The average market price on BSE for the six months has been Rs 6.10. This means the fund pumped in Rs 13.78 crore to buyback the units. On the other hand, the buyback operation will help buoy the unit premium reserve since the fund has bought back at an average discount of Rs 3.90 per unit (issue price of Rs 10). Going by the number of units repurchased at a discount of Rs 3.90, the unit premium reserve will go up by Rs 8.81 crore. Since September 30, 1997, the fund has repurchased 4.20crore units from the secondary market. Purchased at an average price of Rs 6.20, Morgan Stanley would have forked out Rs 26.25 crore. On the other hand, the unit premium reserve has gone up from Rs 31.73 crore to Rs 47.65 crore during the year since units were repurchased at an average discount of Rs 3.75.

Morgan Stanley Growth Fund has been ranked number 1 in the last three years and number 7 in the last one year from the basket of 35 closed-end equity funds by Value Research, a Delhi-based agency that tracks mutual funds. Morgan Stanley had received permission from Sebi in 1994 to buyback units from the market at prevailing prices. The discount/premium to the initial issue price is credited/debited to the reserve. Buyback is an effective tool which brings down the number of units outstanding and thereby shores up the net asset value.

The fund's NAV rose from Rs 9.02 on March 27, 1998 to Rs 9.82 and is down from the high of Rs 10.24 on April 30 when the market had rallied to the 4200-level. The currentNAV is Rs 9.22, down 60 paise due the meltdown in equity prices. However, the prices of units on the bourses remain in a narrow range of Rs 6-6.50 which translates into an average discount of 34 per cent to the NAV of Rs 9.22. The fund has been on a restructuring spree since the last two years and now has a defensive composition of stocks which has helped the NAV outperform the indices and sustain it above Rs 9. For the quarter ended September, 1998, the NAV of the fund rose by 14.3 per cent against a 0.9 per cent and 2.5 per cent rise in BSE 200 and Crisil 500, respectively.

According to the fund manager, India is now being accorded a `safe haven' status since it has, by and large, remained insulated from the global crisis. The Indian stock markets are moving in a narrow range and is expected to continue in the short-term. For the current half, the fund has seen an income of Rs 54.45 crore against Rs 9.03 crore in the previous first-half. In fact, Rs 47.04 crore has come from profit on sale and redemptionof investments.