The Indian stock market is increasingly getting institutionalised. As the domestic fund managers control assets of over Rs 75,000 crore, they lead the market with their bets. With many fund managers disclosing their portfolios every quarter, we have made an attempt to figure out a fund manager's preferred stocks and not-so-preferred ones.After digging through the fund portfolios, we were able to zero-in on the stocks which have found favour with fund managers and those which were shunted out from the portfolio list. The comparison is based on the net position of holdings of 30 funds on two dates during the fourth quarter - September 30 and December 31, 1997.
An analysis of the variance in their portfolio position is the result in the accompanying tables. The variance is reflective of the fund managers' views and actions on specific stocks.
Banking and Consumer stocks were among the favourite buys in the fourth quarter of 1997. In addition, fund managers seemed to favour growth blue-chip companies. Theinteresting inclusion in several portfolios was Corporation Bank, after its recent IPO. At least 10 funds hold Corporation Bank.
These include six equity funds from JM Mutual Fund, two funds from Alliance, DSP Equity fund and Sun F&C Value Fund have an exposure in Corporation Bank.
Other banking stocks that were in limelight include HDFC Bank where Alliance has increased its stake while DSP has more or less divested. Interestingly, 11 of the 30 funds have shed the largest bank stock- State Bank from their portfolio.
The two value funds, Templeton and Sun F&C continue to have an exposure in Oriental Bank of Commerce. DSP is the only fund to shed HDFC while Alliance, Bluechip, Prima Plus, Top 200 and Sun F&C have maintained exposure in the stock. IFCI has also been on the buying list with Prima and Alliance increasing their exposure while Sun F&C has maintained it.
Among consumer durables, fund managers have been very active at the HLL counter. While DSP equity and Bluechip have divested from thecounter, Alliance '95 and Birla Advantage have increased exposure. Magnum Multiplier, GIC Fortune '94, JM Balanced, JM Equity, Alliance Capital Tax Relief and Top 200 have maintained their exposure in the stock.
Fund managers have also been active on counters of P&G and Ponds between September and December, 1997. During the period, DSP Equity fund divested heavily in RecKitt & Colman.
Pharma stocks have also found favour with at least three funds increasing exposure in Smithkline and three others maintaining it. Moreover, while Birla Advantage increased exposure in Knoll, four other funds maintained it. Four other funds have maintained exposure in Burroughs Wellcome (India) Ltd.
Sales during the fourth quarter were marked by a mass exodus from infotech stocks, led by Satyam Computers and Infosys. Around 2 lakh Infosys stocks were sold by Alliance '95, DSPML Equity Fund, ITC Top 200, Kothari Pioneer Bluechip and Birla Advantage.
On the other hand, KP Prima Plus, Alliance Capital Tax Relief, SundaramGrowth fund and Sundaram Taxsaver '97 have maintained their exposure in the counter.
Alliance also sold around 2.6 lakh shares of Satyam Computers. Alliance and DSP Merrill Lynch have divested heavily from Tata Infotech while two funds from Kothari Pioneer have more or less maintained their exposure in the scrip till December. Bluechip has since moved out of the counter.
It was not as if the entire infotech sector was on the dis-investment list. Even today, around 12 fund have a more than 10 per cent exposure in the sector. Alliance 95, ACTR, Bluechip, Prima Plus, Prima, Sun F&C Value Fund, ITC Top 200, Apple Platinum, Goldshare, Birla Advantage, Sundaram Growth fund and Sundaram Taxsaver '97 among others continue to have a substantial infotech holding.
Most funds have maintained exposure in Mastek NIIT and Digital. Kothari Bluechip has moved into Digital in February and is today one of its top five holdings.
Among PSUs, Alliance has divested heavily while ITC increased it exposure by 100 percent inBHEL. The HPCL counter saw heavy disinvestments by Templeton and DSP equity fund. On the other hand, Top 200 and Alliance '95 increased their exposure in HPCL.
GIC fortune, Bluechip, Sun F&C, ACTR, JM Equity, JM Balanced, Prima Plus, Magnum Multiplier, Sundaram Growth and Sundaram Taxsaver maintained their exposure.
Among the other petrochemical stocks, DSP divested heavily from ONGC, it bought heavily into Cochin Refineries. Templeton and Top 200 more or less maintained their exposure in Cochin Refineries. Castrol saw heavy buying by Birla, DSP equity and Top 200. DSP and Templeton also increased their exposure in Reliance.
Templeton and JM Balanced divested heavily in MTNL. DSP Equity and Top 200 increased their exposure while Birla Advantage, Sun F&C, MMS, JM Equity, Bluechip and Prima Plus maintained their exposure at MTNL counter. Magnum Multiplier, Prima Plus, Top 200 and Sun F&C maintained their VSNL exposure.
GIC Fortune continues to maintain its heavy PSU exposure with investments in HPCL,EIL, MTNL, GAIL, Indian Oil, KIOCL and Neyveli Lignite.
In other stocks, Top 200 divested in Hindalco, Templeton in TELCO and DSP in TISCO. Madras Cement was another counter where funds sold heavily. Kirloskar Cummins, Sundaram Clayton and Hind Power Plus were counters where funds were active.
These stock positions are, at best, pointers based on action of fund managers, manning 30 portfolios. Before following their footsteps, investors should take a closer look before committing individually.
