Saturday, May 29, 2010

Sensex to Hit Record on Profits for DSP BlackRock

S. Naganath, who has beaten 99 percent of his mutual fund peers in India, says the fastest profit growth in three years and unprecedented spending on roads and ports will drive the country’s benchmark stock index to a record high in the first half of 2011.

“At every dip, we’re a buyer,” Naganath, chief executive officer at DSP BlackRock Investment Managers Pvt, which manages $7 billion in assets, said in an interview in Mumbai today. “If the market falls, then we’ll seek to deploy our cash.”

India’s benchmark stock gauge on May 25 fell more than 10 percent from its recent peak as investors withdrew funds as the European crisis eroded confidence. Still, the gauge today completed its best week in 12 after Tata Motors Ltd., the owner of Jaguar Land Rover, posted profit that exceeded analysts’ estimates.

Trading will be “choppy” in the next six months amid concern Europe’s debt crisis may worsen, said Naganath, 45. Foreign funds sold $2.3 billion of Indian stocks in May, on course for the worst month since October 2008, following the collapse of Lehman Brothers Holdings Inc.

Return to Highs

“As the earnings upgrades come through as currently estimated, this market has the potential to get to the highs that we last saw in early 2008,” Naganath said. The DSP BlackRock Micro Cap Fund has returned 92 percent, compared with a 51 percent gain in the BSE Small-Cap Index, in the past year.

The benchmark Bombay Stock Exchange Sensitive Index, or Sensex, would have to gain about 25 percent to reach its record set on Jan. 8, 2008. The nation doubled its target for infrastructure spending to $1 trillion in the five years starting 2012 to narrow the gap with China. India’s economy is also accelerating as rising incomes boost demand for cars, mobile phones and air travel.

India’s biggest companies are expected to post an average 25 percent gain in profits in the year ending March 2011, and a further 20 percent in the following year, Naganath said.

Birla Sun Life Asset Management Co., India’s fifth-largest money manager with almost $17 billion in assets, plans to boost stock holdings to as much as 30 percent from 20 percent now, Chief Executive Officer A. Balasubramanian said on May 26.

‘Sweet Spot’

“India is in a sweet spot now,” Balasubramanian said.

“The economy remains insulated from Greece and corporate earnings will maintain a high growth rate. So the correction in stocks is an opportunity for long-term investors.”

India’s small and mid-cap companies will lead a rebound in stocks this year as investors seek out values to tap on the nation’s economic growth, Seth Freeman, chief executive officer at San Francisco-based EM Capital Management LLC said today in a Bloomberg Television interview. Freeman said he’s “overweight” on financial services companies because the banking industry is “a proxy for overall growth in the country.” He also likes technology companies as demand for their services is expected to increase, he said.

The Sensex index of the largest 30 companies is trading at 16.3 times estimated profit, the highest in Asia excluding Japan. It’s also the most expensive among the four BRIC markets, which also include China, Brazil and Russia.

Outpace China

CLSA Asia Pacific Markets’s Christopher Wood, the second- ranked Asia strategist in Institutional Investor magazine’s annual poll, said May 18 he expects India to outpace China’s growth in the next five years with the new developments. Indian equities also have the most attractive outlook in Asia this year, Wood said.

India’s economic growth may accelerate to about 8.5 percent in the year ending March 31, Finance Minister Pranab Mukherjee has forecast. That would be the fastest pace since fiscal 2008.

Source: http://www.businessweek.com/news/2010-05-28/sensex-to-hit-record-on-profits-for-dsp-blackrock-update2-.html

Sundaram Finance not to enter banking or exit MF business

City-based Sundaram Finance group Friday ruled out entering the banking sector and said it will continue with the mutual fund business with or without a partner.

'Converting Sundaram Finance Ltd into a bank provides no advantage. At this level Sundaram Finance can compete with many private banks,' Managing Director T.T. Srinivasaraghavan told reporters here.


'We will be in mutual fund business with or without a partner.'


Asked about market rumours that the group is exiting its non-life insurance joint venture, Royal Sundaram Alliance Company, he said: 'In respect of the insurance, the situation has not arisen for us to take a final call'.


Sundaram Finance has two joint ventures - mutual fund and home finance - with BNP Paribas.


The mutual fund joint venture is under spotlight as BNP Paribas acquired Fortis business outside the Netherlands.


As per Indian regulations, no one can have two mutual fund companies and as such BNP Paribas has to decide between Fortis Mutual Fund and Sundaram BNP Paribas Asset Management Company.


'There are three options for us - buy out BNP Paribas' stakes in the mutual fund business; merge Fortis Mutual Fund with us or selling out our stakes in the mutual fund business. The last one does not arise,' Srinivasaraghavan told IANS.


Asked whether Sundaram Finance will be open to buying out BNP Paribas' stakes in both the joint ventures and run the business independently, he said: 'There is no issue with the home finance venture. The partnership with BNP Paribas has been good till now. But we are committed to mutual fund business.'


He said discussions are on and in a month's time a final decision will be taken.


About the rumours that Royal Sundaram Alliance is on the block, he said: 'We have not spoken to anybody about selling our stakes. I can't say that about our partner - RSA, UK. A stage has not been reached where we have to take a call to be present or exit the insurance business.'


Meanwhile, Sundaram Finance, a player in the commercial vehicle and car finance segments, closed fiscal 2009-10 with a revenue of Rs.1,181 crore and net profit of Rs.226 crore.


The company board has recommended a final dividend of 40 percent.

Source: http://sify.com/finance/sundaram-finance-not-to-enter-banking-or-exit-mf-business-news-default-kf2tEehegfc.html

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Aggrasive Portfolio

  • Principal Emerging Bluechip fund (Stock picker Fund) 11%
  • Reliance Growth Fund (Stock Picker Fund) 11%
  • IDFC Premier Equity Fund (Stock picker Fund) (STP) 11%
  • HDFC Equity Fund (Mid cap Fund) 11%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 10%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund) 8%
  • Fidelity Special Situation Fund (Stock picker Fund) 8%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Moderate Portfolio

  • HDFC TOP 200 Fund (Large Cap Fund) 11%
  • Principal Large Cap Fund (Largecap Equity Fund) 10%
  • Reliance Vision Fund (Large Cap Fund) 10%
  • IDFC Imperial Equity Fund (Large Cap Fund) 10%
  • Reliance Regular Saving Fund (Stock Picker Fund) 10%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 9%
  • HDFC Prudence Fund (Balance Fund) 9%
  • ICICI Prudential Dynamic Plan (Dynamic Fund) 9%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Conservative Portfolio

  • ICICI Prudential Index Fund (Index Fund) 16%
  • HDFC Prudence Fund (Balance Fund) 16%
  • Reliance Regular Savings Fund - Balanced Option (Balance Fund) 16%
  • Principal Monthly Income Plan (MIP Fund) 16%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Principal Large Cap Fund (Largecap Equity Fund) 8%
  • JM Arbitrage Advantage Fund (Arbitrage Fund) 16%
  • IDFC Savings Advantage Fund (Liquid Fund) 14%

Best SIP Fund For 10 Years

  • IDFC Premier Equity Fund (Stock Picker Fund)
  • Principal Emerging Bluechip Fund (Stock Picker Fund)
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund)
  • JM Emerging Leader Fund (Multicap Fund)
  • Reliance Regular Saving Scheme (Equity Stock Picker)
  • Biral Mid cap Fund (Mid cap Fund)
  • Fidility Special Situation Fund (Stock Picker)
  • DSP Gold Fund (Equity oriented Gold Sector Fund)