This is worst bear market in living memory: Antique's Doshi

Moneycontrol Bureau

Benchmark indices are likely to be rangebound in the near future, in the absence of any significant triggers, feels Kirti Doshi of Antique Stock Broking.

"There is no case to be bearish, but till there is some clarity on the rupee and politics (because of the general elections), there is no case to be gung-ho either despite attractive valuations," said Doshi in a free-wheeling chat with moneycontrol.com.

Doshi feels the first quarter corporate earnings season is unlikely to throw up too many surprises, positive or negative.

Expectations from the June quarter numbers are low, with most analysts estimating aggregate sales growth to be at its lowest in many quarters.

"An overwhelming majority of the stocks are already reflecting earnings expectations,” Doshi said, adding “…that explains why some stocks are still expensive despite the recent market correction and the rest are not finding any takers."

Doshi says there could be a few positive surprises, but the impact on sentiment would be limited.

“A handful of stocks may surprise, but they are not the market,” he said, adding that investors were buying many shares at expensive valuations, as a defensive bet more than anything else.

Attractive valuations in themselves may not be a trigger to start buying shares.

"You may have stocks available at dirt cheap. But 85 percent of these stocks are dependent on government policy actions. Till you have some clarity on that front, investors are not going to bite," Doshi says.

He points to the Jet-Etihad deal, which has not been approved three months after it was announced in late April.

"Such inter-ministerial wrangling is further undermining sentiment," he says.

Doshi, who has now been in the stock market for around 35 years now, says this is the worst bear market as far as he can recall.

"Things were bad in the mid-90s, in 2001 and in 2008 as well. But what makes it different this time is the massive debt on the books of companies. That was not the case in the previous bear phases,”"Doshi says.

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And he says the key indices are not adequately reflecting the turmoil in the broader market.

"You have a couple of dozen stocks that investors are focused on, and these stocks are not seeing any big moves on either side," he says.

Doshi says he will selectively buy Hero Honda, Maruti, Bajaj Auto, TCS, HDFC and IndusInd Bank, and cement stocks.

"None of these stocks are exactly cheap, but we will look to accumulate them at attractive entry points," Doshi said.

He is among the minority who are bullish on the cement sector.

"I would look at them as a replacement cost play than a pure earnings play," he says.

santosh.nair@network18online.com