pipelines and multi location plants?

[06:40:34 PM] => Rajalakshmi: Why is it that a company like Reliance Petroleum with no distribution infrastructure commands higher valuations than a HPCL which has a good distribution network, pipelines and multi location plants?

[06:41:10 PM] => SNR: HPCL like many other PSUs suffer from a low valuation because it is a PSU.The Reliance group is perceived as a group which has delivered superior returns to it�s shareholders.It has demonstrated its capability by setting a world class manufacturing facility.It�s just a question of time before it builds up a distribution network.
[06:41:32 PM] => Incidentally another PSU,IBP is being divested by the government and access to such a company will provide Reliance wit the much needed network.I must also add that many of the current distributors of PSU oil companies are dealer owned and they could shift loyalty to a new player like Reliance if it makes economic sense.

[06:42:23 PM] => Subbukannan: Do you think that it is the right time to invest in equity market or to wait for some more time? 2. Is the bond fund looking risky now considering the large scale appreciation in bond market.

[06:42:46 PM] => SNR: Q1 already answered.
[06:42:59 PM] => Regarding the bond fund if you have a longer term view of a year plus it�s not as risky as investing for a 2-3 month period.

[06:43:32 PM] => Nikhil: What is your view on Syngenta India?

[06:43:43 PM] => SNR: No comments

[06:44:38 PM] => Sam: It seems that PSUs like MTNL and VSNL will have to be sold for scrap if they are not privatised immediately. Your comment.

[06:45:09 PM] => SNR: A:Since there are existing private players in the sector who are growing more aggressively than MTNL and VSNL, any delay will mean competing with stronger well entrenched players for the new entrant.

[06:47:42 PM] => Bakul: how is neyvelilignite co making huge cash acruals of 1000

[06:47:59 PM] => SNR: ROE and EPS are very low inspite of huge cash accrual.

[06:50:55 PM] => Myiris : That's all friends for today, Due to time constraint Mr Rajan will not answer any further questions

[06:52:08 PM] => All the unanswered questions will be answered by Mr Rajan and will be put along with the transcript on our site

[06:53:02 PM] => Thank you Mr Rajan for your valuable time and having such a informative chat session

[06:53:45 PM] => SNR : Thank you all at Myiris and all the participant, It was great pleasure answering your questions.

[06:55:26 PM] => Myiris : Thank you all the participants and do join us for another chat session on Friday, June 15, 2001 with Mr Mukul Pal, financial analyst Derivatives & Investments from India Bulls

[06:55:49 PM] => Thank you all and bye for now