May 11, 2013, 02.57 PM | Source: CNBC-TV18
Nitin Jain of Edelweiss Securities feels that market is showing great signs of momentum. His bias stays on the long side.
Nitin Jain (more)
CEO- Global Asset & Wealth Management, | Capital Expertise: Equity - Fundamental
Below is the verbatim transcript of his interview to CNBC-TV18
Q: A word on what could be the closing strategy on the Nifty?
A: I think it is very difficult for me to call a closing strategy today. Generally the market is showing great signs of momentum. We have been all taken by a bit of a surprise in terms of the strength that it has shown for the last two or three months.
My bias stays on the long side, but at this point going long index probably does not give me great comfort from a risk reward point of view.
Q: What should one do at this point, we have seen the put call ratio go up to 1.25. What should be the strategy? It is a long series, it goes right up to May 30, how should one play that?
A: Our bias stays on the long side. So, you have to find ways of going long. If you are into index then it might not be a bad thing to just put on some kind of a bear spread, buy 6000 puts, sell 5800 puts to just cover yourself for the correction.
Net-net you have to continuously build long positions. My suggestion would be to look beyond index because there are so many individual stocks which present excellent opportunities from a risk reward point of view. Much-much better than what the index provides today.
Q: Take us through your top three strategies in terms of stock strategies?
A: We have been talking for a long time about two sectors particularly media and retail NBFCs. It seems to me that the market is finally catching up, but I still think these themes are very big. Over the next 3-4 years I think it can be a game changer, digitisation for media particularly.
I have been very bullish on two or three stocks in media, TV18, TV Today and Zee. I think these three stocks can easily compound at 25-35 percent over the next 3-4 years. They are really good risk reward opportunities.
The other as I said retail NBFCs we have been talking about it, Bajaj Finance , Repco , Mahindra Finance , all these are great plays return on equities (ROEs) upwards of 20-22 percent. Trading at reasonable valuations anywhere between 1.75 to 2 times book. I think very interesting picks, if you want to add them to your portfolio.
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Nitin Jain, MD & co-head, fixed income, Nomura Ind