In a very optimistic call, Jim Walker, MD, Asianomics expects the current bull run in Indian indices to continue till 2018. In an interview to CNBC-TV18, he says this is not the time to think about end of the bull run instead it is great time to buy into the market.
Key Indian indices are on a strong footing from the past few trading sessions with the Nifty and Sensex scaling fresh highs, courtesy supportive global cues and improving macro data back home.
He further adds that signals that one is receiving from the new government in India are improving and on the macro-economic front as well, there are many positive developments.
On specific sectors, Walker finds value in industrial and cyclical stocks. He says the industrial midcap space holds the best value right now.
Below is the verbatim transcript of Jim Walker's interview with CNBC-TV18’s Latha Venkatesh & Sonia Shenoy
Sonia: 8,140 on the Nifty, at what stage of this bull run are we in?
A: I think you might be talking about 2017-2018 before this bull run is finished. We do have a global economy that is looking for growth and turns in the business cycle and India is providing that. I do not think we could be thinking about the end of the bull run anytime soon.
Latha: What sense you are getting about flows into India, do you think that they are going to remain robust even with the market scaling all time high?
A Other things depend on whether or not the market can deliver returns in the future.That is again dependent on economic growth and government decision making as regards getting the infrastructure programme moving and facilitating economic growth. But the good news is that everything we have seen so far in the last few months and from the bottoming of the Indian economy in a natural sense, the business sector has deleveraged and repaired its balance sheets and now beginning to pick up steam again.The segments from government although improving by organisation and the bureaucracy, trying to facilitate decision making and infrastructure development and infrastructure spending are very positive development for India. This means nominal GDP growth rate will go up and the company sector corporate earnings are going to surprise on the upside. I am not very sure that Indian stocks are very expensive at the moment. I think on two-three year view they are quite cheap.
Sonia: What should the stock wise or rather the portfolio approach be for investors now?
A: We still think that there is some very good value in Indian industrials and cyclical sector. We think it’s early to be very heavily exposed to the banking sector for example, but we still think the industrial midcaps space holds value just now.
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