MUMBAI, FEB 28: The improvement in the economy and the stock market boom have boosted the bottom lines of the Unit Trust of India in the six-month period ended December 1999. The aggregate investible funds of the largest mutual fund in the country has increased to Rs 72,698 crore, registing a smart rise of 51 per cent over Rs 48,092 crore as on December 1998. With share prices going up, the reserves and surplus of the UTI have amounted to Rs 8,716 crore from Rs 661 crore negative reserves in December 1998.UTI chairman P S Subramanyam has attributed the UTI's turnaround to the improved economy and remarkable performance by the stock market. The reserves and surplus position has been progressively on the rise since December 1998, when it stood at a negative of Rs 661 crore and in June 1999 had turned around to a positive figure of Rs 1,492 crore. Thus the increase in reserve and suplus is to the extent of Rs 9,377 crore in December last over December 1998. ``This reserves and surplus position is after income distribution of Rs 4,120 crore made during the January-June 1999 and Rs 785 crore during July-December 1999. Unit capital under all schems increased by 15 per cent to Rs 55,619 crore from Rs 48,404 crore during the same period,'' the UTI chairman said.UTI, it may be recalled, faced a crisis of confidence in 1998 after the reserves of its US-64 scheme turned negative following a slump in the stocks in reaction to the country's nuclear tests. ``But a subsequent bounce-back of the markets and a restructuring of the scheme helped UTI erase its losses,'' Subramanyamsaid."Since 1998, alongside continuous improvement in the capital market, a series of measures were undertaken by UTI to restructure the portfolio," Subramanyam said about US-64. Due to dynamic fund management, tighter control on expenditure and the favourable capital market, the net income during the half year-ended December 1999 was Rs 6,046 crore compared to Rs 1,778 crore for the correponding period in the previous year, thus registering an increase of 240 per cent.The investible funds of the US-64 have increased by over 60 per cent to Rs 19,923 crore as on December 1999 from Rs 12,433 crore as on December 1998. The reserves and suplus position is at a healthy Rs 3,581 crore from a negative position of Rs 2,597 crore as in December 1998. The net income rose by 198 per cent to Rs 1,189 crore for the half year ended December 1999 compared to Rs 399 crore for the corresponding period of last year.The market value of equity portfolio has gone up by 54 per cent to Rs 15,799 crore as on December 1999 from Rs 10,254 crore as on December 1998. The portfolio has shown appreciation of Rs 3,196 crore against depreciation of Rs 4,914 crore. Besides, the scheme booked profit to the tune of Rs 969 crore during the six months period, he added.UTI has hiked the exposure in equities in its flagship Unit Scheme 1964 (US-64) to the so-called `new economy' sectors while cutting down on cyclicals. US-64's exposure in the information technology (IT) sector has risen to 19.13 per cent as of end-December 1999 compared to 5.68 per cent a year earlier while it has increased to 2.5 per cent in the media sector from zero.The allocation to the pharmaceuticals sector increased to 4.95 per cent from 3.31 per cent during the period but declined to 7.71 per cent from 12.87 percent in the case of fast-moving consumer goods and to 13.15 per cent from 20.30 percent in cyclicals, he said.Higher weightage has been given in the last 12 months to stocks like Infosys Technologies, Global Tele-Systems, Satyam Computer, Zee Telefilms Visualsoft Technologies, SSI Ltd, Ranbaxy Laboratories, Pentamedia Graphics Mastek, Morepen Laboratories, Aurobindo Pharma, Leading Edge Systems Digital Equipment India, Dr Reddy's Laboratories and Novartis India "About the IT sector, we have been very cautious even as weare optimistic," he said.UTI to invest in Indian ADR/GDRsMUMBAI: With the SEBI allowing Indian mutual funds to invest abroad, UTI has decided to invest in ADR/GDRs of Indian companies. UTI is actively considering using derivatives for hedging purposes as and when these are made available to the mutual funds. The dematerialisation of securities has, in a significant way, helped UTI in quicker turnover of the portfolios. Further, UTI will also be introducing a stock lending scheme for brokers and other investors.
