Zee Telefilms is the only media stock that forms part of the S&P CNX Nifty and the BSE Sensex. This may be a reason why some funds have stuck to the stock through thick and thin (till June 30, 2003 portfolio disclosures).
Amid worries over falling advertisement revenues during the cricket World Cup and the government's move to cap foreign direct investment in media channels Zee touched its four-year low of Rs 62.5 on March 31, 2003. From this low, it has made a smart recovery gaining 74 per cent to reach Rs 108 on July 18, 2003. Robust earnings growth and expectations of an increase in ad revenues in the post-CAS period is said to have rekindled buying interest.
Though the diversified equity funds have not made any drastic changes, these funds have definitely tried to time their exit and entry into the stock.
At its nadir in March 2003, the number of funds owning the stock had come down to 27 from 31 in previous month. The four funds, which had exited the stock completely were Birla Advantage, Franklin India Growth, HSBC Equity and Tata Pure Equity. The funds with maximum allocation to the stock were UTI Grandmaster (3.51 per cent), ING Growth Sectors Portfolio (3.32 per cent) and Boinanza Exclusive (3.11 per cent). And these very funds had consistently held the stock since its peak in April 2002.
As Zee Telefilms started recovering in April this year, equity funds once again went shopping. The number of funds owning the stock had risen to 35 in May. Birla Advantage and HSBC Equity re-entered in April only to exit once again in June. The other new entrants in April-DSPML Top 100 Equity, Sundaram Growth and Sundaram Select Focus had also made a complete exit in June 2003. In fact, it appears that some equity funds are not too optimistic about the long-term prospects and have preferred to cash in on short-term gains as only 24 funds hold the stock in June 2003.
At its peak of Rs 185 in April 2002 Principal Growth (7.8 per cent), ING Growth Sectors Portfolio (7.21 per cent) and Cholamandalam Growth (5.61 per cent) had the highest allocation to the stock. As the stock fell, only Principal Growth exited in May 2002.
Thus, the Zee stock continues to attract both long-term and short-term players. And if the stock continues to sustain the upward trend along with rise in trading volumes, the long-term investors may have their way.