Inflows to keep markets in good spirits: Edelweiss Securities

Emerging markets are seeing good amount of inflows due to better returns, says Nischal Maheshwari, Head - Institutional Equities, Edelweiss Securities. Till these inflows continue in India, the markets will continue to see good times.Maheswari says ICICI Bank has reported good numbers in the first quarter. He does not see further pressure on asset quality for ICICI Bank. The bank saw good growth in retail but a muted growth in corporate business. He sees a limited downside on ICICI Bank.Above-normal monsoon is going to be good for the auto industry and the consumer durables sector.Autos is one space which looks interesting to us. Hero MotoCorp, Maruti Suzuki, these are some of the stocks which look interesting to us. The other one is consumer durables. Havells India and Voltas are some of the spaces which look interesting.Below is the transcript of Nishcal Maheshwari’s interview to Ekta Batra and Prashant Nair on CNBC-TV18.Prashant: How is the market looking? Markets trudging higher, pushing higher, but are you convinced that this is going to last and even if you get in here, you make money?A: Post the Brexit, what has happened is basically, the world over there has been a chasing of yields and you have seen that a lot of developed markets basically, the rates are negative and in India also, if you look at it, the yields have fallen to 7.13 in the morning today. So, this is what is driving the whole markets up.The world over, people are being forced to figure out where yields are. So, there has been a chase for that and because of that, you are seeing that they are being pushed into riskier assets and obviously, the emerging market is one of the aspects to find growth and to find returns. You are seeing good amount of flows happening. Till the flows are there, the market will continue to see good times.Ekta: ICICI Bank, what was your reading of it? 30 percent of watch list is going to get upgraded, so that is the silver lining or the fact that asset quality pains still exist?A: It was a good result. A bit disappointing that Rs 1,700 crore was not from the book, which was declared last quarter, but the silver lining was basically that 30 percent of that would be recovered in the year itself you have also to keep in mind that Jaiprakash asset which has been sold -- the cement asset -- possibly it is going to happen this year or the next, but since the deal has already happened and once it goes through, that recovery is also not factored in. So, I do not see much deterioration as far as asset quality is concerned.As far as the growth is concerned, there was good growth on the retail side, but the growth on the corporate side was a bit muted at around 11 percent. But they still continue to maintain the return on assets (ROA) and return on equities (ROE) at 13 percent. So, at these prices there is limited downside in the stock.For entire interview, watch accompanying video.