Sep 01, 2017 11:35 AM IST | Source: CNBC-TV18

Edelweiss' Khemani sees strong market going ahead; expects GDP to recover in few quarters

Says the market has mostly ignored the GDP data as they are placing their bets on the structural story of India.

A day after the government reported lower-than-anticipated gross domestic product (GDP) figures, the market seems to have taken it in its stride and was trading in the green. The Sensex opened higher by 25.19 points, while the Nifty rose 6.2 points to 9,924.10. The broader markets outperformed, rising half a percent in the opening trade.

This stance by investors could be due to their belief in structural reforms being carried out in the country, Edelweiss Securities explained.

“Potential of the economy growing at 8-9 percent, inflation going down, other markets not giving good returns is all making the market ignore short-term pain. Plus, domestically, money is coming in from investors in terms of financial assets,” Vikas Khemani, President and CEO, Edelweiss Securities, said in an interview to CNBC-TV18. Moreover, the market will remain solid on a sustainable path, with minor corrections, he added.

Speaking on the GDP data, Khemani said that GST, RERA and demonetisation had a short-term impact on the economy. Having said that, we are in the middle of transformative phase and the GDP should be back to normalcy over the next couple of quarters, he added.

Based on these, the market will also remain strong, backed by strong domestic inflows, he said, adding that this is just the beginning of the trend and household savings could move more towards financial assets.

In terms of sectors, he remains positive on BFSI space and recommends allocating 30-40 percent of the portfolio to financials.

Additionally, Khemani is very bullish on housing finance sector as it has the potential to grow well and added that one must choose sectors aligned with India’s growth story.
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