|
Friday October 30, 09:00 PM
|
|
POLL - Funds may shift more towards midcap stocks
By Supantha Mukherjee
MUMBAI (Reuters) - A majority of Indian equity fund managers are inclined to increase their exposure to mid-cap stocks companies which performed better than largecaps in the last month, a Reuters poll showed.
Half the fund managers polled by Reuters said they were looking to increase exposure to midcaps, while 62.5 percent said they would be neutral to negative on large-cap stocks in a poll conducted between Oct. 20 and Oct. 30.
"What has happened is that over last one year the valuation gap between midcap and large-cap has widened, that in my view will narrow... and midcaps will consistently keep showing a surge," said Jayesh Shroff, fund manager at SBI (SBIN.NS : 2242.9 -11.75
) Funds Management.
"Primarily I feel that the broader market will outperform the mainstream indices."
India's benchmark index fell 7.2 percent in October compared with a 6.2 percent decline in the broader BSE (^BSESN : 16632.01 -222.92) 500 index in the same period.
None of the eight fund firms who took part in the Reuters Asset Allocation Poll conducted between Oct. 20 and Oct. 30 now find the Indian index undervalued, while three-fourths said the 30-share BSE index was fairly valued.
Half of the fund managers expect the Sensex to go up by 5 percent to 10 percent in the next three months while a quarter estimate it to go down in the same range.
Fund managers are looking to reduce exposure in metals, financials and FMCGs, while engineering, construction and technology firms may attract funds, the poll showed.
Autos may also underperform, fund managers say.
The growth of numbers seen in auto stocks during Diwali is declining, said Sajit Pisharodi, a fund manager at Kotak (KOTAKBANK.NS : 763.7 -20.5) Mahindra Asset Management.
"The initial stimulus was because of sixth pay commission and all but that effect is getting over now. So, there is no trigger for too much growth there," Pisharodi said.
About half the managers polled are also looking to increase their exposure to healthcare.
"The problems faced by domestic healthcare firms in developed market are behind them and they are showing good numbers," said Shroff of SBI Funds.
Technology firms are going to benefit from increased IT spending as the global economy is coming out of recession, he added. About 75 percent of the fund managers in the Reuters poll said they were looking to boost their investments in the sector.
A majority of the balanced funds managers, who invest both in equities and bonds, are not looking alter their portfolio mix but a third of them seek to raise their cash holding by cutting their exposure to equities and bonds.
(For more news on Reuters Money visit http://www.reutersmoney.in)
