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Nov 15, 2011, 12.08 PM IST
In an interview with CNBC-TV18, Ambareesh Baliga the COO of Way2Wealth gives his stock specific views from the airlines and sugar sectors.
Below is an edited transcript. Watch the accompanying video for more.
Q: What have you made of Kingfisher ?
A: When you have two airlines with one leg in the coffin it is surely a good time to look at some other airline stocks. Although they are not performing too well surely there is a hope. Jet Airways is a stock which one should be looking at, a stock which has come down nearly 70% and now with all these problems they should be able to increase their fares and possibly ride out of the red possibly in the next three-four quarters. So that is one stock I am looking at.
Q: What is your take on the market now? Do you think we are headed to sub 5,000 levels or will we hold this 5,000-5,400 range?
A: I am still quite hopeful. I have been meeting investors across the country and finding two types of people - those who are extremely bearish on the market and the other set of people are extremely cautious on the market. Clearly, equities are a word which nobody wants to discuss.
This generally happens when the market is close to the bottom and we are exactly there. The question is how long, which is a billion dollar question which no one knows whether it is going to be for the next two months or whether its for the next six months but there is a lot of pain which we need to bear. It seems that we are somewhere close to the bottom.
Q: What is the call on ADAG pack now because those stocks have seen substantial rallies but some of the numbers have not borne through?
A: This sort of rally is a debt cat bounce. After such a drastic cut in the last one year, a 10-12% sort of rally is not a rally it is only some sort of a bounce back. Still the only stock I would look at in this pack is Reliance Communication because that is the only company which could be a decently good takeover candidate.
Q: Some of the consumer favourites like VIP and Jubilant Foodworks etc have started seeing some unwinding. Would you expect more downside here?
A: There could be because these are the only stocks where investors are making some money because the rest of the portfolio is making a loss. It is quite natural that in the given market scenario, it is prudent to book out to a certain extent in these stocks where you are making profits which is exactly what is happening.
Q: What are you telling your clients to do in the sugar space?
A: We have been negative on sugar for close to a year, especially, when Shree Renuka was Rs 90 plus, we had given a sell call. Even lately we were saying that itís only the trading range of Rs 55-68 that people should be playing in that range and once that range is broken one should be out of it.
Yesterday, after that savage cut, in this region of about Rs 32-38, fundamentally one can start looking at sugar again. I am talking of a much longer-term because you need to wait for the next season which is the time you could have some hope but if you have a six month view, itís better to stay away.
Q: Yesterday midcaps did quite poorly. What do you think is going on there with stocks like Educomp, Gati and Dish TV which all started crumbling?
A: People are worried about balance sheet issues. Corporate governance is another issue which people are worried about. I donít think people are really looking at midcaps at this point in time. We also feel itís not prudent to look at midcaps right now. In case one wants to buy, there are a lot of largecaps which are available at decent valuations so people should start looking at the largecaps as compared to the midcaps.
Tags: markets, nifty, sensex, Ambareesh Baliga, Way2Wealth, Jet Airways, Shree Renuka, Jubilant Foodworks, VIP
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