panch-tattva talk…MF assets at all time high


The assets under management with MFs total Rs 6.38 lac crores worth. This is all time high figure of AUM with MFs. This has come about due to sharp upward movement in equity prices and there have been fresh flows too. Reliance MF and HDFC MF are the largest and second largest fund houses. At one time in Indian history there was just one such house and was govt controlled ie Unit Trust of India. Its chairman Mr Pherwani used to be called the big-bull of India because it was UTI that was buying into markets whenever there used to be any melt-down and prop up the market. This was in eighties. After Harshad’s entry the rules were changed and he was able to take under influence the honourable public figure like Pherwani and this eventually made Mr Pherwani to commit suicide. UTI it self came into trouble when in times of another operator Ketan Parikh, UTI went for some wrong investments and eventual melt-down made UTI very very vulnerable and the govt’s financial help only could resurrect it. All this has made UTI only an ordinery player now.

‘Bajajhind’ has bought back $17.93 million worth of FCCBs at some discount. The outstanding FCCBs amount to $101 million now. ‘Bajajhind’ scrip saw a 6.6pc rise to close at 160/-. In fact the news of buying worth Rs100 crs of FCCBs has added Rs150crs of market capitalisation, do you think bulls are not at work. Very shortly the outstanding FCCBs will become a concern as the oil is going up very fast and would enhance India’s requirement for dollars for oil purchase. This will see dollar improve in value and be headache of borrowers in foriegn currencies.

Steel, Aluminium and Sugar prices are at low/normal levels and are nealy at par with last six month average prices but the scrips in these sectors have flared up. Do we not know some thing that others know or there is a plan to dump stocks back on gullible individual investors who have just started to participate in markets.

When I look at individual Nifty/Sensex stocks, I hardly find now any of those as safe buys. Why then Nifty is keeping at highest level in last nine months, is the question. You may have noticed that from being an absolute optimist before the elections, I have now become an skeptic. This is for two reasons, one that the level of my expectation has reached and secondly, I think budget will require corporates to contribute more to govt’s kitty as the earlier leakages have to be made up and future high expenditure for social causes has to be covered. The defence also has become a critical issue with Pak related developments and China-Pak related matters. The defence preparedness has become a priority once again.

USA also, in interest of its arms manufacturers, will some how covertly encourage arms race. It has been doing such things and now it is also faced with economic crisis. Its war cries had subdued after the 9/11 fiasco. If there is perceived no security for America, I think it will not mind the burning of rest of the world. It has been perpetrater of many a wars and has been basically responsible to propel the need to have atomic bombs and delivery systems and get ready for ‘starwars’. Its policies in sixties and seventies made USSR go for extensive defence expenditure and this,in fact, brought the communist ‘citadel’ down. The Indian leftist policies of the same era have seen such industrial behemoths come up which are envy of the world. Socialism aimed at benefitting society can never be a failiure. When under its garb, the power grabbing is aimed, does it fail. Isn’t USA now trying out the socialistic approach to solve its problems.


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