The correction witnessed by the market yesterday was sort of a wake-up call suggesting that there are risks out there and they could come anytime, is the word coming in from Andrew Holland, CEO, Avendus Capital Alternate Strategies.
However, for the near-term it is best to wait for the weekend and if nothing untoward comes out then, we are likely to continue with the liquidity driven markets for some time. He thinks it would take something really big to shake the market.
One concern for the market could be China – the import and export figures were below expectations, they are tightening the house prices, so there seems to be a slowdown there. If China becomes a demand problem, and if Trump gets enough time to go ahead with his reforms then that could have a bit of growth scare for the markets, says Holland.
Sector specific, the house prefers the private banks over public banks, says Holland, adding that even when the economy does well, it will be the private banks that will take the market share. So that is the space one should look to invest in that sector.
Holland says the FMCG space is now one of their new favourites despite valuations because GST is likely to be a big game changer for them. They will see double-digit growth in the topline and improvement in margins. FMCG will get rated significantly.
The house will switch out of IT and pharma, says Holland.
They also continue to like the auto space and would hold on to the stocks they have in their portfolio because the consumption play for that space is likely to continue, says Holland.The house is also focused on housing finance companies associated with affordable housing segment, says Holland.