In an interview with ETMarkets.com, he projects interest rates to fall by more than 100 basis points during the year. Excerpts:
Samvat 2071 failed to bring cheer to investors. What are your expectations from 2072? Where do you see Sensex and Nifty by next Diwali?
The recent months have dampened sentiment for equities, but the market will reward patience. The rest of the year and the early part of 2016 would see high volatility on account of slow earnings revival at home, a mismatch between expectations and delivery from the government and global factors like slowing China and the impending US Fed rate hike. But it would also present a golden opportunity to accumulate quality stocks.
The year 2016 has a lot to offer, which could well lay the foundations for a big bull rally. Interest rates would fall by more than 100 basis points in 2016 on account of subdued inflation; corporate earnings recovery will gain momentum, fiscal and current account situation will strengthen and what's more - India's GDP growth rate will surpass China's annual rate of growth! I am also hopeful that in the third year of the ruling government, the reform process will gather steam.
It's extremely difficult to predict the level of the Sensex. But if you are an investor, stop worrying about the market as a whole and think of the wholesome market that chosen quality scrips offer.
What would be your top 5 stock picks for Muhurat trading and the rationale behind them?
We like Capital First, SymphonyBSE -0.95 %, Welspun India, Eicher Motors and Britannia Industries Ltd.
What is your view on gold? Should investors add more gold this Samvat or equities look like a better alternative?
I usually do not recommend Indians to allocate much money to gold products, since our households already stock more than a fair share of gold in the form of jewellery. I think the best time for gold investing is behind us and we will not see a repeat for many years.
However, if you must buy gold, go for the newly-launched Gold Bond scheme of the Government, which offers added return in the form of fixed interest payments.
What, according to you, are the top five sectoral themes that should work well in Samvat 2072?
Our approach at this point would be bottom-up investing. But if I have to name a few sectors and themes, I would say automobiles, consumer plays (not staples), auto ancillaries, ports and defence would be a few of them.
After rallying over 15% in last one year, will midcaps outshine largecaps this Samvat?
There could be a moderate outperformance as far as the midcap index is concerned, but it would be accompanied by high volatility. But, select midcaps with excellent management and business potential will handsomely beat any largecap, like in any market.
If you were to build a portfolio of various asset classes, how much weightage would you give to different asset classes -- equity, fixed income asset, gold, real estate, alternative assets?
For the conservative investor - 40 per cent equity (of which 30 per cent in largecaps), 60 per cent fixed income & others. For moderate risk taker, 65 per cent should be in equity with 40 per cent exposure to largecaps. For aggressive investors, 90 per cent of assets should be equity with 50 per cent of it in largecaps.
Source: The Economic Times