The Hindu Business Line : `Correction was triggered by technical and fundamental factors'

Now, the decision to sell a stock depends on factors like its reaching the target price, change in external and internal environment of the company and market conditions.

MR.PANKAJ RAZDAN, MD, Prudential ICICI Mutual Fund

Kolkata , May 21

The stock market is rolling down as quickly as it had spiralled upwards. Like other fund houses, Prudential ICICI MF is closely watching the situation.

Mr Pankaj Razdan, MD, takes into account the incessant and widespread north-bound rally.

Excerpts:

It has been one wild downturn after another in the equity market. How do you see this?

We had been expecting market volatility since a while now and were cautious in the short-term, even as we continue to believe in the strong fundamentals of our economy and growth prospects of Indian stocks in the long term.

Volatility, to repeat a point, is an inherent characteristic of the equity market. There was a continuous broad-based upward rally as a result of which an adjustment was imperative on the back of some investors booking profits. The correction was triggered by technical and fundamental factors concerning global markets. These include a hike in Fed rates and a drop in commodities and other asset prices. Our job as investment managers is to tap opportunities and minimise risks in every market. This mandate does not change with time or conditions. We think investors should use every correction in the market as an opportunity to invest at lower levels.

Given the volatility, is it time to turn more to cash/liquid assets, at least moderately?

As you know, each scheme has a well-defined investment objective and pre-defined investment pattern. We will seek to maximise benefit to the unit holder by operating within the framework made available under the relevant offer document. Cash is a good defensive strategy and so is hedging of portfolios.

Can investors now expect Pru ICICI MF to book some profits?

We continue to believe that India, given its fundamentals, is a good destination for long term equity investment. I mean, every one knows about India's positive demographics, infrastructure spending and prospects for corporates. Now, the decision to sell a stock depends on factors like its reaching the target price, change in external and internal environment of the company, market conditions and availability of other opportunities. Our mandate warrants us to look for investment opportunities in all market conditions.

Are there any new launches, may be on the fixed-income side?

We already have a fairly wide range of products on the debt side. It was augmented last year with the launch of Pru ICICI Blended Plan, an arbitrage fund that is slightly higher in its risk-return profile than our Liquid Plan. A few fixed maturity plans are expected this year. But the one category that we would love to foray into is capital guaranteed products. Considering the demand that is envisioned, we are hopeful that going ahead on this count.

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