India’s Top Managers invest while Modi wins in May

Prime Minister Narendra Modi’s re-election in May caused an inflow of Indian Equity Mutual Funds. Association of Indian Mutual Funds claimed top Portfolio Managers earned INR 54.1 billion (USD $778 million). This figure was an increment of INR 46.1 billion in April.  

What the top 3 India’s Portfolio Managers bought and sold in May 2019?

1. India’s top money manager of HDFC Mutual Fund owned $22 billion in equities. Of these, the financial accounts comprised 34% of stock assets and 14% industrial companies. Details of stocks/assets shown as follows:  

New Buys/Exist:

• Birlasoft  27,000+

• Colgate-Palmolive India  11,200+

• ICIC Securities 344,000 -

• South Indian Bank 170,000-

• Havells India  10,000-

Added/Reduced Stakes:

• Bharat Heavy Electricals 30,077,000+

• Bank of Baroda 9,047,929+

• DCB Bank 8,618,610+

• Power Grid Corp. 11,240,006-

• State Bank 8,061,431-

• Petronet LNG 3,996,000-

1. India’s second money manager of ICICI Prudential Mutual Fund owned $19 billion in equities. Of these the financial accounts comprised of 28% stock assets and 9.5% in materials. Details of stocks/assets shown as follows:  

New Buys/Exist:

• Prudential ICICI Technology Fund 241,643 +

• Neogen Chemicals 141,364 +

• CPSE ETF  4,676,839-

• ICICI Prudential Ultra Short Term Fund 191,526-

• Tata Steel Partly Paid Shares 100,109-

Added/Reduced Stakes

• Vodafone Idea 61,208,917+

• NTPC 12,899,499+

• ICICI Prudential Floating Fund 11,671,173+

• Coal India 7,669,121-

• Vedanta 6,088,710-

• Tata Motors 4,212,099-

2.India’s third money manager of SBI Funds Management owned around $22 billion in over 300 stocks. Of these, the financial account comprised of 38% stock assets and 10% in technology.  Details of stocks/assets shown as follows:

New Buys/Exist:

• Godrej Industries 55,500+

• Gruh Finance -3,745,000

• Apollo Tyres -1,156,000

• Gayatri BiOrganics -452,200

Added/Reduced Stakes

• Vodafone Idea 15,458,048+

• Motherson Sumi 8,450,958+

• Bharti Airtel 8,239,760+

• ITD Cementation 4,446,367-

• LT Foods 2,966,474-

• ICICI Lombard 2,438,486-

NEWS as on 23rd May 2019:

There was global tension before Modi’s landslide victory in the 2019 general elections. On 22nd May 2013, the SENSEX reached 40,000 and Nifty reached 12,000 for the first time ever. However, this peak fizzled out during the last trading hours as on 23rd May 2013. This is because investors shifted focus to other challenges such as earnings downgrade and economic slowdown.

At that point in time, the SENSEX closed at 11,657.05 or 0.69% (down 80.85 points).  Meanwhile, Nifty ended at 38,811.39 or 0.76% (down 298.82 points). This caused both SENSEX and Nifty to post their biggest intra-day falls in 11 years. SENSEX fell to 1,313.57 points and Nifty fell to 384.1 points from the highest records.   

How did the Global Market Influence Equity Mutual Fund Markets?

Present Global Market has influenced the stock market – SENSEX and Nifty. The instability has been caused after China and the USA trade war. Also, the political uncertainty across the European Union has caused slippage in the global stock market. Stock Market has slipped by 1% in China, Hong Kong, Japan, Germany, UK, and France.

Reports from Indian Analysts of Stock Market:

Analysts of the stock market namely Kamlesh Rao, MD and CEO, Kotak Securities, commented on its instability. The global geopolitical tension and India’s economic slowdown caused market slippage.

Raamdeo Agrawal, co-founder, Motilal Oswal Financial Services mentioned strategies that should be taken by new Modi administration. The government should improve the stock market for funding domestic developmental requirements. The Indian government can earn resources in lakh crores from improving PSU management and judicial investment. Thereafter, it should focus on smooth capital flow to entrepreneurs. The government hates lending money; however, finding funds would be possible working closely with RBI.  

Vinod Nair, research head, Geojit Financial Services, has commented on the future of the stock market. The stock might face mild consolidation in the short-term due to lack of earnings and economic growth. Both of these should have occurred in the 1-2 quarters and stabilised.  

R.K. Gurumurthy, head, treasury, Lakshmi Vilas Bank, mentioned as follows. The financial markets and investors should turn to RBI MPC in June. This would help in improving liquidity, resolving issues related to poor growth in a low inflationary environment.  R.K. Gurumurthy has added that there are major concerns on how the financial shortfall would disparage out. This would occur even in the presence of global trade-war, poor domestic economic growth. There is hope for improvement reaching 7-8% range of better platform. People are hoping for improved domestic economy growth since Modi’s landslide victory during the Lok Sabha election of 2019.