Sensex could attempt for 9200 levels in Dec: Jain

A: That is an alternate cycle that we have always witnessed throughout the bull run. I am particularly happy to see this happen at a time when the market has not been going further up on the basis of heavy weight activity. It is good to see the midcaps space revive.

While the October carnage has been forgotten on the benchmark indices and a fresh new peak has been posted; in the midcaps, whether quality midcaps or completely market kind of stocks, on an average, there is still a minus 15% to minus 30% fall from the top that is waiting to be covered back. Seeing the midcaps space revive and the action shifting back augers two positive things.

First, there is the possibility that the Sensex could be consolidating around the 8700-9000 band. Along with that, the strength in the midcaps is my reason for confidence that towards the end of December, one could see another attempt at 9200 levels.

Q: In the shipping space, would you look at anything in specific in today’s action?

A: The broader news on the shipping space is good. The freights have gone up. Even the ownership activity in terms of share accumulation is going on in these stocks. The international trade and commercial activity is certainly looking up. It is a sector that has perhaps not participated to the full in the market upmove. It is backed by good fundamentals; and the fact that fund managers and people seeking NAV outperformance and even HNIs are looking for better ideas. So Varun Shipping and Mercator Lines are certainly good picks in this space.

Q: What about the fresh commitment into the market? When you talk to people around you and to HNIs, what do they say? Are they saying that-let the markets slide a bit and then we will make fresh commitments. Or are they saying that-closer to the end of December-January, we will start putting in more money into the market? What sense do you get about cash coming in from closer home?

A: There is certain amount of trepidation in terms of fresh "buys" being made. Let me confess that even we are a little reluctant to give very serious "buy" calls at this point, because we have seen in the last 5-6 trading days that the market has been yo-yoing.

We are bullish on adding to core investment portfolios. Our call is that one could get a good entry point, perhaps 1-2% cheaper; there is no harm in trying to wait out for that. But on the other side, if one sees the market go conclusively on the 9050 mark, then one can jump in afresh, assuming that the breakout could then head closer to 10000 levels in the pre-budget rally.

But at this point, I would feel more comfortable recommending a stock, which has seen a high of Rs 200 and has yet to get back there, and is currently trading around Rs 160-Rs 170. Particularly if it is a good emerging blue chip in the midcap space, then my recommendations are more to that side rather than on the heavy weights.

Q: What is your outlook on ICICI Bank at this point?

A: I think that ICICI Bank is gearing up for an opportunity, which is rising in the real economy, manufacturing sector. Let us not forget that after 1995-96, today we are seeing a tremendous stimulus to investment in the real economy. The manufacturing sector is really going about setting up capacity. Once that capacity over build-up takes place, one could once again see a repeat of what happened in 1997-98, across sectors. But I think that the story could be a little different this time around, because of the domestic consumption. We are seeing a double-digit consumption growth across sectors.

The greatest story will be infrastructure investment where we are seeing geometrical multipliers or geometric progression coming on. I think that MD of ICICI Bank, KV Kamat and his team have taken a call on that sort of explosion, in terms of credit demands and off takes.

Retail would continue to be the biggest share in terms of ICICI’s loan portfolio growth, that is my own feel and the sense I get by looking at the way the bank functions. Retail would be huge. Given the management quality and aggression that ICICI displays, I think that it will be able to outperform atleast over the next two years, if not now.

Q: On a fundamental basis, would you buy ONGC now?

A: With all the usual disclaimers, personal and broking house related, ONGC is a blind buy.

Q: is there anything in the FMCG space, that is a blind buy?

A: One can begin with ITC and then probably extend it to Marico . Both are good picks.

Q: What is your view on stocks like Sah Petro and PTC?

A: I do not track either, but I think that Sah Petro is benefiting from volume off takes increase; thanks to the great Index of Industrial Production numbers. That is a direct correlation. Lubricants is doing well and we are also aware of the fact that there is an accumulation going on in that counter. Power Trading Corporation is a concept stock, which has not participated in the rally for several reasons, and I would recommend it as a "buy" for the long-term.

Q: Would you buy anything in technology right now?

A: I would buy. I would begin with the top four stocks and perhaps expand on to i-flex or Hexaware . I would even look at MphasiS BFL , despite concerns on the Barings stake sell. IT sector is somewhere, where I would probably put in 15% of my money at this point.