Monday Market

Earnings recovery could be visible from Q3 onwards

The bullishness among domestic investors regarding the India story is fuelling a shift in the manner of savings. People are opting to save via investments in mutual funds rather than the traditional fixed deposits, said Ajay Kejriwal, president of Choice Broking, in an interview with Ravi Ranjan Prasad. It’s this bullishness that has led to the current market rally, he said. Excerpts:

What’s your take on the government’s steps to boost public sector banks and infrastructure?

FIIs to remain interested as India offers highest real rate of return

Although in the short run the market may remain volatile, but in the longer term Indian capital markets are poised for a consistent higher growth in the decade to come. It could mainly be due to stable economic and political scenario coupled with implementation of business-friendly reforms.

RBI may stand pat on rates at Oct 4 policy meeting

Referring to the recent outflows by foreign institutional investors, Ritesh Jain, chief investment officer, BNP Paribas Mutual Fund, tells Falaknaaz Syed that FIIs maybe, reallocating their capital to other emerging markets, which are cheaper than India, but a possible correction in both currency and equity markets could actually lead to inflows later during the year. Excerpts:

How do you read this quarter’s results? Are there any signs of revival?

Lack of earnings pickup may dampen sentiment

With a decreasing allocation to emerging markets seen in global allocations in August, it appears that there may not be much appetite for Indian equities by FIIs in the interim. In an interview with Falaknaaz Syed, Tushar Pradhan, chief investment officer at HSBC Global Asset Ma­n­a­g­e­ment India, said several domestic negatives such as continued softness in corporate earnings, a longer than expected impact of the disruption caused by GST and a political upheaval can damage the prospects of the ruling party’s efforts to get re-elected in the 2019 polls.

GST’s orderly implementation is important

While the macroeconomic fundamentals of economy have improved dramatically over the last three years, the government of the day needs to take utmost care and caution and keep in mind that incremental delays in resolution of NPA problem would delay private capex recovery and also while there are reasons to be positive about the long-term prospects of GST, it’s important that it gets implemented in an orderly manner with less disturbances to the trade, said Harshad Borawake, head of research (equity) at Mirae Asset Global Investments, a leading independent asset managemen

Equity may yield 15-18% annual returns

The sharp stock rally in recent months has come as a surprise to many, but the market now awaits an event, like improved corporate earnings, for the next big move. Though the corporate earnings growth will be positive, the real momentum in earnings will be seen in the third or fourth quarter of FY18. In the meantime the market can go through a little bit of volatility, said

Ravi Gopalkrishan, head equity, Canara Robeco Mutual Fund, in an interview with Ashwin J Punnen. Excerpts:

Present Indian market valuations seem stretched

While the world has become a riskier place to invest in, with few markets including India offering prospects of real growth. As a result, the prospects look good. But as witnessed in the recent quarters, we may still be in the flat growth zone and better trends could emerge in the first quarter of current financial year, even as export-oriented industries like IT and pharma being hit by external factors, said Ashutosh Bishnoi, MD & CEO, Mahindra Mutual Fund, in an interview with D Govardan. Excerpts:

Strong domestic, foreign fund inflow into market likely

Reforms may seem disruptive, but sometimes they’re necessary. It’s too difficult to predict the impact of any reform to the last decimal place, on multiple industries, said Neil Parag Parikh, chairman and CEO, PPFAS Mutual Fund, in an interview with Ravi Ranjan Prasad. Reforms also allow new type of businesses, which can aggregate capacities more efficiently to flourish. Any short-term disruption is perhaps like a speed bump rather than a sinkhole, he remarked. Excerpts:

Investors must take a multi-asset approach to allocation decisions

Given the current situation, investors should be thinking about a multi-asset approach to their allocation decisions, and the inclusion of more uncorrelated risk premia is essential. And that’s where hedge funds and alternative investment funds come into picture. The hedge fund space is at an interesting crossroads. The industry’s asset under management has been hovering around $3 trillion. The value proposition of providing uncorrelated return streams has been under attack at a time when investments in more traditional asset classes have ne­ver been so risky.

Tax sops to tackle demand slowdown likely in budget

2016 has ended on a tumultuous note with developments on the international as well as domestic fronts. A sense of uncertainty is prevailing among consumers, th­a­nks to demonetisation, and investors due to the resultant short-term stagnancy.