Sanjay Mookim, India equity strategist at Bank of America Merrill Lynch, tells Puneet Wadhwa that this is not a time for investors to dabble in relatively small and illiquid stocks.
'Through the course of the year, we expect the economic weakness generated by demonetisation will give way to normalisation of growth conditions.'
Demonetisation impact, earnings growth, central bank policies will get attention.
Among these, Hindalco and Vedanta from the metal pack have become multi-baggers, gaining 100 per cent in 2016
'Investors hate uncertainty and the demonetisation move certainly creates that.'
Demonetisation, Donald Trump's surprise victory in the US presidential elections, and the fear that US Fed may hike rates in the upcoming policy review in December have dented market sentiments, report Puneet Wadhwa & Deepak Korgaonkar.
'We think FY18 will end with a 10 to 12 per cent earnings growth, but FY19 will see a recovery to over 15 per cent.'
Macro and micro environment are becoming more challenging.
It was a roller-coaster week for the markets, amid talk of a fiscal stimulus by the government. Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital tell Puneet Wadhwa the recent flows into equity mutual funds are largely speculative in nature and pose a risk of reversal.
'The Budget targets are achievable, but they require continued discipline and that the government sticks with the efforts to cut red tape and make business in India more efficient.'
'We believe 2017 could see higher flows from foreign institutions as money comes back to growth markets like India.'
'Markets are likely to remain choppy for the next 6 months.'
'Going ahead, I think the world trade will slow down or decline, and this will be bad for everybody.'
A'Market valuation is another concern.'
'India is trading at steep valuations and there have been a number of IPOs, especially in the insurance sector, that have had an impact on secondary market liquidity.'
For rest of the year, the issue is largely going to be the balance between growth rates and macro stability versus interest rates, says Sankaran Naren.
Jigar Shah, chief executive officer, Maybank Kim Eng Securities is not certain that the DMart listing would trigger a re-rating of the Indian retailing sector.
With the frontline Indian benchmark indices trading near all-time highs ahead of the general elections that begin later this week, Marc Faber, Editor and Publisher of "The Gloom, Boom & Doom Report" tells Puneet Wadhwa that the Indian stock market is relatively expensive, especially the index (large-cap) stocks.
However, volatility is likely to be on the rise, said Benjamin Yeo, MD & CIO (Asia & Middle-East) for Wealth & Investment Management, Barclays.
Jim Rogers' decision not to invest now is not India-specific, but has to do with the problems relating to how the major global economies are shaping up.
'The challenge in India will be reviving consumption/investment.' 'If the negative surprise in earnings is very sharp or lasts longer than March, it can trigger a sharp sell-off.'
After enduring volatility for the first two months of calendar year 2016 (CY16), global equity markets have recouped some of the losses in March. Jigar Shah, chief executive officer, Maybank Kim Eng Securities, believes the next triggers for the rally will come from a soft landing in China and no recession situation in the US.
India remains an attractive destination and the recent sell-off has made valuations attractive in the large-cap space.
Any correction in Indian equities is an opportunity for investors to put in money for the long term
Motilal Oswal of Motilal Oswal Financial Services tells Puneet Wadhwa why he thinks the current market levels will sustain.
Indian market probably has more headroom than the US, says Geoff Lewis, senior strategist for Asia, Manulife Asset Management.
"While the risk of a correction goes up in the near term, on a long-term basis the Indian market is on an absolutely strong footing."
'Trust a fund manager, buy some small-cap funds and stay invested.'
'The economy needs to deliver the expected 7.5% growth for the markets to deliver better than single digit returns.' 'Any disappointment in growth can see the markets correcting downwards.'
'I think the markets will move up given that there will be more money.'
'The market movement will be largely driven by earnings growth.'
'Equity investing should be for longer than a year's perspective.'
As regards India, market valuations already reflect most positives.
RBI is expected to slash rates by 150 basis points till end-December 2016.
In UK, France and Germany, the president and CEO of Edelweiss Securities, anticipates votes incrementally in favour of local protection and de-globalisation.
Dhawal Dalal, executive vice-president & head, fixed income, DSP BlackRock Investment Managers, expects the central bank to hold rates for the rest of calendar year 2016.
Mark Mobius, co-founder, Mobius Capital Partners, tells Puneet Wadhwa that investors should concentrate more on "value" rather than momentum, and on good small- and medium-sized companies rather than large-caps.
'We are in the middle of an unprecedented SIP revolution.' 'Monthly inflow through SIPs will be Rs 15,000 crore to Rs 20,000 crore soon.' 'Traditional avenues of Indian savings like bank fixed deposits, gold or real estate are no longer attractive to invest.'
Non-resident Indians (NRIs) are very positive about India
'...and defensive until the global macro headwinds turn more benign.'
Investors still seem to have a disinflation bias to their thinking.
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