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What's hot, what's not with mutual funds?
Reena Prince,
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January 11, 2007

Mutual funds bought metal, media, telecom, engineering, and pharma stocks in December. Selling was seen in manufacturing, sugar, FMCG, chemical, and construction stocks, while stocks were re-aligned in the information technology, oil & gas, cement, and auto sectors.

Funds bought huge chunks of auto ancillary stock Exide Industries, but diluted exposure to engineering stock KEC Infrastructure, a stock they had been accumulating since the last two months.

In terms of value, Ansal Properties, Tata Steel, and Satyam Computer were the top purchases by MFs, while Infosys Technologies, Hero Honda Motors, and Aditya Birla Nuvo topped the sell list.

Among the equity IPOs that listed in December, Sobha Developers saw extensive buying by funds. Over 12.2 lakh shares of the stock was bought by seven of the top 10 MFs. UTI, Birla, and Templeton MF were the top investor in Sobha Developers with each purchasing over 3 lakh shares. Stanchart, SBI, HDFC, and Tata MF also invested in this equity IPO. However, several other equity IPOs including Blue Bird (India), Ruchira Papers, LT Overseas, XL Telecom, Nissan Copper, and ESS DEE Aluminium that listed in December, failed to attract funds.

Top shares traded by MFs                             (based on volume)
Top 5 shares boughtNo. of Shares
Exide Industries14,153,247
Ashok Leyland13,533,183
Hindalco Industries13,166,880
Tata Steel7,888,371
India Cements6,070,969
Top 5 shares soldNo. of Shares
KEC Infrastructures11,628,829
Hind Motors3,932,346
Welspun India3,102,568
Essel Propack2,225,598
A study of the top ten mutual funds' equity portfolios as on December 29, which are UTI, Prudential ICICI, Reliance, HDFC, Templeton, SBI, Birla SunLife, Tata, StanChart, and DSP ML MF reveals that HDFC MF was the sole buyer of Exide Industries with over 142 lakh shares bought. However, StanChart and Pru ICICI MF pared exposure to the stock.

Ashok Leyland, the second top buy in terms of volume, witnessed a trend reversal in December as it was bought by five MFs with HDFC MF being the top buyer with over 110 lakh shares bought, while Templeton, Tata, and UTI MF pared exposure to the stock.

Among other auto stocks, Shanthi Gears, and Tata Motors were among the top 50 buys, while Hero Honda, and Hind Motors were sold.

KEC Infrastructures - the top sell was sold by four MFs. SBI MF with over 45.7 lakh shares sold was the top seller of the stock. Among other engineering stocks, Cummins India, and Siemens were bought.

Top shares traded by MFs                             (based on value)
Top 5 shares boughtValue (Rs in cr)
Ansal Properties386.76
Tata Steel380.46
Satyam Computer257.59
Hindalco Industries229.24
Reliance Industries225.95
Top 5 shares soldValue (Rs in cr)
Infosys Technologies205.08
Hero Honda Motors122.19
Aditya Birla Nuvo98.70
HCL Technologies92.86
Ansal Properties - the top value buy was bought by eight of the top 10 MFs. HDFC MF was the top buyer of the stock with 14 lakh shares bought. DSP ML, Templeton, Reliance, Birla, and UTI MF also made fresh investments in the stock, while Pru ICICI, and Tata MF added to their investments in it. Among other construction stocks, Gammon India, IVRCL, and Mahindra Gesco were sold.

IT bellwether Infosys - the top sell in terms of value was dumped by seven MFs. HDFC MF was the top seller with over 3.2 lakh shares sold. However, Birla, StanChart, and UTI MF added to their investments in the stock.

Among other IT stocks, Patni, HCL Technologies, and Tulip IT were among the top sells, while Satyam, KPIT Cummins, Wipro, Infotech Enterprises, and Cambridge Solutions were among the top buys.

Among other sectors, metal, media, telecom, and pharma witnessed buying. Metal pivotals Hindalco, Tata Steel, Sail, and Sterlite Industries were bought.

Media stocks TV18, and NDTV, and telecom majors MTNL, and Bharti Airtel attracted funds. Pharma stocks Dr Reddy's, and Cipla too saw buying interest.

Meanwhile, manufacturing, sugar, FMCG, and chemical stocks weighed heavy on the sell list. Manufacturing stocks Welspun India, Vardhman Textiles, Jain Irrigation, Ballarpur Industries witnessed selling. Sugar stocks Balrampur Chini, Sakthi Sugars, and Dwarikesh Sugar; FMCG stocks ITC, Emami, too were sold. Among chemical stocks, United Phosphorous, GNFC, Asian Paints, and Tata Chemicals were sold.

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