Stock picks of the day

The market hasn't been able to sustain itself after facing resistance to end in negative territory. Banks, consumer durables, capital goods, FMCG, IT, pharma and the PSU sector have ended negative in varying degrees while Consumer Durables, pharma and the PSU sector have ended in positive territory. Volume registered a significant increase (read as turnover) while the undertone seemed mixed.

Sensex (Daily)

Last Close – 9257.51; Support – 9176, 9113; Resistance – 9274, 9348

Trading Range – The Sensex opened at 9292.18, moved up to an intra-day high of 9350.82, declined to an intra-day low of 9207.27 and closed at 9257.51.

Review/Outlook – The Sensex has found life difficult at higher levels, has cooled off significantly from its intra-day high after facing resistance at the 9348 level and has actually given a downward key reversal on higher volume to end in negative territory. A range bound movement cannot be ruled out while intra-day weakness could creep in below the 9207 level.

Hero Honda (Daily)

Last Close – 851.80; Support – 841, 819; Resistance – 866, 901

Trading Range – The scrip opened at 865.00, moved up to an intra-day high of 868.90, declined to an intra-day low of 849.00 and closed at 851.80.

Review/Outlook – The scrip has reflected strength by declining from its intra-day high and with the indicators looking negative, a further downside seems to be on the cards.

Asha. Minech (Daily)

Last Close – 941.55; Support – 876, 801; Resistance – 950, 999

Trading Range – The scrip opened at 859.60, moved up to an intra-day high of 941.55, declined to an intra-day low of 848.00 and closed at 941.55.

Review/Outlook – The scrip has reflected strength by moving up virtually from open to close and with the indicators looking positive, a further upside seems to be on the cards.

I.C.S.A. (Daily)

Last Close – 623.95; Support – 608, 581; Resistance – 624, 672

Trading Range – The scrip opened at 606.00, moved up to an intra-day high of 623.95, declined to an intra-day low of 605.00 and closed at 623.95.

Review/Outlook – The scrip has reflected strength by recovering from its intra-day low and with the indicators looking positive, a further upside seems to be on the cards.

Asian Electronics (Daily)

Last Close – 366.40; Support – 352, 319; Resistance – 381, 423

Trading Range – The scrip opened at 370.00, moved up to an intra-day high of 377.00, declined to an intra-day low of 365.00 and closed at 366.40.

Review/Outlook – The scrip has reflected weakness by declining from its intra-day high and with the indicators looking negative, a further downside seems to be on the cards.

A golden year for Indian MF investors

The calendar year 2005 has turned out to be the golden year for the Indian mutual fund investors. The 99 mutual funds schemes have paid hard cash to their investors in the form of dividends against 75 schemes in calendar year 2004.

Thirty-five schemes are back in the dividend list in 2005, while 17 mutual fund schemes that paid dividends in 2004, have not announced any dividend as of yet.

Mutual funds were generous at paying dividend in five schemes. In percentage terms, they paid - Sahara Tax Gain (300 per cent), Principal Resurgent India Equity (235 per cent), Birla MNC Fund (125 per cent), Birla Advantage fund and UTI Master Value Fund (100 per cent each) - thereby topping the table with hefty dividends.

State Bank of India Magnum Sector Umbrella, (72 per cent), Deutsche Alpha Equity Fund, Birla Sunlife Frontline Equity Fund and Reliance Banking Fund (70 per cent each), were other schemes that paid hefty dividends in 2005.

Twenty mutual fund schemes declared dividend between 50 and 80 per cent, of which Reliance Vision, Reliance Growth and Sundaram Tax Saver, paid 80 per cent each. Thirty-eight schemes, paid dividend between 25 and 50 per cent, while 25 others, paid dividend between 10 and 21 per cent.

Thirty-five schemes that paid dividend this year include, mid cap funds, banking funds, growth funds, opportunity funds, dividend-yield funds and sector allocation funds. With the midcap stocks ruling the stock markets in 2005, four of them - Sahara Midcap, HSBC Midcap, ING Vysya Midcap and Kotak Midcap, which were launched in 2004 - paid dividend this year itself.

The other sectoral funds such as UTI Thematic Basic Industries (32 per cent), SBI Magnum Sector Umbrella (72 per cent), JM Healthcare (10 per cent), Reliance Pharma (10 per cent) and Tata Infrastructure (4.50 per cent) were the sectoral funds that paid dividend in 2005.

Among the mutual funds that have declared dividends in 2005, UTI Mutual fund tops the list, with 16 equity-oriented mutual fund schemes declaring dividend in 2005. UTI Master Value, declared dividend of 100 per cent, while UTI Dynamic Equity Plan, UTI Growth & Value Fund - Semi Annual Dividend, UTI Growth Sector Fund - Petro - UTI Masterplus Unit Scheme 91 and UTI MNC Fund, each paid a dividend of 50 per cent.

Seven funds each from the Birla Sunlife Mutual Funds and Reliance Mutual Fund, four each from Cholamandalam Mutual Fund, Kotak Mutual Fund, LIC Mutual Fund, Principal Mutual Fund, Tata Mutual Fund and ING Vysya, eight from Franklin Templeton, six each from the Prudential ICICI and Sundaram Mutual Fund, were also part of dividend paying funds.

Fund houses set to make a killing

Equity mutual funds are set to make record profits of almost Rs 850 crore (Rs 8.5 billion) for their fund houses in 2005-06.

Last year, the fund houses had earned less than Rs 250 crore (Rs 2.5 billion). Portfolios of equity mutual funds rose by 74 per cent or Rs 28,640.25 crore (Rs 286.4 billion) to Rs 67,352.72 crore (Rs 673.53 billion) during the first eight months of 2005-06.

This is expected to result in a record income for the industry as fund houses charge management fees of 1.25 per cent on their equity schemes based on the size of a portfolio.

Management fee is computed on a daily basis and for April-November, it comes to Rs 524 crore (Rs 5.24 billion) by taking assets under management at the end of each month. Even if the assets remain at the same level as in November, the fund houses will earn Rs 84.19 crore (Rs 841.9 million) per month for the rest of the year and the annual fee will cross Rs 850 crore by March 2006.

The assets under management of top 15 open-ended equity diversified funds have increased by 43.31 per cent or Rs 7,694.23 crore (Rs 76.94 billion) during April-November 2005 to Rs 25,460 crore (Rs 254.6 billion).

"With the assets growing, the fee is going to increase substantially," said an executive with Franklin Templeton Mutual Fund.

Franklin Templeton is expected to be one of the biggest gainers with Franklin India Flexi Cap, having the second largest portfolio for equity schemes at Rs 2,207.59 crore (Rs 22.08 billion). Its Franklin India Prima scheme is a close third with an asset size of Rs 2,107.43 crore (Rs 21.07 billion).

Interestingly, Fidelity Equity Fund, which was launched in April this year, has raced to the top of the heap with a portfolio of Rs 2,668.32 crore (Rs 26.68 billion). SBI Mutual Fund's Magnum MultiCap Fund, launched as late as September 16, had a portfolio of Rs 2,085.38 crore (Rs 20.85 billion) at the end of November.

According to latest data, four schemes have portfolios of over Rs 2,000 crore (Rs 20 billion). There was none at the Rs 2,000-crore mark at the beginning of 2004-05.

The swelling portfolios also give players flexibility in managing their expenses, which are capped at 2.25 per cent of the portfolios for equity schemes.

The industry is cashing in on the boom. Thirty-one new equity diversified schemes were launched in 2005, taking the total in the category to 142. Altogether, the mutual fund industry launched 47 new schemes this year.