Buying seen at 5200, prefer realty & infra: Prime Sec

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Buying seen at 5200, prefer realty & infra: Prime Sec

Indian market seems to be returning what it had robbed investors off last year. With a strong rally, foreign investors too are following the Indian shores. However, N Jayakumar, president at Prime Securities feels that the market has not been able to capture the rise fully.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

Indian market seems to be returning what it had robbed investors off last year. With a strong rally, foreign investors too are following the Indian shores. However, N Jayakumar, president at Prime Securities feels that the market has not been able to capture the rise fully.

In an interview to CNBC-TV18, Jayakumar said that the picture looks brighter even now. He is expecting it to head higher but with minor corrections. Looking for 5000 level as a support, Jayakumar sees buying interest at around 5200.

"There will be corrections, no question, but for the moment I think the markets maybe heading higher and certainly any sharp corrections into the 5,100-5,200 range will be met with more buying ," he explained.

As an investment strategy, he is betting on real estate and infrastructure while defensives like FMCG and pharma are likely to underperform.

Below is the edited transcript of Jayakumar's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.

Q: Markets conditions have changed quite a bit since we last spoke. Do you think this is the real thing or would you be taking profits here?

A: The rally has been fabulously strong. Even for people who have been bullish in the market, this has come as more than just a breath of fresh air. From bottom levels many stocks are up 30-40%, not that people invested at the bottom and therefore captured this rise. But for the first time traders and people who have re-entered the markets have seen gains, gratification almost instantly.

The power of the rally has been much more. It has taken markets to much higher levels than expected. For instance, I thought 5,200-5,250 may well be the high end of the trading range of 4,800-5,200. The market now begs for a relook if you will. There will be corrections, no question, but for the moment the markets maybe heading higher. Certainly any sharp corrections into the 5,100-5,200 range will be met with more buying, no question about that.

Q: There are two opinions about the money flowing in the market. One that it is long only money and another says that the hot money is chasing momentum. What are your thoughts on that?

A: It is difficult to categorize money in those baskets necessarily. It would be uncharitable to say that if USD 2 billion walked in this is going to be hot money and that will go out. It is clearly led by momentum. Success begets success and momentum begets more of it. So, there is money coming in because they are seeing gratification, prices moving up.

But one thing is for sure lot of long only players have attempted to buy into large parcels in the market. A lot of PE funds will be in stuck and waiting to exit are also beginning to do so. At one level Rs 5,400 is the sort of a point where a number of PE and long-term investors in the country are taking profits as well while committing money to new ideas. This is a point which is not going to be easy to pull away from in a hurry.

Q: Do you track the Thomas Cook variety, the hospitality, travel space? What kind of price do you think it may fetch on a sale?

A: We would be conflicted talking about it because we are sort of one of the investment bankers involved in some form or shape in the deal, so I would rather not talk about it.