As markets get into unchartered territory, here is a wrap on what experts believe is the way forward.
This week, the markets were in a frenzy as the Nifty benchmark index crossed the 20,000 mark on September 11 after almost 52 sessions. This was followed by a somewhat predictable series of corrections in the mid and small cap space in the subsequent days.
Through the week, a wide range of market experts joined us to talk about opportunities, concerns and the next big steps for Indian investors and why they continue to be “Bullish on India” but also why they believe it is time to exercise some caution. Missed these interactions? We have you covered.
Here are all the highlights and insights:
Prashant Khemka on the selloff in mid-caps
Notwithstanding the fact that the fundamentals are looking very promising, WhiteOak’s Prashant Khemka believes that the fund flow-driven push to the stock prices, especially in small and mid-caps cannot sustain. Whenever markets go up like this (crossing an all-time high). It’s not necessary that one fine day they’ll then revert back and come down. But to begin with, it starts with some volatility, he said. September 12 was the first day after five months that they saw some volatility. Khemka believes that you can expect more such instances in the coming days.
Vijay Kedia on his fear for new investors
Talking about the sudden interest in mid and small caps, Kedia Securities’ Vijay Kedia said the he was worried for new investors, getting tempted by the “Bhangaar cap” or penny stocks.
He also cautions investors to overall be cautious and not get carried away in the euphoria of the Nifty crossing 20,000. “Tezi main hain sabhi genius, sabhi samajhte khud ko hero, mandhi ki aandhi main, bante aur bighadte firse zero. Banane aur bighadne main hi, nayi zindagi shuru hui hai, fir bhi apne hosh na khona, chahe party shuru hui hai” (the long-term party for new India has begun, however, investors need to always be cautious of the hiccups that may arise).
Read more on what he said here: Nifty at 20k: A part of a long journey and not a destination, says Vijay Kedia
Sunil Singhania on why he is positive about FII inflows into India
Abakkus Asset Manager’s Sunil Singhania, said that he believes there is great potential for India with a renewed focus on growth. Singhania also believes that a shift will be seen with long-term foreign inflow into the Indian markets, regardless of any near term gaps. “We can’t estimate based on ‘on and off’ increase in FIIs flows. In the next two to three years, FII flows into India will be very high,” he said.
Sandeep Tandon on why value stocks will continue to shine
Quant Mutual Fund’s Sandeep Tandon believes that value stocks will deliver better returns compared to growth stocks in this decade. “I think this decade belongs to value as a thesis. within India, value stocks will deliver better returns and this is what we have been saying right from 2019,” he said.
This he said was not only true for India but also globally. In September 2021, when money flow towards global equities was at a lifetime high, the euphoria was only in growth and new age tech stocks, Tandon said.
Read more on what he said here: Sector rotation only way to generate extra alpha during market frenzy: Sandeep Tandon
Nilesh Shah on why he is Bullish in the long run and cautious in the short term
On the whole, Envision Capital’s Nilesh Shah says that India is on a great confluence of amazing macros and micros put together in a perfect blend to benefit equity investors for the long term. What makes him bullish on India in the long term is its relative strength compared to global macro-economic environment. Another big plus is India’s “roaring success” at the G20 summit. But in the short term, the market expert advices caution due to factors such as crude oil prices which will continue to be a metric to carefully watch.
Read more on what he said here: Nifty at 20k: Milestone reflects rising India but must watch out for surging oil prices, says Nilesh Shah
Mark Matthews on why local funds are a powerful force in India
Julius Baer’s Mark Matthews says that he is overweight on India and the markets will continue to go up. But the source of this growth he says will be local funds, despite the presence of foreign funds. “When you get the local funds to a certain size, it becomes a very big cushion for the market and the systematic investment plans that have been rising over the last few years and the number of accounts that have been opened, that will continue as the per capita income of India rises.” Contributing factors here include the working-age population getting bigger and sectors like technology which pay more. “So local buying is a very powerful force,” he says. In order to understand this, Matthews gives the example of countries like Australia and Malaysia where people start putting in money in the equity market every month as a part of their “big retirement plans”.
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