Midcaps are still cheap but wait for the market to settle down and buy good stocks on reaction, Vijay Kedia, MD, Kedia Securities, said in an interview with Moneycontrol’s Kshitij Anand.
edited excerpts:
Q: A big short in the arm by the government to Indian corporate house. Some are even saying that it is the biggest reform since 1991. What are your views on govt slashing tax rate?
A: I am delighted to share my tweet dated August 29 where I mentioned that my sense tells me that this government is in the mood to bring reforms similar to what we saw in the year 1991. Fortunately, the same happened, and I think it is a game changer for an otherwise ailing economy and India.
Q: Can we say that the government has given a Diwali gift to corporates will in advance and reversed the bearish trend in the markets?
A: Well, Diwali comes every year. It is like a ‘Purna Kumbh Mela’ which comes once in 12 years. And, it will certainly change the bearish sentiments on the D-Street.
Q: If the momentum continues, can we hit a fresh record high by Budget 2020?
A: Yes. It is very much likely as there are hardly few bulls left alive in the market.
Q: What is the fine print on the buyback tax on listed companies? Do you think it will lead to more buyback offers to hit Street?
A: This benefit is only for the companies which passed a resolution before July 4. Future buyback won't enjoy this benefit.
Q: Which companies or stocks that are likely to benefit the most from the slash in corporate tax rate?
A: Thousands of companies which are falling into the bracket of full tax of 35 percent plus can now clearly save 10 percent and deploy that 10 percent back into the company.
Q: What are your views on the government which has been proactive at every front to boost the economy and put India back on the $5 trn economy mark?
A: This is the first bold positive move by the government that shows that it is just the beginning.
Q: Do you think FII flows would reverse following the announcements?
A: Yes. They have been a constant seller in the market since the last 2 months. Now, that trend will change. They can't take risk on their career by avoiding India.
Q: What should investors do if they missed the rally on Friday?
A: Midcaps are still cheap but wait for the market to settle down and buy good stock on reaction.
Q: Last 10-year data suggests that bears controlled October as Sensex closed in red in six out of the last 11 years. What are the big events to watch out for, and how do you see markets moving in October?
A: Don't know about October syndrome but this government will leave no stone unturned to make it a $5 trillion economy by 2024. I feel now onwards, you will have an event almost every month. I feel ‘Apna Time AA Gaya’.
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