The Hindu Business Line : Still heavy on software

DSPML Opportunities is a tactical fund that seeks to deliver returns by identifying sectors and stocks in their early stages of rally and investing accordingly. We take a look at the sector and stock changes the fund made over the three months ended March 2007.

Over the quarter, the fund maintained its heavyweight position in the software and capital goods space. The uncertainty on cement post-Budget appears to have dented the fund's confidence in the sector as it reduced its exposures to it. Banking, media and entertainment, instead, moved up the ladder in terms of sector holdings.

While there was only a marginal increase in the allocation to the IT space, the segment saw some shuffling. Tech Mahindra, HCL Technologies, Satyam Computer Services and Tata Consultancy Services were added while Mastek and i-flex solutions were pruned. Financial Technologies was the only stock to be added afresh in this space, though it accounted for less than 1 per cent of the total assets.

The changes in the excise duty structure for cement in the recent Budget and the government's demand that cement manufacturers hold the price line for a year, led to a number of funds reducing their holding in this sector. The fund exited ACC and Birla Corporation and cut exposure to Gujarat Ambuja Cements and Century Textiles & Industries. With this, the segment accounted for just 4 per cent of the assets from close to 10 per cent three months ago.

Media and Entertainment has caught the fancy of a number of fund houses. While theme funds riding on consumer spending have significantly propped up their exposure to this space, diversified funds are also not far behind. DSPML Opportunities held 8 per cent of its assets in the sector as of March 2007. NDTV was added to this basket while Sun TV was sold. Zee Telefilms and the other stocks from the Zee group, listed post-restructuring, continued to find a place in the portfolio.

Bannari Amman Sugar, the only stock to represent the sugar sector, saw an over 60 per cent reduction in the number of shares held by the fund. Regulation-driven issues had dented investor confidence in the sector.

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