Private funds up mid-cap holdings

MUTUAL FUNDS OVERVIEW

Private mutual funds, which were net sellers in the equity markets during the quarter ended September 2004, have increased their holding in mid-cap stocks.

The equity portfolio of 55 equity-oriented schemes managed by 18 private fund houses shows that these funds have bought 178 million shares and sold 154 million shares during the quarter ended September 2004.

The private funds were buyers in mid-cap stocks such as TV Today, Birla Corporation, Arvind Mills, Indian Hotels, Indian Rayon, Chennai Petroleum, Bharat Electronics, Shasun Chemicals, Balarampur Chinni and Bata India. 
 

Finding favour
Top 10 stocks in private funds' list	Value*	Shares**
Infosys Technologies	547.69	3,381,994
State Bank of India	498.58	10,675,517
Grasim Industries	459.68	4,209,154
Reliance Industries	403.74	7,792,833
Satyam Computer	355.94	9,504,154
ONGC	310.06	4,485,075
BHEL	286.94	4,995,310
ITC	283.48	2,689,777
Mahindra & Mahindra	275.36	6,481,737
TCS	260.32	2,537,618
*Market value (Rs crore) as on September 30, 2004 **No of shares held as on September 30, 2004

An analysis of the equity portfolio data sourced from mutualfunsindia.com shows that investments in equities by private fund houses centred around 150 stocks. The aggregate value of investments in 570 million shares was valued at Rs 14,246 crore as on September 30, 2004.

The portfolio value of private funds increased by almost Rs 2,000 crore between July-September owing to a 16 per cent rise in market valuation of stocks.

The portfolio analysis between June 30 and September 30 shows that the 55 schemes exited from 164 companies valued at Rs 1,802 crore, while they purchased 210 stocks valued at Rs 2,369 crore.

The fresh buying was made in stocks offered in the public issues during the quarter, while the selling was largely in the form of profit booking. The sectoral analysis shows that private mutual funds were fresh buyers in bank, media and entertainment, refineries and petrochemicals shares.

The selling was mainly in automobile, cement, fast-moving consumer goods and engineering stocks. The holding in bank stocks increased by 9.6 million shares to 39.64 million shares, media by 2.88 million shares to 16.94 million shares and refineries by 3.22 million shares to 43.94 million shares.

Private mutual funds' liking for automobile shares is receding fast as their holding in this sector declined by 16.46 million shares to 64.12 million shares.

These funds sold around four million shares of cement and engineering sectors each. Private funds, however, preferred to hold stocks of software and pharmaceuticals companies.

Private funds continued to be major investors in software, automobile, refineries, engineering, pharmaceuticals and banking sectors.

The 36.81 million software shares sold by the funds were valued at Rs 1,955.50 crore. The funds hold 43.94 million shares of petrochemicals and refineries worth Rs 1,474.57 crore, 33.88 million shares of engineering firms valued at Rs 1,188.75 crore, 39.64 million shares of banks valued at Rs 1,036.88 crore and 20.30 million pharmaceutical shares valued at Rs 961.47 crore.

Union Bank of India, which was in the news over its merger plans, was in good demand during the period.

Frankline Prima Fund, Reliance Vision and Prudential ICICI Growth Plan together with five other schemes purchased 80 lakh shares from the market.

Around 39 lakh shares of Tata Steel were bought by Tata Mutual funds, Kotak Mutual Fund, HDFC and Frankling Blue Chip Fund.

The private funds invested Rs 260 crore in the TCS public issue.