Head of the Advisory Desk at BNP Paribas, K Ramachandran is bullish on the Indian markets from 12-18 months perspective, but believes there is no money to be made in the short-term.

Giving his views on midcaps, he says, "I think good quality midcaps do offer a very good investment proposition. But I do not think it is going to happen in the very short-term or even in the medium-term. I think it’s a long-term structural story.”

Going forward, he believes the biggest trigger will be global market cues because the earnings season will be out of the way. 

Excerpts from CNBC-TV18’s interview with K Ramachandran:

Q: Are you happy with the results that you have seen so far?

A: Even the results declared today have generally been in line with the trend so far seen for the second quarter results. But now the feeling is that the kind of rise we are seeing in the market is more a function of new FII investors having entered the fray rather than just a case of better than expected earnings being factored into the prices.

I think a number of new FII investors have come and it is their buying action in a few heavyweights that is making the markets to see such dramatic rise.

Q: But the FII figures have not been spectacular and we are not getting money at the rate of a couple of USD 100 million a day.

A: That’s fine, but I think to begin with, when the market started recovering in July, there was a lot of skepticism among the FIIs. They were not really willing to believe that Indian markets had the steam to cross the earlier peaks, but once the Indian markets showed the kind of resilience that we have seen.

I think several FIIs came around, that is the new FIIs because several of the older ones have actually taken a pause and some of the leading ones are actually underweight on India. It is the new band of FII investors. That’s why you are not seeing very big numbers, but even when the global markets are weak you are seeing fairly healthy FII numbers and that is a very positive sign. That’s what is really giving this kind of momentum to the market.

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