Capex, infrastructure development, and prudent fiscal management are the key focus areas in the Budget, says Nilesh Shah.
'For most investors, I recommend a low double-digit allocation (10 to 12 per cent) to gold and silver combined.'
Chief Investment Officer of Prudential ICICI, Nilesh Shah discusses the current situation of the market in terms of inflows, valuations and the general consensus on the market.
If inflation is robust then interest rates will have to be ra
Finance Minister (FM) Nirmala Sitharaman has presented a forward-looking Budget, reinforcing the government's commitment to 'Reform, Perform, and Transform'.
'For experienced and risk-taking investors, now may be the time to go all in.' 'By 'experienced and risk-taking', I refer to those who remained net buyers in equities during the early stages of the 2020 pandemic.' 'On the other hand, those who exited the markets during the pandemic may go the SIP way.'
The contribution from asset management companies (AMCs) has surpassed the Rs 3,000 crore target for the creation of a Rs 33,000 crore backstop facility for debt mutual funds (MFs). The initial corpus for the Corporate Debt Market Development Fund (CDMDF) is nearly Rs 3,100 crore, according to multiple government officials and AMC executives. "The fund is operational now. "The required corpus has been raised by AMCs and the remaining part (Rs 30,000 crore) is in the form of a guarantee from the government which will be activated only in case of a credit event," explained D P Singh, joint CEO and deputy MD, SBI MF.
The change in debt fund taxation is seen as boosting the demand for hybrid funds. It is no surprise then that asset management companies (AMCs) have launched a raft of new products in the multi-asset category. However, they seem to be divided on the asset mix and approach. The multi-asset space, which provides fund houses ample scope to innovate, has seen five launches in as many months.
Among the Sensex firms, Bajaj Finance emerged as the biggest gainer by climbing 2.95 per cent. Tata Motors, Bajaj Finserv, IndusInd Bank, Sun Pharma, Mahindra & Mahindra, State Bank of India, Larsen & Toubro, HDFC, HDFC Bank, Maruti, Reliance Industries and Bharti Airtel were the other major winners. HCL Technologies, Axis Bank, ICICI Bank, Tech Mahindra and Titan were among the laggards.
The government on Wednesday reconstituted the Economic Advisory Council to the Prime Minister (EAC-PM) under existing chairman Bibek Debroy, for a period of two years. V Anantha Nageswaran has been dropped, Rakesh Mohan (former deputy governor of RBI), Poonam Gupta (director general of NCAER) and TT Ram Mohan (professor, IIM Ahmedabad) have been appointed as part-time members of the reconstituted EAC-PM. The other part-time members of the Council include Sajid Chenoy, Neelkanth Mishra and Nilesh Shah.
The government and the Reserve Bank of India is moving in the right direction to curb the inflationary expectations
Domestic mutual funds (MFs) and foreign portfolio investors (FPIs) have been net buyers of stocks in August. Domestic fund houses have continued to invest in stocks, propelled by the success of various new fund offers (NFOs) and strong flows into equity funds. MFs had purchased stocks worth more than Rs 8,300 crore until August 23, according to the data provided on the Securities and Exchange Board of India (Sebi) website. Jimmy Patel, MD and CEO at Quantum AMC, says: "The surge in equity investments by MFs is because of two key reasons. One, equity NFOs are getting a strong response from investors, and fund houses need to deploy that money in the markets.
Following the 30-day moratorium placed on Yes Bank, asset management companies have asked their clients, who have bank accounts with the troubled lender, to furnish details of alternate accounts for receiving redemption payouts. Redemption is the return of an investor's principal on a fixed income security such as a bond, mutual fund or preferred stock.
T'I am not going to buy small- or mid-cap stocks at very high valuations if it doesn't make sense for the investors.'
'Markets are likely to remain choppy for the next 6 months.'
The Indian economy, by and large, will withstand the current crisis like it withstood the Asian and Western world credit crises.
The government has been pressing citizens to pay taxes and be compliant, but they have very little to show regarding improved efficiencies in the companies they themselves own, the fund managers said.
AMCs can invest $7 billion abroad, and $300 million per AMC, but investments are way below these levels. Most equity schemes can invest 35 per cent of their assets abroad and there are schemes that invest only in overseas equity. What's holding them back is that they are not very sure if they can buy these bonds.
Nilesh Shah aired his views on the sub-prime crises, after effects of the Budget and FIIs. He thinks Brazil is the best bet amongst upcoming markets due to its natural resources.
Even optimists suggest a tempering of expectations and there may still be room for a fall.
The results certainly show it is, but infrastructure and people shortages don't make for an uncontrolled bull run
Industry body Association of Mutual Funds in India on Friday assured investors that a majority of fixed income mutual funds assets are invested in superior credit quality securities and such schemes have appropriate liquidity to ensure normal operations. The statement by the industry body came after Franklin Templeton Mutual Fund voluntarily decided to wind up its six debt schemes citing redemption pressure and lack of liquidity in bond markets due to the coronavirus pandemic.
The main purpose of the meeting is to assess their views on reforms that are required to attract long-term capital into the country.
The Budget has to provide for capex on roads, railways, defence and other infrastructure sectors.
After a long hiatus of more than 20 months, the government had on November 26 announced the resumption of scheduled international commercial flights from December 15.
Alert to the looming threat from the 'Omicron' variant, states began to re-tighten curbs and urgently trace people who arrived from abroad in the last one month while a demand to not allow flights from the affected countries was made by Delhi Chief Minister Arvind Kejriwal and Karnataka Chief Minister Basavaraj Bommai.
'It could tempt investors to pick stocks that are not fundamentally sound.'
When you buy a stock, especially a mid- and small-cap one, have a price target. Once you hit the target, exit the stock, advises Joydeep Ghosh.
Investment experts said the key to generating superior returns was "asset allocation" and taking money out of the table from themes that have performed well and into themes that are available at a discount.
The recent circular follows the 'true-to-label' concept, but large funds in the multi-cap category may be forced to merge in the absence of sufficient small-cap options.
There was broad-based rally with participation across sectors creating enormous wealth for investors but starting 2018, the rally got concentrated into select large-cap companies with under performance in broader markets.
Share prices of Dewan Housing, Indiabulls Housing, and PNB Housing have declined 30-80% in the past one year
'This market is very expensive in some pockets, dirt cheap in some, and the belly of the market is reasonably valued.'
'A probable positive patient walking into a centre is not an ideal situation.'
The Karnataka election is being seen as the semi-final to the 2019 general elections and appears to be heading towards a close fight
Stocks such as ICICI Bank, Axis Bank, State Bank of India, Bank of Baroda and HDFC Bank are among the top banking picks of analysts for 2017. A decline in cost of funds and treasury gains are expected to help stabilise their net interest margins
Stockmarket Gurus Raamdeo Agrawal, Manish Gunwani, S Naren and Nilesh Shah discuss their favourite themes for the New Year.
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