Morgan Stanley Asset Management is considering various options to win back the investor confidence lost in its 'initial public offering' in 1994. According to Akash Prakash, executive director, Morgan Stanley Asset Management, the fund has no plans to launch any fresh scheme.
"The fund is looking at various options to win back investor confidence," says Prakash. "These include repurchase of units at NAV, paying dividend to unit-holders and making it open-ended. However, no decision has been taken on the issue yet," he added.
The fund has repurchased 5.34 cr units through the secondary market in 1997-98. The corpus of the fund stands at Rs 801.52 cr. The net asset value of the fund as on May 22, 1998 was Rs 10.45. The NAV, for the period since its inception in January 1994 has appreciated by 4.5 per cent against a 14.98 per cent decline in the BSE 200 and a 25.78 per cent decrease in the Crisil 500.
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"We need to change the perception of investors regarding the fund and its performance. While the performance of the fund has improved significantly in the past two years since we began restructuring of our portfolio in 1996, there are people who still believe that we are not performing," he lamented. The fund released its annual report yesterday for the financial year ended March 1997-98. The fund has restructured its portfolio trimming it to 100 stocks against 300 held in 1994.
The top 25 stocks account for 80.90 per cent of the total portfolio. In 1996-97, they accounted for 65.34 per cent and in 1995-96 they accounted for 42.17 per cent.
Its top 25 holdings include BHEL (31.68 lakh shares), Container Corporation(18.46 lakh), Infosys (4.54 lakh), HDFC (2.59 lakh), SBI (14.98 lakh), Zee Telefilms (8.06 lakh), Hero Honda(2.11 lakh), NIIT (2 lakh), Cummins India (2.49 lakh), Hindustan Lever Chemicals (1.4 lakh), Cipla (1.5 lakh), Burruoughs Wellcome (2.3 lakh), Marico Industries (3.34 lakh), Asahi India (1.97 lakh), Wyeth
Ledrerle (1.7 lakh), MRF (0.39 lakh), Hoechst Schering (1 lakh), Nestle (1.61 lakh), Shriram Honda (3.22 lakh), Software Solutions (3.66 lakh),
Bata India (4.09 lakh), Foseco (2.39 lakh), Tata Infotech (0.69 lakh), Vikas WSP (5.49 lakh) and Essel Packaging (3.29 lakh).
The impact of restructuring can be seen in the balance sheet. In 1996-97, the market value of equity shares held in its portfolio was Rs 683.45 cr against the average cost of holding shares in the portfolio of Rs 703.61 cr. In 1997-98, the market value of its investments stood at Rs 734.32 cr against the average cost of Rs 546.86 cr.
According to the balance sheet, the net change in unrealised appreciation of investments was Rs 207.66 cr against a figure of Rs 3.08 cr last year.
This has resulted in the fund transferring a net surplus of Rs 79.98 cr to revenue reserves. The fund transferred a net deficit of Rs 39.35 cr in 1996-97.