"UTI eyes Rs 7,500-cr mopup in 6 months"
A F Rosemary
UTI is said to have mobilised a lot of money in the past six months. Please comment on the collection pattern. Do you think that the number of zero-risk investors is on the rise?UTI has collected around Rs 7,500 crore during the last six months, which is twice the amount collected during the period in the previous year. US'64 alone raised over Rs 3,300 crore and the debt-oriented income schemes have been able to raise around Rs 3,000 crore. I expect that a similar amount will be raised in the coming six months as well. The investor preference over the past few years seems to have shifted in favour of assured income products, which limit the downside. However, I agree that assured returns should be phased out in time. US'64 does not offer assured returns, but still people come because of its track record. The mutual fund industry has been looking up over the past year, so the confidence of people should improve. In the next year, we would possibly do away with assured returns or restrict them to onlya small class of persons. What are your comments on RBI's recent measures to curb excess liquidity in the market? The measures were necessary to curb the unwarranted and high speculation in the forex market. With the monetary policy now becoming more consistent with RBI's exchange rate policy, we expect the exchange rate to stabilise at a more realistic level. With the rupee stabilising, the sentiment in the stock market would also improve. The institutional investors, including us, are likely to be more active as stocks are priced at very attractive prices. UTI has appointed three asset management committees to manage its family of schemes. What has been the benefit of this move? The asset management committees have provided additional management inputs to the functioning of the schemes. Each committee has met 5/6 times to review the performance of the schemes and provided useful inputs to the fund managers and the UTI board. The process of performance has been strengthened by assigningthe schemes to these committees. They enable us to monitor the schemes more closely and benefit from expert advice of the committee members. How are UTI's overseas schemes shaping up? Is there any difference in the way overseas and domestic investors perceive the Indian market? During the past two years we have launched four domestic equity funds and they have received a lukewarm response from the investors. However, the overseas investors showed greater interest in equity funds though they have preferred sector-specific funds. On the other hand, while the overseas investors did not show much enthusiasm for the India Debt Fund, the domestic investors are very enthused by income schemes. We are however considering sector-specific equity schemes for the domestic investors now. We are assessing the potential demand from Indian investors and will introduce the schemes at the appropriate time. We are thinking of sector-specific schemes in the multinational, banking and services, pharma and turnaround
companies' sectors. Overseas, also, we are planning some more sector-specific funds in the infrastructure and maybe the energy and power sub-sectors. UTI must have participated in several bought-out deals over the years. How do you rate those investments in retrospect. Since the market is bad, you must be finding it difficult to get rid of these stakes. There is no generic strategy to get rid of the stake. Some of the companies are doing well and some others are expected to do well in the course of a year or two. We expect to get reasonable returns from these investments and we will disinvest at an appropriate time. Has UTI's stock lending activity taken off? We are very keen to start stock lending, but the eligible stock-lending intermediaries have yet to start their operations. As soon as they are ready, we can start lending stock.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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