SENSEX NIFTY
Dec 29, 2012, 04.30 PM IST | Source: CNBC-TV18

See new highs in 2013; bet on quality stocks: Experts

On CNBC-TV18's special show 'The Informed Investor', Rajiv Anand, managing director and chief executive officer, Axis Asset Management, investment analyst Dipan Mehta, SP Tulsian of sptulsian.com and independent analyst Ambareesh Baliga give their outlook for 2013.

The Indian market witnessed a spectacular rally in 2012. The Sensex has jumped over 25 percent. Will 2013 be as good as 2012?

On CNBC-TV18's special show 'The Informed Investor', Rajiv Anand, managing director and chief executive officer, Axis Asset Management , investment analyst Dipan Mehta, SP Tulsian of sptulsian.com and independent analyst Ambareesh Baliga give their outlook for 2013.

Mehta says 2012 was a great year. "It marks a line between the bear market and beginning of perhaps a new bull market. In 2013, investors should invest in quality companies only," he asserts.

Meanwhile, Baliga says the market may see new highs in 2013. "You will have individual stocks moving. Right now, I have turned bullish on metals. I think metals will see a decent performance next year," he adds.

The ultimate theme of 2013, Tulsian says, will be the price-to-earnings (PE) expansion.

Year 2013: 11 stocks that can give you handsome returns

Below is the edited transcript of the interview on CNBC-TV18.

Q: How has the year been? Are we happy at the end of the year?

Anand: It has been a pretty good year, isn’t it? If you look at asset classes, equity has done very well, midcaps have done even better. Fixed income funds have delivered double digit returns. I don’t think investors have too much to complain about.

Q: Retail investors couldn’t have asked for more and yet he is not here in the market, why is that?

Tulsian: That is the problem. Inspite of a fine performance by the market, retail investors have not been able to make money. The problem with the retail investors is that they always look to enter at the fag end of the rise. I am referring to the stock specific valuations.

Second problem with retail investors is that they don’t have the patience. Patience is the key word. If they follow that, probably 2013 can give good returns. They have not yet missed the bus.

Q: When you look back at 2012, do you think it has been more about individual stories than the market per se?

Baliga: It has been individual stories and couple of sectors. Airlines, for example, have performed extremely well. The stock performance has been excellent. You had multi-baggers in Jet Airways, Spicejet.

As far as market was concerned, we got into 2012 without any expectations. Expectations were low. The government was not performing. The difference is that we are getting into 2013 with a lot of hopes. Possibly we should see new highs for the index. In that, you will have individual stocks moving as well as couple of sectors. Right now, I have turned bullish on metals, which I was quite bearish on for last year-and-a-half. I think metals will see a decent performance next year.

Q: How has the year been for you? Are you happy with the way things panned out?

Mehta: Yes, absolutely. The real highlight of the year has been that good quality stocks, the ones with good corporate governance and very high return on investments (RoI), return on equity (RoE), excellent past track record, have all come out with fantastic returns. In terms of corporate profitability also they have delivered.

When I look back, the year has been fantastic for investors per se. It was much needed also, considering the hopeless situation which we were there at the beginning of the year and what we have seen from 2008 onwards. It is a great year. It marks a line between the bear market and beginning of perhaps a new bull market.

Q: How do you look at the stocks that didn’t work out very well?

Anand: In any market that is bound to happen. At various points in time, various parts of the market will not deliver for you. At the end of the day, if the portfolio has delivered for you, as mutual fund managers that is really what we focus on.

In 2012, for us, in Axis, we are quite happy. We were able to manage the risk on our portfolios very efficiently. We continue to stay focused on quality. Our funds have delivered better than market returns and better than peers. So, we are quite happy to have delivered in this market.

The performance of the fund need not necessarily be the performance of the investors. Midcap funds are up 30-40 percent, but the problem is that we have also seen Rs 51,000 crore of redemptions from domestic institutions. Has the retail investor benefited from this? The answer is probably no.

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