Friday, November 9, 2018

Nischal Maheshwari on why he has turned a buyer in this mkt - economic news of india - world economic news - economics news for students - indian economy news

Nischal Maheshwari on why he has turned a buyer in this mkt
One can turn a buyer in this market as lower oil price and easing of the liquidity situation has led to an improved situation, 66543584 66544889 66544497 Nischal Maheshwari, Head of Institutional Equities, Edelweiss Securities, tells ET Now.Edited excerpts: Are you a buyer in this market or is this is just a temporary uptick? I am a buyer in this market. Not only low crude prices, there are several things which have changed not only locally but even globally. The second thing after crude is the fact that the dollar trade has reversed and we are seeing a weaker dollar given that Democrats have won the House of Representatives. Tax cuts and stimulus to the economy will be a bit lower and we are going to see fewer rate hikes. These are going to put a bit of pressure on the dollar and that will be positive for the emerging markets. Globally, it seems to be a bit of an ease-off as far as emerging markets are concerned. Locally, crude is very important factor and that is reversed. Second, the liquidity crisis seems to be easing off. All these things are leading to an improved situation and the markets are down 10% to 12%. It is a good time to start accumulating stocks. On the overall global macro front, Moody’s has forecast a fall in India’s GDP to about 7.3%. What is the sense you are getting on the back of this kind of commentary? As far as rating agencies are concerned, I do not think they have a very great history and that is already pretty well known. Things are easing off now. Whether it is oil or dollar, rupee is not under the same pressure and nor is domestic liquidity. The growth in the US is not going to be so strong and the Fed is not going ahead increasing their rates. The easing across the world is going to start happening. These are some of the things which will support the Indian economy. I believe the Indian economy is in a good spot at the moment.From adopting a fairly cautious stance, the FIIs went all out and took a concrete decision before hitting the sell button. Are we likely to see a change in stance from the FIIs? FIIs would be cautious. It is not only domestic liquidity they would be looking at but also at the elections and especially the general elections in 2019. They would want to wait for that to happen before investing a much larger capital. They would watch out for a few dates. One is in November and the next one is in May. I do not believe that FII money is going to be pouring back. There are much cheaper emerging markets across the world like Brazil and China and they would want to focus there as these markets are much cheaper. India has got some time before FIIs come back strongly.How are you reading into the kind of earnings that we have seen so far? Any bright spots or misses? One of the bright spots was the corporate banks. Whether ICICI, Axis or SBI -- these are all largecaps and the market has waited quite a long bit for them to turn around. This quarter was one of the bright spots. The game has definitely shifted away from the retail oriented banks to the corporate banks. Metals continue to show good performance -- be it JSW or Hindalco. Metals continue to be in a good spot. IT was a bit of a mixed bag. There were some bright spots. Most of the management continues to talk about a good outlook but the numbers in some of the midcaps were disappointing and given that the valuations of midcap had run away, a good amount of selling happened as far as IT is concerned. These are some of the bright spots which I see in this consumers’ mixed bag. Corporate banks really stand out this time.
Source: ET