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Tuesday, Sep 10, 2002

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Fund managers still upbeat

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MUMBAI, Sept. 9

DESPITE the panic selling and lack of clear direction from the Government on disinvestment, fund mangers are still upbeat on PSU stocks.

They said most of the PSU stocks are still attractively priced, and would, in fact, provide good dividend yield after today's fall.

Mr Ravi Mehrotra, Director and Chief Investment Officer (Equity), Templeton Mutual Fund said: "The fall in PSU stocks is a panic reaction from the market players, but there is fundamental value in most of these stocks.''

He said stocks such as BPCL, HPCL and Concor provide good dividend yield and are quoting at P/E ratios of around 5-6 times their earnings.

Mr S.V. Prasad, President, Zurich Mutual Fund, remarked that the Government has only postponed its decision on disinvestment of BPCL and HPCL, but has not gone back on disinvestment itself.

He cited the cases of Engineers India, Shipping Corporation and Nalco. "The disinvestment in these PSUs is still on,'' he said.

However, Mr Prasad said Zurich has reduced its holding in some of the PSU stocks since the beginning of this month after reports that BPCL and HPCL disinvestment would be delayed.

Zurich Mutual Fund has an investment portfolio of around Rs 150 crore (market value as on August 30, 2002) in PSU stocks with BPCL, HPCL and ONGC among the top holdings in some of its schemes.

But Mr Prasad maintained that most of these stocks were bought by the fund at lower levels based on their dividend yield and sound fundamentals.

Sun F&C Mutual Fund, Chief Investment Officer, Mr Gul Teckchandani said: "The heavy selling in PSU stocks was a panic reaction, but there is good value in these stocks at these levels.''

He also noted that the PSU disinvestment in BPCL and HPCL has been only delayed and not dropped altogether.

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