The Hindu Business Line : `We advise our unit holders to stay invested'

Standard Chartered MF's new-found love for equity, after staying dedicated solely to debt for long, has now become stronger, indicates Mr Naval Bir Kumar, MD. While Indian stocks have indeed become more expensive in recent days, fairly good corporate results, as witnessed after Q4 of 2005-06, should help sustain the market, he told Business Line.

Excerpts.

With so much uncertainty, isn't there a case for realigning your view on equity?

Yes, there is volatility all right but there is no reason to change what we essentially feel about Indian stocks. The corporate results that have flown in so far are quite decent on the whole. These should prompt investors to stay on in the market. In fact, we advise our unit holders to remain invested, the unpredictability notwithstanding.

The idea is simple: In our opinion, the average investor tends to lose out if he or she is in the habit of flitting in and out of the market. So, to answer your question, we are not modifying our stance on equity. However, that does not mean that valuations have not escalated.

With regard to your latest product, you will have to monitor quality of IPOs very closely...

Right, the newly-proposed Enterprise Equity Fund will participate in equity offerings. Let me point out that the IPO pipeline is set to explode, given the sheer number of offers that have been conceived. We will select from among these carefully.

The quality of promoters will be a consideration. You may argue that the number of quality IPOs may decline in the days ahead.

But it is needless to say that good companies will keep on tapping the capital market as their businesses grow.

The pipeline therefore will not go empty. And for investors, this will be a case of style diversification as well.

In Premier Equity Fund, is the portfolio a bit too concentrated?

No, we have over 30 stocks, which in a way reflect its investment objective.

The portfolio is spread over more than a dozen sectors. The fund, which aims at creating wealth over the longer term, has been performing well lately and we hope the trend will sustain.

Remember, Premier Equity was a fund that sought to limit the corpus size at the time of the launch, a move that was in line with its philosophy.

StanChart MF was till recently focused entirely on debt. Has it stopped innovating on this front?

We have lately introduced one or two funds for those who invest for shorter durations. Debt, you will appreciate, seems to be a bit on the backseat right now even while sentiments are buzzing around equity.

We should point out that several aspects of the debt market have changed recently and investors are aware of these changes.

At another level, we see scope for conceiving newer products of the hybrid variety.

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