Mkts to fall irrespective of what budget delivers: IL&FS

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

                  

 

Q: Do you track any of the railway stocks - around the railway budget today?

A: Not really. I do not think the railway budget is really important. I think people just give it too much of importance. You may have a little bit of freight rates coming down or going up so it is not really a very material event. If you have a large capital expenditure which the railways come out with in terms of laying down lines and signaling equipment, it could affect a few companies adversely or positively depending on how that capex is.

Q: Between the rush of QIP in real estate and infrastructure what space still interest you?

A: I think infrastructure is one sector which looks better than any of the other sectors. That includes power and road construction because a lot of things could happen in the road construction sector going forward which has not happened for the past 12-18 months. So if I were to prefer any sector it would be definitely stocks related to the infrastructure sector.

Q: Just want to get your thoughts on another niche sector that has been seeing some buying the education stocks?

A: There do you no have really too much of largecap stocks there. Quite a few of them are really smallcap and then tend to be very volatile. I think the market is banking on the fact the government would put in a lot of expenditure into the education sector which I am sure is going to happen. Maybe also have a PPP format for the education sector. So they could be good in the long term but as Sudarshan said there are a lot of stocks actually not only in the education sector but overall which are looking very rich in valuations, which have factored in a lot of positives at this point of time and therefore even in the event of a good budget and meeting all the expectations I do not think you will have a big rise in them apart from maybe a couple of days rise immediately after the budget and if the budget disappoints then you could have an immediate crack down

Q: You would be bearish on commodities as a class given your view on global markets now most commodities stocks?

A: Yes absolutely because I think the way the global economy is panning out, the type of optimism which people have started to develop, really nothing much seems to have happened. We have got some positive numbers from US, UK and not so much from Europe in fact. But it is only that there has been so much of liquidity which has really put everybody into a positive frame of mind but I really do not see any improvement happening in the global economy and I think you could go back into really negative phase going forward. The next 6-8 months and if that happens then I think commodities are definitely going to suffer and you could see commodity prices coming down pretty sharply over the next 6 months till December or so. That would obviously have an adverse impact on commodity stocks.