 Samavat 2063: What's in store for the markets?Published on Fri, Oct 20, 2006 at 21:17 | Source : Moneycontrol.com Updated at Mon, Oct 23, 2006 at 20:31 12409 Investors following Bajaj Holdings. Share this News with them.
Last Diwali, the Sensex was at 7,944 and today, we are standing at the brink of 13,000. That's a 62% rise on the Index from last Diwali to this Diwali. There was jolt in between, and the markets went down to 8,800 briefly. But the markets reclaimed all the lost ground and came back to strike a new high just a few days before this Diwali. Investor and trader, Rakesh Jhunjhunwala, Member of BSE, Ramesh Damani and Shankar Sharma of First Global share their perspective on what is in store for the markets in the future. Excerpts of CNBC-TV18's exclusive interview with Rakesh Jhunjhunwala, Ramesh Damani and Shankar: Q: Markets are at all time highs, it's New Year, where do we go from here?
Q: Although there will be a feeling that its good to see the Index at a high, generally do you think people might have missed out? Jhunjhunwala: Many people are not confident at all. If you see the exposure of equity in Indian households, it is increasing at a slow pace and that is surely the final indicator of the fact that the belief and faith in this market is still in an infancy stage. So I think there is still lot of more domestic money to come. So just as a rising tide raises all boats, ultimately in a rising market everybody will buy and participate. But surely, there is a lot of 'missed out' feeling. Q: What is your sense when you look back at the last 12 months, what sense do you have of where we could go from here having reached these levels?
If all of them were told that "money is locked up for 5 years, do what you want to do", I think the perspective would be very different but nobody's money is locked in for 5 years, there is daily redemption, daily NAVs, performance benchmark are very stiff. Most people waited themselves in favour of midcaps in the last 12 months. If you look at the big performance divergence between the midcaps and the largecaps and even within the largecaps, there is a further performance disparity. So whilst the Index is showing us a very pretty picture, as market strategists, we would be ignoring very clear signals that there is something in this market, which is hurting really badly. Even in the last two days when the market did make its highs, I think 10 out of the BSE 30 stocks from the BSE Sensex were negative. That's not a good sign and the last time that kind of thing happened was in April 2004, when there was a very poor advance-decline ratio. So the fact is that we live in a real world; all of us have daily bills to pay, mutual funds have daily NAVs to report, they have to be aware of this kind of performance. Yes, maybe the Index will again take us to a new high next Diwali. What happens to the broad majority of the market is what is of real interest to me more than just 20 stocks in a 30 stock market. The point is that one has to still understand that in largecaps, there are not just 10 stocks that anybody can own. But most people have to diversify out into larger baskets, therein you are not up 62%, maybe you are up only 30%, which is still very good gains. So there is no disagreement on the gains the market is delivering, there is no debate whatsoever. But the fact is, one should be aware of the fact that this time one may see certain signs, which are not signaling anything drastic. But it could be another May, which is very drastic.
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Tags: Sensex, Diwali, Rakesh Jhunjhunwala, Ramesh Damani , Shankar Sharma , First Global , bull market, NAV, redemption, Index |
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Jhunjhunwala: Although we have news highs and all the festivities, I find a lot of doubt and skepticism all around. But to my mind, I think the trajectory is upward and the pace is debatable. I feel that the Indian economy is constantly surprising on the upside and I think that surprise will continue, as there is vast under exposure to equity. Of course, we could have corrections anytime. But broadly, we are in the midst of a long bull market.
Sharma: If one takes a perspective of 5 years clearly, one can't really go wrong by going long in this market. The trouble is that most householders, mutual fund managers as well as most hedge funds don't have the same luxuries of buying and holding for 5 years. That's what really creates the skepticism that Rakesh is talking about. 
