 Next mkt trigger to come from Parliament session: SBI MFPublished on Wed, Nov 22, 2006 at 16:25 | Source : Moneycontrol.com Updated at Wed, Nov 22, 2006 at 18:31 Like this story, share it with millions of investors on M3
SBI Mutual Fund suggests that the time has come to focus on infrastructure and companies that are into their capex mode. Sanjay Sinha, Head of Equity at SBI MF suggests that the non-metro cities will play a major role in the coming future and the rural economy is all set to change in the coming five years. Sanjay Sinha, while speaking exclusively to moneycontrol on the sidelines of the launch of their latest MF product - SBI One India Fund, in Mumbai, said that the next trigger for the market will be due to the news coming out from the Parliament session on issues like pension reforms and amendment to the SBI Act that could enable the government to buy out RBI's stake in the bank. (Check out - New Fund Offers open now) Excerpts from CNBC-TV18s exclusive interview with Sanjay Sinha: Q: How do you see the markets going forward now that it has breached the 13,700 level? Can a correction be expected anytime soon? A: I cannot comment on the short-term outlook, but the rally has been sharp. The rally has been on the back of strong Q2 numbers from corporate India especially after the advanced tax numbers were announced. However, the next trigger for the market will be due to the news coming out from the Parliament session on issues like pension reforms and amendment to the SBI Act to enable the government to buy out RBI's stake in the bank. The liquidity in the market is strong, however, some of the large number of public issues that are expected soon could drain the liquidity in the market. It's not likely that we will see a correction in the current scenario. Q: If you were to cherry pick, which sectors are good bets at this point in time? A: As a fund house, we think there are opportunities in the IT and Engineering sectors. The pharma sector is not recommended although there are individual stocks within that sector that could be good bets. Equity markets are rallying globally. The markets are trading at a little premium, but on a relative term this premium is justified since the sound structure of the Indian capital market do command a premium. Investors need to take a long-term view of the economy. Q: A few experts have suggested that fund managers are not equipped to deal with markets at these levels - this was some time ago when the markets were at 12,000? What is your take on this? A: Fund managers are equipped to deal with stocks at certain valuations. If you look at the market rally between 10,000 and 13,600 you will find that 2000 points in the rally were due to the large cap stocks as opposed to other stocks. In the next three years there is sufficient scope for the market to appreciate. Q: With the focus now on SEZs and infrastructure, how important are construction and infrastructure stocks to one's portfolio? A: If you are going to lean towards a particular sector, then you need to be nimble footed. The infrastructure stocks are long term opportunities. So it's best not to take a call on sectors, rather look for individual stocks in terms of their potential. - Kishore Butani
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