Monday Market

Sailesh Raj Bhan is the deputy chief investment officer (equity investments) at Reliance Mutual Fund. He tells Falaknaaz Syed, in an interview, that after many years, corporate earnings are likely to surpass nominal GDP growth in FY19 and many sectors that had faced challenges in the last three-four years like corporate banks, healthcare have bottomed out from an earnings perspective.

The market looks nervous ahead of the interim Budget account. Where do you see the market in 2019?

The rights of investors must be protected and No investor must see his capital destroyed, or his assets stripped, because of reckless transactions perpetrated by adventurous fund managers, said Nilanjan Dey, director of Wishlist Capital Advis­ors, in an interview with Ritwik Mukherjee. There should be strong governance codes to abide by and complete transparency and disclosure. No one can be reckless with investors’ money, he added. Excerpts:

As with any structural reforms, they tend to be disruptive in the first few years and have an economic and political cost in the short-term but their long-term benefits are enduring and tend to surprise on the upside. The political cost of these reforms that the government executing the reforms has to incur is visible from the outcome of three state elections held recently, said Pankaj Murarka, founder of Renaissance Investment Managers, in an interview with Sangeetha G. Excerpts:

NBFC business models are robust in the long run given the paucity of banking credit for the MSME segment. But the recent high growth phase for NBFCs, driven by relatively cheap funds from banks and mutual funds is behind us after the liquidity crisis post the IL&FS issue, said Shilpa Kumar, managing director and chief executive officer of ICICI Securities, in an interview with Ravi Ranjan Prasad. This will result in lower margins and slower growth for them, she added. Excerpts:

The mid- and small-cap space has become attractive due to correction in their valuation. Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance, in an interview with Falaknaaz Syed advised investors to go for a bottom-up stock picking approach rather than a generic play at this point in time. Excerpts:

What is your view on the new RBI governor Shaktikanta Das?

In the next two years, investors will move beyond NBFCs and banks, and start looking at other financial services stocks like AMCs, insurance companies and wealth businesses. That’s good because it would bring diversity to investments, says Shachindra Nath, executive chairman and managing director, Ugro Capital, in an interview with Ashwin J Punnen. Excerpts:

The equity market has been choppy for the past few months. What’s your take?

The market has witnessed a good foreign fund investment in the recent months as overseas investors have shown interest in Indian indices. The bandwagon was later joined by the RBI, which infused Rs 40,000 crore in the market and is willing to add the same amount again in December. The strengthening rupee has helped the sentiments of FPI investors in debt markets, feels Mayuresh Joshi, fund manager at Angel Broking, in an interview with Sangeetha G. Excerpts:

The mutual fund industry is growing steadily. The current Industry AUM of Rs 23 trillion would grow to Rs100 trillion in next 8-10 years. Broadening this investor base towards SMEs, MSMEs, and a larger segment of retail investors will give more stability to the MF industry and provide comfort to the fund managers in delivering better risk adjusted returns, feels Aloke Kumar Sasm​al, director, Money Matters and co-founder & director, Parento Info-rmative.

Unlike the earlier cycles, this time around the market has gone up over last 5 years while the earnings remained stagnated and thus the returns that we have earned from the equity market in last 5 years have largely been on account of multiple expansion than actual earnings growth, said Saibal Ghosh, CIO at Aegon Life Insurance, in an interview with Falaknaaz Syed. Now we are at a stage when interest rates are going up and rupee has depreciated quite a bit. Therefore, further multiple expansion from the current level can safely be ruled out, he added.

Higher crude prices put pressure on the rupee as our import requirements rise and the weak currency affects the fiscal health. For attracting more foreign funds to capital markets, the fiscal deficit needs to be in control, said Anita Gandhi, whole-time director and head of institutional business at Arihant Capital Markets, in an interview with Ravi Ranjan Prasad. At the same time, more resources need to be made available for development and growth of the economy, Gandhi added. Excerpts: