[04:33:05 PM] => Welcome to the live chat session,Mr Sarin will be joining us shortly
[04:38:44 PM] => DISCLAIMER
[04:39:03 PM] => Mr. Anil Sarin is the Fund Manager at Birla Mutual Fund. At the time of this conversation / chat, Mr. Sarin may or may not have positions in the stocks mentioned below , although holdings may change at any time.
[04:39:51 PM] => The views expressed by Mr. Anil Sarin 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. Sarin, 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.
[04:40:23 PM] => Lastly the views expressed by Mr. Sarin 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

[04:49:52 PM] => Welcome to the chat session Mr Sarin

[04:51:00 PM] => Kartikeyan: Ours is just a body shop Industry - No Hi tech solutions only cheap labor - Your comments
[04:52:16 PM] => AS: Not true. Our companies are doing R&D for global entities. This work goes into products of those companies. Of recent, some IPR is also being sold by Indian companies, though the revenue size is small currently. Also, gap between Indian and US based rates is falling year after year.

[04:53:03 PM] => Radhika: Is the worst over for the IT sector? What are the prospects of IT sector in the near future?
[04:54:33 PM] => AS: Very hard to say when IT will hit bottom and worst is over. Recently, no. of visits by senior managers of global companies has increased. Size of average order is also going up, but sales cycles are getting longer. While longer term argument favours Indian IT firms, short term is uncertain.

[04:55:23 PM] => Ngupta: What are your views on the future direction of the Indian Mutual Fund Industry?
[04:56:14 PM] => AS: Penetration levels are currently abysmally low. Going by international experience, this industry has a long way to go before growth tapers off. Structurally it is a superior product, and the industry is doing a lot to promote itself.

[04:57:42 PM] => Joydeepm: If there is not a rate cut we can only expect a return of 9 to 10% in the Income Funds. So why should we bother to put in Income fund we should rather park our fund in the Bank FDs even where we can get 9.5% and that too without any risk. Further in case any of your investment in the Pvt. Sector Unit FDs/Bonds get bad debt what kind of impact is forwarded to the investors?
[04:58:32 PM] => AS: Income funds provide liquidity and transparency. Banks are also not completely safe (as in the case of recent bank default). Some options of Income Funds provide protection from capital gains tax.

[05:00:03 PM] => Nileshshah31: The mechanics of the stock market are largely concentrated in around just a handful of stocks apart from the Sensex Stocks. There are so many companies which are doing well and have grown compounded 30% y-o-y basis since inception. Does or does not the market recognize such stocks or everything in this market has to be operator driven? Is honesty no longer a virtue?
[05:02:02 PM] => AS: My thoughts exactly. If you know of any stocks that have been and will continue to compound at 30% yoy for the foreseeable future, please tell me. Usually, there are issues relating to sustainability of growth, liquidity, or quality of accounts/promoters etc.

[05:02:40 PM] => Kpavithra: What do you mean by Mutual Fund, What are the chances of failure?
[05:03:09 PM] => AS: Investment in mutual funds involves risk. You are advised to read the offer document carefully before investing. Having said that, every care is taken to avoid undue risk. Equity markets are invariably volatile and even more so of late. But the business case for investing now remains strong. Despite volatility, medium term returns are expected to be healthy. Markets cannot ignore good performance indefinitely.

[05:03:33 PM] => Himanshu30: How can I cover my loss, should I average in good IT stocks or diversify my portfolio?
[05:04:17 PM] => AS: Depends upon the extent of free cash you have. If possible, you should invest regularly in order to smooth the ups and downs. Longer term, if earnings of companies increases ahead of inflation, and you have bought throughout the cycle, your wealth will compound ahead of inflation.

[05:04:53 PM] => Vishalagarwal178: I have 2500 shares of HFCL @ 270. Please give me advice on whether I should hold that stock for few months or I should book a loss right now the share is quoted on BSE @ Rs. 105 approx. If your advice is to hold, up to which time I must hold it. Now I don�t even want to gain from it. I only want to recover my capital or minimize my loss if any.
[05:05:45 PM] => AS: We do not hold HFCL in any of our funds. We cannot comment on trading strategy, especially of stocks which do not find a place in our portfolios.

[05:06:17 PM] => Sunilnayanar: Where do you see interest rates heading?
[05:06:39 PM] => AS: Steady to marginally downward in the short term (6 months).

[05:07:01 PM] => Ayadav: Why are MFs playing bear when FIIs are playing bulls?
[05:07:35 PM] => AS: Longer holding horizons, poor domestic (in their home country) markets, and a desire to diversify. We are investing cautiously, and cash levels are down.

[05:11:04 PM] => Abhishekinc: Are mutual funds allowed to trade on futures? If so is there a cap on their investment in futures? Also how do you feel this will affect the market?
[05:12:51 PM] => AS: Yes, mutual funds can invest in options/futures, as desired by fund managers. These are merely hedging tools. I expect a slow pick up in volumes initially.

[05:14:00 PM] => Abhishek: Why should I invest in a Mutual Fund when most funds perform as miserably as they do in India? Clearly the funds have been as clueless about the market as the small investor---oh! and please don�t tell me that funds are the buffer for the small investor against market
[05:15:08 PM] => AS: You should invest in mutual funds if you have some other full time job and want to let professionals handle that aspect. Professionals will make mistakes, especially in volatile markets. And this has been the case of late. But overall, it is still better than trying to play the markets yourself.

[05:15:58 PM] => Nehal: Should one have sectoral investment or in current times stock specific investment is advisable
[05:18:09 PM] => AS: Going by Indian experience, stock specific investment is advisable. Recent times have been very bad for whole sectors, but longer term, individual performance will be a better option. For e.g. Moser Baer and Gujarat Gas have performed well (relatively) despite being in �bad� sectors.

[05:19:23 PM] => Gopal Mohanty: What is the future for mutual funds?
[05:21:59 PM] => AS: The future is bright for mutual funds. Recent volatility may have affected the confidence levels of investors, but the basic logic of investing regularly for the long term remains. Experience of international markets has followed along similar lines. Going forward, saving options will converge around fewer candidates, and mutual funds will figure prominently.
[05:23:15 PM] => AS: With returns from PFs etc. becoming more reflective of market realities, MFs stand to benefit. Current opinion about MFs is divided due to volatile performance. But once the reform process gets underway properly, many profitable opportunities will emerge. MFs have the ability to professionally value those opportunities and act in a professional manner in interest of unit holders. This will add to popularity of MFs. However, if economy continues to drift, then MFs will only reflect the lack of profitable opportunities.

[05:24:18 PM] => Ramayyar: I intend purchasing 100 Penta at the current price. Pls advice I hold 100 satyam at 272.00 . What do I do . Will it go up. : How good is Penta media at 60.00 mastek purchased at 110.00 and Sonata purchased at 18.00
[05:26:10 PM] => AS: Kindly stick to larger and higher quality names. Try to avoid temptation of equating low share price with cheap valuations. Most of the time, stocks are cheap because they deserve to be so.

[05:27:08 PM] => Padmayyar: I have purchased 500 DSQ Biotech at 24.00. Pls advise
[05:28:46 PM] => AS: Please stick to top quality names in these uncertain times

[05:29:16 PM] => Sachhpal: why MF\'s not doing well?
[05:31:07 PM] => AS: MFs reflect the underlying opportunities and economics of businesses. If the business outlook is unclear, MFs cannot change that. Their value lies in choosing the better names in good times, and avoiding bad names in bear markets. But since they invest in the same equity markets like everybody else, MFs cannot avoid the overall volatility of markets.

[05:32:49 PM] => shankar_n_v: I have some some 2 lac which I have got out my vrs kindly advice whether insurance would be a good investment
[05:34:39 PM] => AS: Some of the older Insurance companies offer higher rates of return, but service is an issue. The newer insurance companies have flexible options for you to choose from. Overall Insurance should be a good option for you.

[05:41:03 PM] => Himanshu30: why should I invest in birla and not in any other funds
[05:41:52 PM] => AS: Birla MF has a history of detailed research before investing in companies. We have one of the largest investment teams in the industry today. Our research effort is equal to or more than an average broking house.
[05:44:03 PM] => AS: Also, we cover a larger breadth of prospects. As such, when there is a lot of innovation and new things are happening, we are able to catch them slightly before the broad market. This has been reflected in our returns in the past. We have had our share of mistakes, but have not invested in clearly �bad� companies. Going forward, our intensive research-based approach will allow us to identify opportunities ahead of the market. Lastly, we are well positioned because of our depth of experience in Indian equity and debt markets

[05:45:13 PM] => Hemant: Which are the sector funds available in the market?
[05:46:32 PM] => AS: There are many, including core sector, petro sector etc. Please consult with your financial advisor

[05:47:44 PM] => Devang: Can you list & rank the sectors that could be attractive investment opportunities in the near future ?
[05:49:03 PM] => AS: Very hard to tell, especially for the short term. But IT offers fast growth (30%), high return on investment ratio (ROI) of more than 35%, and a large market potential. Sooner or later, share prices will reflect that. Pharmaceuticals are another interesting option. As and when second stage reforms take hold, engineering stocks should offer value.

[05:50:12 PM] => Ramayyar: How good are the IT stocks?
[05:51:02 PM] => AS: I just explained that in an earlier answer.

[05:52:27 PM] => Sachin_Khedekar: If stock options will help MF to hedge their risks well? MF are not allowed to write options? I feel fund managers are much better people to write options so they should be allowed to write options. Your comments please. Further it is loss to MF as they are restricted from entering a good business.
[05:54:41 PM] => AS: MFs are allowed to buy and sell options as long as they hold the underlying stock or have adequate cash to meet obligations. But they are not in the business of writing options on full time basis. This is best done by large broking and financial entities.

[05:55:26 PM] => Tab: What are sector funds? How are they different from equity instruments?
[05:56:23 PM] => AS: Sector funds are a special form of mutual fund, where investment in done only in specified sectors. They have similar characteristics as stocks of that sector, but offer diversification advantage.

[05:57:11 PM] => Hk: What are good sectors for investment now, where should I divide my rupee percentage wise? I am 30 years old.
[05:58:11 PM] => AS: IT and Pharma are attractive. Once reforms take hold, engineering stocks offer value. Government seriousness and success in disinvestment of PSUs can unlock a lot of value in PSU stocks as well (but that is quite unpredictable). Weightage of 30% in IT, 20% in Pharma, 25 % in specific stocks (not forming part of IT or Pharma). 25% should be in fixed income securities.

[05:58:56 PM] => Ramayyar: Sir I have purchased 100 Penta @ Rs.76, 100 Mastek @ Rs.112, Satyam 50 @ Rs.185 and 200 Sonata @ Rs.18. Request comment on long term prospects please!
[05:59:54 PM] => AS: Please buy into larger, better quality names for the long term. Cheaper is not always better

[06:00:51 PM] => Kamlesh: Has the sun set (finally) on the IT Industry? Are we now going to see normal growth levels of 25-30% and albeit relatively lower P.E's and cash flow multiples?
[06:04:18 PM] => AS: Growth rates are unclear, but 30% compounded is a fair bet. Apart from revenue growth, IT stocks offer very high ROI (more than 35% on average). On a relative basis, and taking aside the current weak period, no other industry offers better value than IT. No other industry offers so much linkage to international economies as well. On a relative basis, IT is still the best bet for the long term.

[06:05:38 PM] => Ghanshyam: Do you believe in the law of averaging. Secondly given that your objective in the IT fund is to invest in tech stocks how are you going to protect your downside? What amount of cash are you sitting on? Are you trading?
[06:07:21 PM] => AS: One can be in cash, or get into less volatile scrips when one anticipates trouble. But largely, if the sector is doing badly, the fund will not do well in absolute terms. I am sitting on 15-17% cash, but this is a dynamic figure. I sell stocks that run ahead too fast or ahead of their fundamentals. Similarly, I buy those that have fallen �too� low. If that is what you mean by trading, I do trade. But I do not continuously buy and sell at low spreads, that would be speculating, and is not a sound strategy for enhancing wealth on a consistent basis.

[06:08:27 PM] => Rdhulla: How would you market Mutual funds in such a market and what will be your USP of BMF? What should be the parameters for an investor before investing in any scheme of any mutual fund?
[06:09:22 PM] => AS: Our USP is our research-oriented approach to stock picking. A large and experienced investment team will help in uncovering value when lot of new things happen and value of faster identification is a lot higher. Regular investing is the key to better returns. It is hard to predict when markets will rise or fall suddenly, and instances of catching the top and bottom of markets has been very rare.

[06:10:13 PM] => Nileshshah31: Mr Sarin, Thank you for your reply. Heritage Foods is probably one stock that has grown 30% compounded y-o-y basis and will continue to do so for at least the next 3-4 yrs. This is in reply to your asking of companies that have grown 30% y-o-y basis. Could you look into the prospects of the company and advise whether it is worth staying invested in? This company has grown 30% compounded y-o-y basis but due to lack of operators the scrip is quoting at PE of just around 2.5! Please comment
[06:11:55 PM] => AS: I manage the Birla IT fund, hence Heritage Foods is outside my purview. But the performance track record, dividend yield and ownership of this company inspires confidence. But poor share price performance could mean the market expects the growth rate to taper off. I would continue to hold on, if I were you, and sell only if quarterly numbers start to deteriorate.

[06:14:50 PM] => Vikashranjan: What do you think is the future of technology fund (Prudential ICICI Tech and many others)?
[06:15:38 PM] => AS: Technology funds are under pressure, due to poor short term prospects for tech stocks. But IT companies are getting bigger and better over the years, and are attracting a lot of talent and capital. Many good IT companies are waiting to list (IPO) on stock exchanges as soon as the market revives.
[06:16:31 PM] => Then there are the numerous IT enabled services companies. All these will increase choices available to investors. If the technology companies continue to grow revenues and earnings on a consistent basis, it is bound to reflect in the share prices. The combination of increasing number of choices and rising pool of cash flow will make IT funds do well in the future.

[06:17:14 PM] => Vishwanath: Are you saying that investments in sector funds are not advisable and one is better off investing in diversified MFs or buying individual stocks (based on your answer to a Mr. Nehal)
[06:17:36 PM] => AS: Investment in sector funds is good for younger, more aggressive investors. But there too, only a portion should be invested in sector funds. Going forward, sector funds in the IT sector will become very large and their returns will approximate the earnings growth of underlying IT stocks. Buying individual stocks is probably the riskiest option.

[06:18:53 PM] => Pranav: I am a stock broker based in Bangalore and we do run a Management institute . My father is Dr. Prasanna Chandra. I am thinking of having some information exchange from both ends. We have been in broking from past 65 years. Kindly let us know if we can be of some help to you. Bargain hunters, Which stocks are good picks with a holding period of 1-2 years?
[06:19:08 PM] => AS: Most large and high-quality stocks should be good bets for a 1-2 years holding period.

[06:19:32 PM] => Vishpurohit: Software may be nearing bottom over the next 3-6 months. How does one attract retail to the funds?
[06:19:46 PM] => AS: By constant communication, providing case histories and being persistent.

[06:20:12 PM] => Rk47: Given that the F & O market is limited to a few stocks do you see huge money flows now entering the MF Industry - has SEBI's move ensured that � Your comments?
[06:20:40 PM] => AS: It is too early to comment on the extent of F & O. This is just the start, and market will become more broad based as we go along.

[06:21:15 PM] => Kabin: what is the future prospect for Satyam and Infosys. Can Satyam touch a level of Rs300 in coming days? What is your view regarding Aptech Ltd. in the present scenario of demerging with Hexaware?
[06:21:34 PM] => AS: Infosys is the best among the names you mentioned. I would avoid marginal names in these uncertain times.

[06:22:04 PM] => Nileshshah31: Mr Sarin, Could I get your e-mail id as I am not able to get in touch with you. Even Mr. Bharat Shah�s id at Birla Mutual needs to be updated.
[06:22:27 PM] => [email protected]

[06:25:02 PM] => Saina: Why so much concentration by Birla advantage fund in few scrips?
[06:25:55 PM] => AS: The investment universe is shrinking, and we have to choose only the best among the lot. But many new scrips have been added. As the market improves, many new names will list on the exchanges and also many new performers will emerge. Those will be added.

[06:26:40 PM] => Lalit: If one looks at Birla's performance over the last year in Equity alone you happen to be the worst performing fund. How can you then boast of research. I also believe that your disclosures and transparency are not up to the mark
[06:27:06 PM] => AS: One year performance is not conclusive evidence. We do well in times of rapid growth and innovation, where our edge in research comes to the fore. You will see this in future as well. Yes, we have made mistakes, but would like to believe we won�t repeat those so easily in future. We have pioneered many items of transparency in the MF industry. Please help us by providig evidence of lack of transparency.

[06:27:30 PM] => atul verma: Why is it that at one point of time your fund was extremely bullish on Visual soft and now it does not feature in any of your schemes. Has it become a bad stock now? Why was your fund not able to offload it at a much higher price given the fact that you had better access to market and other analytical information?
[06:28:00 PM] => AS: Visualsoft is dependent upon software product markets for its performance. Situation deteriorated too fast for us to react. Our faith in Visualsoft management remains, but prospects for software products are unclear at this point. Hence we have substantially reduced our position there. As and when we get better visibility, we�d like to build up a strong position there again.

[06:28:26 PM] => Ashit Kothi: What would you suggest income fund or equity fund in a current scenario? What is your view on e-enabled business and which companies fall under this segment of IT
[06:28:45 PM] => AS: That depends upon your risk aversion and cash flow position. Bear in mind that risk and return go hand in hand, and too much of any is not good. I would favour a mildly aggressive stance at this point.

[06:29:08 PM] => Dkhems: Do you still or can justify IT stocks having an ROI of more than 35% backed by a growth rate of 30%?
[06:29:31 PM] => AS: ROI is a function of operating margin and capital employed in business. If business is less capital intensive and has high operating margins, ROI will be high. Growth is a function of how fast operations are scaling up. For example HLL has a revenue growth rate of 5/6 %, but enjoys a 65 % ROI.

[06:31:03 PM] => Myiris:Mr Sarin has just answered the last question for the chat session.

[06:31:58 PM] => Myiris:We thank Mr Anil Sarin for his time and effort for an informative chat session

[06:33:31 PM] => Myiris:We thank all the participants for their questions.

[06:34:48 PM] => Myiris:Please join us next on Friday June 29, 2001 for a chat session with Mr Nirjhar Gupta, Head Research, Prabhudas Liladhar Pvt Limited

[06:35:37 PM] => That's all for the day, Bye for now