Satish Ramanathan, Head (Equity), Sundaram BNP Paribas Asset Management Co
Ritesh: How is the current investing environment?
Ramanathan: It’s a little uncertain. Valuations are stretched for large-caps and low liquid stocks are moving up quickly, which is a little unsettling.
Edberg: What do you think about the tussle between the Securities and Exchange Board of India (Sebi) and Insurance Regulatory and Development Authority (Irda)? Do you think Sebi should control unit-linked insurance plans (Ulips)?
Ramanathan: Ulips or mutual funds, it does not matter whose control they come under as long as the investor knows what he is getting and why.
Harsh: Many funds are investing in initial public offers (IPOs). The preferred sectors?
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Ramanathan: We look at IPOs on an individual basis rather than any particular segment or sector.
Edberg: If valuations are stretched, should we book profits, at least partially?
Ramanathan: I would say that some profits should be booked at close to 18,000.
Sana: Has MF (mutual fund) distribution suffered because of the Ulip commission system?
Ramanathan: MF distribution channels have some overlap with those of Ulips. So, there has been some impact.
Sara: I have opted for a dividend reinvestment plan in an equity-linked savings scheme. Every time a dividend is announced, it gets reinvested for three more years. How do I come out of the cycle?
Ramanathan: You can switch to a dividend scheme and receive dividends.
Sana: Should saving tax be part of financial planning?
Ramanathan: Definitely, it’s buying equities 20% cheaper.
Sana: Experts say the global downturn is not over. For India, is there a risk of getting hit once again in the future?
Ramanathan: Yes there is a risk of another leg down as inflation and higher interest rates could bite.