The Hindu Business Line : `Indian cos are catching up with the rest of world'

DON'T wish to hurt yourself? Temper your expectations a bit and you may well be a happy investor. That was the crux of the message dispensed by Mr N R Ramanujam, Managing Director of Canbank Mutual Fund, when Business Line caught up with him recently.

He also turned to the latest developments regarding GIC MF's schemes, which are being taken over by Canbank MF.

Excerpts:

The stock market is particularly volatile and investors are not quite comfortable with volatility of such magnitude. Your comments.

True. Each trading session is characterised by extreme movements in prices. This is evident in so many stocks across various sectors. There is no logical explanation for all this. However, such a trend can actually turn away some investors from the market. Not everybody has an appetite for wild fluctuations. Aggressive investors may actually take a lesson from history and curtail their exposure.

But won't good corporate performance act as a stabilising force?

Corporate profits remain a major driving force for the market. Many Indian companies are catching up with the rest of world and surging ahead in terms of the business they are securing on the international front.

There is a lot of activity in the M&A space. The fundamentals of the economy are improving too. Inflows from overseas investors are good and there are no signs that the situation, as created by a combination of these factors, will reverse in the near term.

Taking a call on the broad indices and the destinations they are headed for will, of course, border on speculation.

What is the latest on the GIC MF acquisition?

We plan to wrap up the deal with an MoU. Unitholders of GIC MF have okayed the move. The compliance part of it is being pursued by them and the formal agreement is expected shortly. Remember, we are only taking over their schemes and not anything else, not even the human assets. The acquisition will provide us with about Rs 120 crore. More importantly, it will add more than one lakh untholders to our family. They are mainly retail investors.

How are your existing equity schemes placed at the moment?

We have been fairly active in spotting opportunities, taking positions and booking profits. You will agree that the market has given us sufficient scope to identify stocks with attractive valuations. This strategy will now be carried forward.

On the fund management front, we will continue to examine the possibility of making fresh allocations on a selective basis.

Also, we have sought to boost our arsenal with another broadbased product, CanEmerging Equities, with the BSE-200 as its benchmark index. Let me mention here that we have already gone through a restructuring exercise and a further round of rationalisation of schemes is likely. A new-look balanced scheme will be introduced shortly.

Does any sector particularly appeal to you despite the run-up?

Well, infotech and textiles are two areas that are being looked at with some interest. Generally speaking the IT sector is currently at an interesting juncture. A number of IT companies have done well in recent times and valuations have moved up.

And textiles, too, look poised for a take-off. Some of the smarter textiles companies have framed big plans of tapping new markets. I think more news will soon start coming in.

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