Bharti AXA Investment Managers Private Ltd was incorporated in Aug ?07 and is headquartered in Mumbai. Bharti AXA Investment Managers Pvt. Ltd is a joint venture between Bharti Ventures Limited, part of Bharti group - one of the foremost business groups in India, AXA Investment Managers (AXA IM) and AXA Asia Pacific Holdings (AXA APH) (through NMIPL).
Mr. Prateek Agrawal, Head of Equity, Bharti AXA Investment Managers started his career as a member of the SBI Capital Markets Research team in 1994, where he eventually rose to head it in a short span of 10 years. Before joining Bharti AXA IM, Prateek was the Head of the equity team in ABN AMRO Asset Management Company.
Speaking with Yash Ved & Meenakshi Patki of India Infoline, Prateek Agrawal says, ?If issues like STT, short term capital gains are addressed in favour of the market, then participation would increase.?
Your expectation from the budget?The immediate concern is job insecurity. Industry should expand and generate jobs. We expect a growth-oriented budget. Also, we expect better things to happen for exporters. There are more demands from Technology and textile industry. The government efforts would be amplified if private sector is encouraged. If issues like STT, short term capital gains are addressed in favour of the market, the participation of the markets would increase. This would enable larger amount of equity fund raising.
How do you read the recent rally in the stock market?In the last two to three months, the stock market has improved significantly. Interest rates have fallen. We have seen large projects in the oil industry. Auto sales and housing sales have gone up and consumption is also on the higher side. US GDP is expected to increase. There is also growth in IIP numbers. Given the fact that the economy is expected to grow; we believe it makes sense to remain fully invested.
What is your take on inflation?Inflation is not a worry at present and is unlikely to be an issue before the first quarter of next year. A lot of commodity prices along with crude price are moving up in a rapid manner. Global economy may see lower growth in CY09 vs CY08 and only return to slightly higher rate of growth in CY10. Given this fact, to expect commodities prices to really move up and stay higher is unjustified. Secondly, we have seen, companies cut workforce in developed countries; people react to wage inflation, because that?s the biggest part of real inflation. We expect wage inflation to return in developed countries very soon and hence we don?t believe in a policy that would cut growth.What is your present AUM?We have Asset Under Management of Rs600-700mn in equity.
What is the outlook for the mutual fund industry?We are reasonably positive as far as mutual fund industry is concerned. India is a country where in the middle class is rapidly expanding and we have seen a large increase in savings rate in the country. A part of that has to go into equity market through the mutual fund route. Mutual funds are one of the best vehicles to invest in equity market in terms of the cost of investing and products. The outlook for Mutual Fund industry in India is pretty good compared to developed countries in terms of market share of the mutual fund industry Vs the total market cap of the country Vs the total savings in the country. The possibilities of overall growth are very large over a multi-year span.
Any new funds in the pipeline? Tell us about your branch expansion? We will be launching few funds in both debt and equity. At present we have 33 branches and we are planning to expand it to 55 branches this fiscal.
Your views on rupee?Our view on the rupee is that the degree of volatility should reduce. Given the scarcity of liquidity on a global basis, RBI has undertaken a slew of measures. We don?t think the rupee could strengthen beyond the 46 levels against the dollar.
What are some of the comforting factors for an investor in the current market scenario?There are few things which may provide some amount of comfort to investors. Firstly, the valuations are probably not very expensive. We expect the street to revise EPS numbers for the indices. Once commodity prices move up, further improvement may be seen in the EPS numbers. Sectors where companies are able to raise fresh capital will see further growth. Our sense is that the Sensex would achieve EPS for FY10 somewhere in the range of 900-950.
To what extent do you see interest rates being cut in the near term? We are more focused on what happens to the lending rates to corporate. We expect it to come down by ?% to 1% over the next quarter.