Amit Jain, who co-founded Ashika Global Family Office Services believes most of the global risk factors were ignored by the Indian market in the last month due to favourable States election results and US Fed interest rate stance.
Now, the Nifty will resume its sustainable upside rally post Q3FY24 results, he feels.
Even at current levels, the expert with more than 18 years of stint in the Indian banking and financial services industry believes the current rally in the banking sector will continue in the calendar year 2024, as this space offers the maximum value buying opportunities for large HNI and Institutional investors.
He feels a lot of FIIs are experiencing a FOMO (fear of missing out) feeling. They will have no choice but to invest in Indian markets moving forward, Amit says.
Q: There is a flood of IPOs in December. Are you taking or willing to take exposure to any of these IPOs?
Since our last media interaction almost a month ago, the broader market has already given a return of 8 percent to 10 percent, which reflects that the Indian markets are in a perpetual bull run. In this kind of perpetual bull market, we always see a flood of IPOs. This is what we are seeing in December 2023.
Out of the 7 IPOs, I feel comfortable investing in Motisons Jewellers, Happy Forgings, and Muthoot Microfin from a short-term listing-gain point of view.
Q: Do you think most of the risk factors (known) will be behind now with the end of the calendar year?
I believe most of the Global risk factors have been ignored by the Indian market in the last one month due to favourable States election results and favourable US Fed interest rate stance. Today the Nifty spot is around 21,457 which I believe is a fair valuation at least for the short-term and any risk-averse investor may book a partial profit at current levels. Now Nifty will resume its sustainable upside rally post Q3 results.
Also read: Bengaluru's chip designers give India an edge in semiconductor industry, says Chip War author
Q: In addition, will the market provide 15-20 percent return in 2024 as the focus is increasing on large caps over midcap and smallcaps?
This is what we said exactly in the last interview that large caps were highly undervalued compared to midcap and small caps almost a month back. However, the gap in the valuation has come down as large caps have rallied almost 8 percent to 10 percent in the last one month.
Hence, at current levels, it looks fairly valued. In this calendar year, Nifty has given a return of over 18 percent which is a good return by any standards. I believe that this rally may have a certain leg that can take Nifty to 21,500 in the short term.
Q: Do you expect another leg of rally in realty space in 2024?
The Nifty Realty index has given a return of 80 percent this year, which is a tremendous performance by any standard. This rally in the Nifty Realty Index has come after a long gestation period of 11 years, which I believe will be sustained in the calendar year 2024.
Also read: IT, pharma likely to be biggest beneficiaries of FII inflows. Here's why
From January 2010 till October 2021, Nifty Realty index has given a negative return. Hence, I believe this rally will continue in the short to medium term.
Q: Is the green energy & traditional energy space looking interesting for investment?
Yes, I believe both the Energy Sector and Renewable Energy Sector have the potential to grow at a double-digit growth rate from here on. The stocks like REC, PFC and IREDA, have already given a return of 100 percent in the last one year which show their potential for further growth as the market continues to believe in their business models from a medium to long-term perspective.
Q: Are you betting big on the entire banking & financial services space or preferring private banks over PSU banks?
We have been consistently bullish on the banking industry since our last two interviews. Most of the private banks’ share prices have increased by 8 percent to 12 percent since our first interview on the banking theme almost three months ago, while in the same tenure, PSU banks have given a return of 13 percent to 20 percent.
Also read: 12 public issues hitting Dalal Street with 8 listings lined up next week
Even at current levels, I believe this rally in the banking sector will continue in the calendar year 2024, as this space offers the maximum value buying opportunities for large HNI and Institutional investors. Even retail investors can make excellent returns in PSU banks from here on.
Q: Do you think a significant amount of foreign money is waiting on the sidelines? Any major reason?
Yes a lot of FII, in my opinion, have been missing out on Indian markets over the past two years, and as a result, they are experiencing a FOMO (fear of missing out) feeling which will urge them to invest in the Indian markets even if the market gives a price corrections of 3 percent to 5 percent.
New allocation for emerging markets and India seems a certainty in the calendar year 2024. As the US Fed has signaled a rate pause and at least three cuts in the forthcoming year, this will change the texture of the market from neutral to bullish.
Also, the stance held by the US Fed will create an Arbitrage Opportunity for dollar carry trades which will play out in calendar year 2024.
In the last two years, FII has withdrawn money from emerging markets and India as they were getting risk-free rate of return at a rate of 5 percent in US Treasury bonds, which was unprecedented from the past 15 years as they never wanted to miss that opportunity of 100 percent safe returns and that too with a fixed income of 5 percent. But, now this trend will reverse in 2024, hence, FII will have no choice but to invest in Indian markets moving forward.
Q: Are the equity and bond markets pricing likely to have soft landing in the US, given the action in the US bond yields?
Yes, it looks like they are pricing a soft landing in the US Markets, however, to me, it looks unlikely. At this moment in time, investors should invest in the right sectors that have visibility of growth for the next 3 to 5 years.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
