npavan78
06-11-2008, 10:04 AM
Life Insurance Corporation (LIC), which has already invested Rs 22,000 crore out of the Rs 40,000 crore earmarked for this fiscal, into the markets, is not worried about volatility. LIC Managing Director Thomas Mathew, who spoke to UTVi, says the market still offers a very good long-term opportunity. LIC, he says, is especially bullish on the power, telecom, cement and banking sectors.
It’s been difficult days in the market. What have been you doing and how much money have you put in the last month or so?
Mathew: In the long term, it’s a great opportunity. I must say there are lots of positive factors in the market today. Though the market is not very good now, from a long-term perspective, it is going to be good and we are utilising the opportunity to make some good buys.
What is the quantum of funds you have deployed in the market?
Mathew: For this fiscal, from April till now, we have put about Rs 22,000 crore in the equity market.
How much of that have come in the last one month. Do you have a rough sense, sir?
Mathew: Whether the market is up or down, we follow a very systematic investment policy. We are a long-term player. We do not trade or speculate in the market. We are aware that the funds of our policy holders have to be kept safe and we have to give back good returns in the long term. Therefore, if the market is up or down, we keep on investing in good top Nifty stocks, which has a very good value in the market.
Are incremental investment or inquiries for investments actually going down? Or do you think sentiments among clients are very positive at this point of time? Can you just give a sense of how things are, as you see them?
Mathew: The sentiments of our customers are very positive. If you have watched the rise and fall of new insurance premium of equity-link products, the performance of the of LIC’s unit-linked products have been much better than other funds. LIC policy holders are very much positive, because LIC basically means trust. At a time when many things are happening in the international markets and even in India, in the private sector, people’s confidence and trust in public sector institutions like LIC, I must say, is increasing. It’s a very positive feature for us. I must also say that, in the last few weeks, our business has picked up. During the current year also, I foresee a very good performance for LIC’s new businesses.
Are you feeling the heat of redemption pressures?
Mathew: As I told you, LIC investments are guided by the systematic policy guidelines of our regulator -- the Insurance Regulatory and Development Authority (IRDA). We follow that while making our investments. Of course, our investment is huge and that is more in the debt market. In the equity markets, as I told you, in the current year, we have already put about Rs 22,000 crore. For this fiscal, up to March, we are trying to put about Rs 40,000 crore altogether. So we are always looking for the long term and plan to invest in the top Nifty stocks. As on today, the market offers a good opportunity for making good purchases for a long-term portfolio build-up.
Are you saying that you are deploying another Rs 18,000 crore between now and March next year, or an additional Rs 40,000 crore between now and March next year?
Mathew: For this fiscal, we have already put in Rs 22,000 crore out of Rs 40,000 crore. For the rest up to March, the tentative plan is for about Rs 18,000 crore for equity market investment.
Are you finding values sectorally at this point?
Mathew: Yes, in certain sectors it is attractive. For example, I must say that, in India, the economic development story is very good. Whatever is happening on the international front, our infrastructure growth will be there. Power, steel and cement are all good buys. In the banking sector, though there have been some problems, with excellent policy measures taken by the government, that sector will also look up. So, it’s also a good buy. Oil prices have come down and that is going to be a great relief for the country and for the economy. Hence, the oil sector is also a good buy for the long term. I must say that fast moving consumer goods (FMCG), oil, banking, power and telecom will all be good for long- term investment.
At a time when people are negative about commodities as a whole, what makes you so optimistic that valuations have emerged from the longer term horizon?
Mathew: LIC’s investment policy is based on a long-term perspective. We look at the fundamentals of the company and the stocks. At LIC, we have a very professional team for equity research and they advise the top management on the fundamentals and technicals of companies and stocks. So, we find that, in the long term, these sectors are likely to do well.
Your business premium is declining at this point of time. We keep on reading reports about that. Would you give us a ground check on whether that is a reality or not?
Mathew: I don’t think that is a reality. If you have seen the figures from April onwards, you will find the market share of the corporation has been going up. It has crossed about 55% at the end of September, but the major portion of LIC's businesses traditionally come from the later half of the year, and we are very confident that, as the months go by, the business will still be picking up. For the current year, we will be registering a very good market share.
It’s been difficult days in the market. What have been you doing and how much money have you put in the last month or so?
Mathew: In the long term, it’s a great opportunity. I must say there are lots of positive factors in the market today. Though the market is not very good now, from a long-term perspective, it is going to be good and we are utilising the opportunity to make some good buys.
What is the quantum of funds you have deployed in the market?
Mathew: For this fiscal, from April till now, we have put about Rs 22,000 crore in the equity market.
How much of that have come in the last one month. Do you have a rough sense, sir?
Mathew: Whether the market is up or down, we follow a very systematic investment policy. We are a long-term player. We do not trade or speculate in the market. We are aware that the funds of our policy holders have to be kept safe and we have to give back good returns in the long term. Therefore, if the market is up or down, we keep on investing in good top Nifty stocks, which has a very good value in the market.
Are incremental investment or inquiries for investments actually going down? Or do you think sentiments among clients are very positive at this point of time? Can you just give a sense of how things are, as you see them?
Mathew: The sentiments of our customers are very positive. If you have watched the rise and fall of new insurance premium of equity-link products, the performance of the of LIC’s unit-linked products have been much better than other funds. LIC policy holders are very much positive, because LIC basically means trust. At a time when many things are happening in the international markets and even in India, in the private sector, people’s confidence and trust in public sector institutions like LIC, I must say, is increasing. It’s a very positive feature for us. I must also say that, in the last few weeks, our business has picked up. During the current year also, I foresee a very good performance for LIC’s new businesses.
Are you feeling the heat of redemption pressures?
Mathew: As I told you, LIC investments are guided by the systematic policy guidelines of our regulator -- the Insurance Regulatory and Development Authority (IRDA). We follow that while making our investments. Of course, our investment is huge and that is more in the debt market. In the equity markets, as I told you, in the current year, we have already put about Rs 22,000 crore. For this fiscal, up to March, we are trying to put about Rs 40,000 crore altogether. So we are always looking for the long term and plan to invest in the top Nifty stocks. As on today, the market offers a good opportunity for making good purchases for a long-term portfolio build-up.
Are you saying that you are deploying another Rs 18,000 crore between now and March next year, or an additional Rs 40,000 crore between now and March next year?
Mathew: For this fiscal, we have already put in Rs 22,000 crore out of Rs 40,000 crore. For the rest up to March, the tentative plan is for about Rs 18,000 crore for equity market investment.
Are you finding values sectorally at this point?
Mathew: Yes, in certain sectors it is attractive. For example, I must say that, in India, the economic development story is very good. Whatever is happening on the international front, our infrastructure growth will be there. Power, steel and cement are all good buys. In the banking sector, though there have been some problems, with excellent policy measures taken by the government, that sector will also look up. So, it’s also a good buy. Oil prices have come down and that is going to be a great relief for the country and for the economy. Hence, the oil sector is also a good buy for the long term. I must say that fast moving consumer goods (FMCG), oil, banking, power and telecom will all be good for long- term investment.
At a time when people are negative about commodities as a whole, what makes you so optimistic that valuations have emerged from the longer term horizon?
Mathew: LIC’s investment policy is based on a long-term perspective. We look at the fundamentals of the company and the stocks. At LIC, we have a very professional team for equity research and they advise the top management on the fundamentals and technicals of companies and stocks. So, we find that, in the long term, these sectors are likely to do well.
Your business premium is declining at this point of time. We keep on reading reports about that. Would you give us a ground check on whether that is a reality or not?
Mathew: I don’t think that is a reality. If you have seen the figures from April onwards, you will find the market share of the corporation has been going up. It has crossed about 55% at the end of September, but the major portion of LIC's businesses traditionally come from the later half of the year, and we are very confident that, as the months go by, the business will still be picking up. For the current year, we will be registering a very good market share.