BSL MNC Fund invests in securities of multinational companies through a research based investment approach to achieve long term growth of capital with moderate levels of risk.
MNCs have Long-term focused Management e.g. Maggi Noodles was launched by Nestle more than 2 decades back and the brand has become so powerful that the category is known by the same name, and the company has extended the brand name to a range of food products. In the case of Maruti Suzuki, the company has created a Network of Dealers.... impossible for anyone to match in short span and very important for the success for any Auto Company.
MNC’s generally offer latest technology products, or products which are already successful in developed markets or in other words they offer products that are time tested and proven.
MNCs like Levers, Siemens, Bosch, ABB, Alfa Laval & Atlas Copco are trying to increase their stake through buy-back/open offer of shares at a substantially high premium to market price as they understand what returns India as a Country offers to them.
MNC companies are generally efficient users of capital & generally not leveraged, in fact they cash surplus in their books along with property holdings, (e.g. Bayer, which sold its Thane property to Kalpataru) hence markets willing to price them higher.
Due to exposure of scams since late 2010, companies that are perceived to have good corporate governance have also been getting priced favorably.
Multinational companies (MNCs) generally have strong parentage and global experience, backed by professional management.
Such synergies can help translate strengths into superior products & services, in turn commanding a higher market share, making these companies an automatic choice for long-term investment.
MNCs are expected to continue to do well for not only the Quality of Management but also for their strategy to preserve capital, generate good return ratios & buy backs/open offers with the intention to increase control which highlights their long term approach and commitment towards India.
Thus, in falling markets, MNC stocks are being supported by promoter buy-backs due to high conviction in the business, whereas in rising markets, the quality has been rewarded with higher PE multiples.
Snapshot of BSL Portfolio
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