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Financial Sectors Favoured

The stock markets are fluctuating & while most investors are worried, it is worthwhile knowing what the fund managers did. Which stocks did they pick & which were dropped?

As the stock market is having everyone worried, it was interesting to know what the fund managers did during this period.

The banking and financial services stocks were in good demand. The fund managers saw buying opportunity in ICICI Bank, HDFC, Axis Bank, Federal Bank and Canara Bank. Interestingly country's largest bank -the State Bank of India - failed to find favour with the fund managers. However, SBI is still part of 142 mutual fund schemes. The BSE Bankex was down by around 12 per cent in January.

  Value *  Shares Bought  No. of Funds
Large Cap Stocks  (Rs cr)  (in lakhs)  (Jan-08)
ICICI Bank  514 75.16 189
HDFC  401 14.59 88
Axis Bank  225 0.4 60
Cairn India  125 118.17 52
Unitech  98 37.34 46
Mid Cap Stocks      
Federal Bank  143 55.28 31
Hero Honda Motors  120 17.97 23
Madhucon Projects  110 11.69 25
Bombay Dyeing & Mfg. Co.  102 13.88 28
Canara Bank 79 28.6 25
Small Cap Stocks      
Sunil Hitech Engineers  23 7.34 3
ETC Networks  23 10.2 3
Balkrishna Industries  18 0.84 9
Country Club (India)  15 2.5 5
NIIT  14 13.66 8
*Increase in Investment
Based upon Dec-07 and Jan-08 portfolios

The fund managers also did buying in select infrastructure companies like Unitech and Madhucon Projects. Balkrishna Industries, which has interests in paper, textiles and tyres, was also among the most bought. HDFC fund family is particularly fond of this company and figures in the portfolios of HDFC Balanced, HDFC Long Term Advantage, HDFC Equity, HDFC Prudence, HDFC Multiple Yield Plan 2005 and HDFC MIP Long Term.

In the sellers list cement and technology stocks were offloaded. Funds diluted their holdings in Grasim, JP Associates and India Cements from the cement pack and Infosys, CMC and NIIT Technologies from the tech sector. Last month JP Associates was among the most bought on the expectation that it will demerge JP Power Ventures from itself and would float an IPO. However severe correction has put several public floats on hold.

Tractor maker Escorts was hammered the most with more than 62 lakh shares of it being sold. The stock, which was part of the four funds in December 2007, is now held by just three funds - JM Auto, Kotak Equity Arbitrage and JM Arbitrage Advantage. Reliance Growth exited the stock completely in January this year.

  Value *  Shares Bought  No. of Funds
Large Cap Stocks  (Rs cr)  (in lakhs)  (Jan-08)
Grasim Industries  699 5.89 114
Jai Prakash Associates  655 34.9 117
Bharti Airtel  632 30.74 135
State Bank of India 601 11.59 142
Infosys Technologies  431 8.58 111
Mid Cap Stocks      
Crompton Greaves  416 10.77 81
Sesa Goa  361 4.55 60
Bharat Electronics  316 3.8 46
Hindustan Petroleum Corpn.  266 37.81 32
India Cements  258 33.56 30
Small Cap Stocks      
Elecon Engineering Co.  180 8.31 28
Escorts  104 62.16 3
Chambal Fertilisers & Chem.  85 6.13 14
CMC  84 0.6 8
NIIT Technologies  81 23.57 19
*Decrease in Investment
Based upon Dec-07 and Jan-08 portfolios