In my view, by next Diwali Indian Economy may well be poised to start the journey of a multi-decade growth story, what we had seen in year 2004 to 2010.
Amit Jain, Chief Strategist - Global Asset Class at Ashika Group, feels Nifty may easily surpass the 13,000-mark by next Diwali, as India may witness much faster economic recovery post COVID-19 vaccination in April 2021. He expects GDP growth above 10 percent for FY21-22 in India.
He believes the next leg of the rally may be driven by FIIs, as now there is no uncertainty in the US election.
Post Joe Biden victory, Jain may see easing of geo-political tension in the next three months, which may be good news for global businesses.
Jain sees value buying only in a few sectors - Infrastructure, Metal, Cement & selected PSU with market leadership may be a good bet to invest keeping next Diwali in mind.
Q: What is your reading on the market rally happened so far and what is your outlook for the market by next Diwali. Where do you expect the Nifty by next Diwali - 13,000 or 14,000 or 15,000 and why?
Global markets had been buoyant due to the expected win of Joe Biden, as markets believe that post Democratic party win in US, World will pass through this current geo-political turmoil between China & US. Hence, it will give a boost to global trade & bring back normalcy in World Economies trade relationship. In my view, Nifty may easily surpass the 13,000 benchmark by next Diwali, as India may witness much faster Economic recovery post COVID-19 vaccination in April 2021. We ].
Q: What is your advice to investors on this Diwali (Samvat 2077) and what is the strategy they should adopt going ahead, considering the current market and economic condition?
The strategy for investors should be to buy at every dip in the market in selected sectors & stocks. Also investors should choose companies with least debt along with leadership positions in their respective product market. Investors should choose to invest in businesses with 'asset light business models' where tech is enabler for their quick expansion across geographies, at low cost.
Q: What are those sectors which one should always keep in the portfolio and why?
At this point when the market is at its lifetime high, we see value buying only in a few sectors, to name a few, Infrastructure, Metal, Cement & selected PSU with market leadership may be a good bet to invest keeping next Diwali in mind. Also, we have a contrarian view on the Real Estate sector, as they are in bear run for the last ten years & I believe they are at verge of bottoming out. This sector along with the Infrastructure sector is directly proportional to domestic GDP growth, which we are bullish on keeping FY21-22 & beyond in mind.
Q: Data points (PMI, auto sales etc) indicated that India is on the recovery path after COVID-19 crisis. Do you really believe so, and where do you see the economy by next Diwali (in terms of growth as well other data points)?
Yes, Indian Economy has recovered very fast from -23 percent Q1 GDP de-growth compared to corresponding period. On the contrary, if you visit the market today, you will hardly find any fear of COVID in anyone's mind. Lockdown has eased upto 80 percent of Pre-COVID Economic activity level. GST collection is back Rs 90,000 crore plus mark, so we can say that Economy has recovered.
From this point, we will only see growth picking up to next level across all sectors of Indian Economy. If you closely observe data points, then you will notice there is lot of pent up demand which is unfolding & it will continue to unfold for next six month. In my view, by next Diwali Indian Economy may well be poised to start the journey of a multi-decade growth story, what we had seen in year 2004 to 2010.
Q: What are those key risks and triggers for the market, on the domestic as well as global front, in Samvat 2077?
On the Global front possible risk is Geopolitical tension between developed nations & Islamic World, which may put some break on free movement of trade & work force across the Globe. Also, decreasing faith in the US Economy & dollar is a matter of great concern for the World Financial Market. Increasing NPA's may be a big risk for both Indian & Global Banks once this era of COVID-19 goes away. In our view, the banking sector need to be prepared for much more write-offs & they need to be adequately capitalized to stay afloat.
Q: Will the FII flow continue in Samvat 2077 and what is your reading forex reserves which is at all-time high now?
In this calendar year FIIs have broadly missed Indian Stock Market rally. FIIs were net sellers close to Rs 48,000 crore till YTD. On contrast, Nifty is up almost 60 percent from March lows, as it is a more DII driven rally, rather than FIIs. In the last one year we have seen a net addition of over 50 lakh new demat accounts, which has helped this market to go up significantly. In my view, next leg of the rally may be driven by FIIs, as now there is no uncertainty in the US election. Post Joe Biden victory, we may see easing of geo-political tension in the next three months, which may be good news for global businesses. India's forex reserve is near to all-time high at $520 billion, which may be good news from an exchange rate point of view.
Q: On this auspicious Samvat 2077, what are the segments (equity, debt etc) one should consider for investment to become the CROREPATI? What should be the duration he/she should consider to achieve the CROREPATI target if he/she starts earning at the age of 25 and wants to invest?
At this age I suggest no Investment in debt mutual fund schemes, as he / she is young enough to take risk. They can only keep 10 percent in debt MF to meet their liquidity needs. For investments they should invest 20 percent in large cap funds, 40 percent in midcaps & 30 percent in smallcaps funds. This portfolio mix may be generating a CAGR of 14 percent in the next 10 years. If they do SIP of Rs 40,000 per month, then they may easily accomplish their goal of Rs 1 crore corpus in next ten-year.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.