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SBI MF senses new growth cycle ahead, picks old economy stocks

SBI MF senses new growth cycle ahead, picks old economy stocks

14 May 2021

NEW DELHI: SBI Mutual Fund’s focus on buying public sector companies continued for another month in April, even as India’s largest fund house booked profit in some of the midcaps that had surged recently.

The buy and sell data for the month showed the fund house is continuing with its policy of banking on re-rating candidates. Old economy stocks topped the list of items in its cart for April.

Data available for the month showed, fund managers at SBI MF bought 1.80 crore shares of

. This came on top of 3.04 crore shares bought in the previous month.

Shares of the utility company have been in the demand recently, as electricity consumption has reached record levels. The stock has gained over 42 per cent in the last one year, and 21 per cent so far this year.

Apart from that, SBI MF also bought 20-75 lakh shares of Bharat Electronics, Bank Of Baroda, Hindalco Industries, City Union Bank, Finolex Industries, ICICI Bank, Vodafone Idea and IDFC First Bank.

“We believe positives outweigh negatives and near-term uncertainties notwithstanding, we may be in the initial stages of a new economic and earnings growth cycle. We, therefore, prefer using this market correction to buy into pro-economy assets and sectors,” SBI Mutual Fund said in its monthly outlook report.

The fund house said aggressive fiscal expansion in addition to super-accommodative monetary policy in the West, most notably the US, should augur well for a reflation in the global economy. “For India, a global reflation may be coming just at the opportune time with both economic growth and corporate profits as a proportion of GDP starting at multi-year lows,” they said in the outlook.

Top stocks that SBI MF money managers sold in March included a mix of government-owned firms and some midcaps that have run up recently. They dumped 48 lakh shares of oil marketer Bharat Petroleum, as uncertainty over its sale continued.

The fund house also sold 10-48 lakh shares of

& Finance Company, JSW Energy, Exide Industries, SAIL, Torrent Power, The Great Eastern Shipping Company, Lupin, NMDC, Zee Entertainment, and Cipla.

Some of the buying and selling could have happened due to changes in the composition of benchmarks that are tracked by passive funds.

SBI Mutual Fund also took fresh positions in

, Cera Sanitaryware, Fortis Healthcare, , Hindustan Copper, L&T Finance Holdings, Mahanagar Gas and Minda Industries. At the same time, it exited Gabriel India and Mayur Uniquoters during the month.

SBI MF remains the top fund house in India with assets under management (AUM) of Rs 5.13 lakh crore, widening the gap against the rest. ICICI Pru AMC grabbed the second spot in April with AUM at Rs 4.25 lakh crore and HDFC AMC slid to third position with Rs 4.09 lakh crore in assets.