Where do chief executives and fund managers put their money and what are their views on the year ahead for investors?
Some believe that it's the perfect time to buy stocks but several others say the market is still too volatile and are staying clear for the time being.
Most, however, would like to buy real estate even though this has ceased to be a sure-fire investment in recent years.
A small cross-section of corporate chieftains were asked where they would invest Rs 50 lakh (Rs 5 million) in today's circumstances. Excerpts:
Suhel Seth, CEO, Equus
Given the current volatility, which will certainly last right till the next Union Budget, I would not look at the stock market at all. Instead I would look at mutual funds, especially those offered by Alliance Capital, which are in the form of attractive offers in terms of product combinations.
If at all, I would perhaps invest a small portion (about 10 per cent) in some key oil public sector undertakings but then that's about it.
I would look at some minor investments in the real-estate market but then too in a very limited manner. I think the real-estate market will go down further as we come closer to the Budget.
I would invest about 80 per cent in mutual funds. I would look at Alliance Capital and Kotak as potetial funds.
I would not touch PPF, NSC, RBI Bonds etc. But I will certainly look at insurance: there are attractive offers now from the private players wtih both a protection and an investment focus.
I am a lover of art. There is no bad time to buy great art. You just have to be careful who you buy it from!
D K Jain, chairman, Luxor Group
I would invest 25 per cent in the stock market as it appears that the market is going to gain because of the new finance minister and the changes made in the Budget. Moreover, I feel:
- The economy is reviving.
- India has foreign exchange reserves of $68 billion as on date and would be tapping more in the near future.
- We are moving towards full convertibility.
- FDI players are looking at the Indian market.
- IT has a good future.
I would invest in IT, pharma and banking sectors.
I would invest 25 per cent in real estate in metro cities.
I am reluctant to invest in mutual funds.
I will invest 25 per cent in RBI Bonds or in PPF.
Being an art lover, I will invest 10 per cent in art and 15 per cent in diamond jewellery. The investment of 15 per cent in diamond jewellry is towards security reason of an individual family. This could be a combination of more gold and diamond jewellry.
Gul Tekchandani, chief investment officer, Sun F&C
I would divide the money in the ratio of 60:40, 60 equity and 40 debt.
I would either invest in mutual funds or directly depending on the index. I don't think real estate is really going anywhere, and anyway the money you are allotting is too little for real estate purchases. I don't think real estate is an option unless it is for use.
I would invest in the topline companies with a leaning towards automobiles, cement, steel and technology companies. I would decide the percentage of each sector on the basis of the market indices at that point in time.
I think it is a good time to look at non-conventional investment tools like art. I think buying well-known names is as good as buying equity of a topline company.
I would devote about 5 per cent of the money to art and also buy some amount of gold as well, both of which I would snip out of the debt part.
Ranjan Kapoor, MD, O&M
I think the money that you are alloting is too little. Simply because today there is not one single instrument that offers decent returns.
So I would invest the entire amount in property and in fact I am going to do that. On January 3, 2003 I'm buying some property in Mumbai. I think the return on investment on property is the best currently because it varies between 7 per cent to 9 per cent depending on location and size of the property.
I think I would study various markets before deciding on my purchase, but I think by far, even though people say Mumbai property prices are over-cooked, that Mumbai offers the best returns even in terms of rentals.
I would essentially look at purchasing property that can be rented out and can give me more than adequate returns on my investment.
I would say that any time is a good time to buy art, but one is never sure what the return on investment will be like. Art is a long-term capital gain, not on a regular return basis. I'm constantly buying art, but it's not really for investment purposes.
I would not bother to invest any money in any other instrument be it small savings schemes or government bonds etc.
Sanjay Narang, Mars Restaurants
I will not put any money in the stock market.
If I were to look at instruments like company fixed deposits, it would probably be in the IT sector.
I would purchase real estate in the metros. I would probably spend 25 per cent of the Rs 50 lakh in doing so. I would also seriously look at spending about 10 per cent of the Rs 50 lakh in purchasing real estate elsewhere in the country.
I would put about 15 per cent of the money in mutual funds.
I wouldn't look at investing in PPF, NSC, RBI Bonds etc.
It is probably a good time to buy art, but I wouldn't invest in art.
Siddhartha Lal, chief executive, Eicher
With Rs 50 lakh, I would definitely buy a useable property on the outskirts of a metro as it has the potential to appreciate in value and it can also be put to use in the mean time.
A perfect example in my context is a well-located beach property on the East Coast Road joining Chennai and Mahabalipuram which should appreciate over time but will be put to great use in the mean time.
Venugopal Dhoot, Videocon
I'll invest 20 per cent in the stock market, chiefly in IT stocks. Another 20 per cent I'll put in the mutual funds. I will also buy property in the metro cities for 20 per cent of the allotted amount and the remaining 40 per cent I shall put in PPF, NSC, RBI Bonds and other tax-saving instruments.
C Srini Raju, chairman, iLabs
I'll invest about 50 per cent in Tier one IT companies. These are expected to do well next year in IT and BPO. I do not have knowledge of the FMCG sector. But IT will continue to do well.
It is a good time to invest in real estate as prices are low. The rent should at least pay for 70 per cent of the loan taken to purchase the property.
I do not think mutual funds will provide more returns than individual blue chip companies.
As far as art and other non-conventional investments are concerned, you have to be knowledgeable about this trade. Do not invest because some one advised.
