1) Your initial reaction to what has come out wherein from what sources say that the telecom companies will be charged for spectrum, the one time fee beyond 4.4 MHz and on a prospective basis you think net-net positive for the telecos?
In terms of the retrospective expectations, analysts were not building that. As far as the telecom stocks are concerned, pricing power is an issue because the competition has increased and the capex and opex in the industry is likely to go up. So, I would have an underweight call on this sector.
2) But this move which is likely soften and what was believe to be earlier that is you do not think that is a slight more positive than what was expected and therefore there could be an intermediate rally if at all?
Being a long term investor, we tend to take a call on a strategic basis and we do not look at these tactical changes that could occur because of the regulations or the announcements as such.
3) Coming to your broad view on the market, what is the sense right now, we are seeing a bit of correction after two very strong months of rally. Do you think the market could perhaps be going on to testing all time high levels or even closing above 6000 over the next few months?
It all depends on the reform space that we are going to see. We have seen recently that the reforms have been announced and the key is that how it is going to be passed by the parliament. So while this was required and the overall investment environment had to be improved, the steps are being taken and that is why it could sustain if we continue doing that. At the current levels, the market might consolidate because market would like to get those signals as far as the parliamentary clearances are concerned.
4) But are you structurally more bullish on the market then where we started off the year or do you think that this rally has been a bit more speculative?
I do not think the rally is speculative as such, because if you have a three years plus horizon definitely we stand out, relatively over the other nations which are competing for funds as far as the growth rates are concerned and the monetary policy power that we have. So I am optimistic about the markets over that horizon and the initial euphemism around the reforms and the road blocks which were thought of as far as the investment environment was concerned, are being addressed. I would say that the lower valuations, attracted funds which was always expected whenever we discuss these things on earlier occasions and that initial flow of funds has happened.
5) In your disclosed portfolio over the last two months when the markets saw a rally what were your weightages across sectors and have they changed, where have you gone overweight or underweight respectively?
The weightages have not changed much because I was running an overweight position on interest rate sensitive sectors like banks and autos, so that remains the same. The valuations were appearing little rich in consumer space, so I continue to stay a neutral on that. On the investment side, I am having overweight position on cement which continues again. The reforms announcement has not really altered my portfolio so far.