Automobile scrips rise in fund houses' preference
Automobile scrips rise in fund houses' preference
Automobile stocks are now a key component on fund managers' dashboard. It has become the third-most preferred sector pick for equity mutual funds, even as the industry has had a fall in sales of both passenger and commercial vehicles in the past two years.
Automobile stocks comprise close to Rs 17,000 crore of MFs' equity assets, show the latest statistics from the Securities and Exchange Board of India. Those in the so-called defensives' sectors -- pharmaceuticals and fast moving consumer goods (FMCG) -- have gone down in terms of fund managers' exposure.
About 8.3% of overall equity assets under management has been pumped into automobile stocks (including ancillaries). This is the highest exposure the sector has had in many years. It appears fund managers have positioned themselves well in advance to reap benefits if the scenario turns positive.
"It's mainly the big four-wheeler makers being preferred. On top of it, ancillaries have seen sizable traction," said Nilesh Surana, head of equities at Mirae Asset.
He says there could be an upturn in the sector by the second or third quarter of the current financial year. "More, it's a rate-sensitive sector and growth comes from consumers' discretionary spends," he adds.
The position taken by top fund managers in large carmakers is noticeable. For instance, several of the large equity schemes (including HDFC Top 200 and ICICI Pru Focused Bluechip Equity) have invested three to 4% of their assets in these -- as much as two to four% by some in Tata Motors. Two-wheeler companies such as Bajaj Auto and Hero MotoCorp have also participated in the recent rally. The BSE Auto Index has gained 8.4% so far this year.
In ancillaries, due to lower input costs, the margins have improved for the companies.
The shares of tyre makers have also had a robust run in recent months. For example, those of Ceat have galloped to above Rs 300. Amara Raja Batteries has also surprised the market.
Fund managers say the rally in auto and auto ancillary stocks could have more legs, as demand is expected to pick up in a few quarters. However, they were a bit cautious on two-wheelers.
Till last year, fund managers remained neutral, with a negative bias, on automobile stocks. However, with improvement in the macro economic situation and expectation of rate cuts on a rise, things have started to change.
Banks continue to lead with an exposure of 19.76% of equity schemes' assets. Information technology is second, with nearly 12% of equity assets deployed to stocks in the sector.
BS
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.
Automobile stocks are now a key component on fund managers' dashboard. It has become the third-most preferred sector pick for equity mutual funds, even as the industry has had a fall in sales of both passenger and commercial vehicles in the past two years.
Automobile stocks comprise close to Rs 17,000 crore of MFs' equity assets, show the latest statistics from the Securities and Exchange Board of India. Those in the so-called defensives' sectors -- pharmaceuticals and fast moving consumer goods (FMCG) -- have gone down in terms of fund managers' exposure.
About 8.3% of overall equity assets under management has been pumped into automobile stocks (including ancillaries). This is the highest exposure the sector has had in many years. It appears fund managers have positioned themselves well in advance to reap benefits if the scenario turns positive.
"It's mainly the big four-wheeler makers being preferred. On top of it, ancillaries have seen sizable traction," said Nilesh Surana, head of equities at Mirae Asset.
He says there could be an upturn in the sector by the second or third quarter of the current financial year. "More, it's a rate-sensitive sector and growth comes from consumers' discretionary spends," he adds.
The position taken by top fund managers in large carmakers is noticeable. For instance, several of the large equity schemes (including HDFC Top 200 and ICICI Pru Focused Bluechip Equity) have invested three to 4% of their assets in these -- as much as two to four% by some in Tata Motors. Two-wheeler companies such as Bajaj Auto and Hero MotoCorp have also participated in the recent rally. The BSE Auto Index has gained 8.4% so far this year.
In ancillaries, due to lower input costs, the margins have improved for the companies.
The shares of tyre makers have also had a robust run in recent months. For example, those of Ceat have galloped to above Rs 300. Amara Raja Batteries has also surprised the market.
Fund managers say the rally in auto and auto ancillary stocks could have more legs, as demand is expected to pick up in a few quarters. However, they were a bit cautious on two-wheelers.
Till last year, fund managers remained neutral, with a negative bias, on automobile stocks. However, with improvement in the macro economic situation and expectation of rate cuts on a rise, things have started to change.
Banks continue to lead with an exposure of 19.76% of equity schemes' assets. Information technology is second, with nearly 12% of equity assets deployed to stocks in the sector.
BS
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.
Comments
Post a Comment
You are requested to mentioned your full name with email id while commenting.