Portfolio reshuffle data available for the month showed fund managers at SBI Mutual Fund bought 1.28 crore shares of NHPC. This came on top of the 2.12 crore share purchase on the counter in January.
Similarly, the fund house bought 33 lakh shares of steelmaker SAIL on top of 5.37 crore bought in the prior month. The SAIL stock has been in heavy demand recently, as steel companies hiked prices on the back of a rise in commodity prices and heightened demand for the commodity. The scrip has gained 145 per cent for last one year.
JP Morgan earlier this week turned ‘overweight’ on SAIL along with Tata Steel and JSW Steel. The brokerage expects another round of steel price hikes by April. Along with that it expects Indian mills to fill up the gap created by the unavailability of Chinese supplies.
SBI Mutual Fund also bought 10-65 lakh shares of GAIL, PNB, ITC, ICICI Bank, ONGC, The Indian Hotels Company, LIC Housing Finance, NTPC, PVR, Hindalco and Equitas Holdings during the month.
Government-owned companies have found favour with money managers in recent times, as analysts believe many of them could be up for re-rating in the months ahead. Moreover, the government is also pressuring PSUs to reward shareholders, which too has lured investors.
The fund house has remained bullish on the market, despite some of the recent hiccups, as it believes the structural factors remain positive, even though valuations have reached record high levels. The market will turn volatile in the coming months, it felt.
“While there may be headwinds valuation wise, as support from low yields wanes, in the early stages of the cycle, earnings improvement should keep equities supported broadly, even as the pace of (market movement) becomes more calibrated. Moreover, as money becomes dearer, expect volatility to pick up,” the fund house said in its monthly outlook.
Domestic stocks have already turned wobbly over the last couple of weeks, and the broader market indices have traded in a range as rising bond yields raised the risk of fund outflow from emerging markets. But SBI Mutual Fund says the current market presents many opportunities for investors.
“Beneath the surface, as the deflationary forces of the past decade wane, accompanying market polarization should continue to reverse. This should mean continued broadbasing of the market performance. This would, in turn, mean more opportunity for alpha generation through bottom-up stock picking,” the fund house said
The stock that money managers at SBI MF sold the most in January was Adani Ports, which has also seen a good spike recently. The fund house dumped 1.07 crore shares of the sea port manager, a trend also seen last month.
The fund house also offloaded 20-70 lakh shares of BPCL, Bank of Baroda, SBI, Bandhan Bank, Bharat Electronics, AllCargo Logistics, Engineers India, City Union Bank and Ambuja Cements.
Some of this buying and selling could have happened due to changes in the composition of the benchmarks tracked by passive funds.
SBI Mutual Fund also took fresh positions in Dr Lal Pathlabs, Esab India, MTAR Technologies, Sundram Fasteners and Vodafone Idea. At the same time, it exited ABB Power Products & Systems India, Fairchem Organics, Tata Metaliks and Thyrocare Technologies.
