The Indian market, at the moment, is a bit out of sync with the economic reality of but ultimately will fall on the lines of earnings, as the rise is certainly not justified by fundamentals, Aberdeen Asset Management Asia Limited Managing Director Hugh Young has said.
The market was a little too exuberant but he was comfortable as a long-term investor, Young told CNBC-TV18 on April 30. "As a long-term investor, I am pretty comfortable," said Young.
While the market is just 20 percent off recent highs, the economy appears to be contracting.
Talking about the financials, Young said Indian financials were witnessing the long- term issues.
"For us, the policy still is to stick to the best ones such as HDFC and Kotak Mahindra Bank. We have not been tempted into new names. The difficulty over the recent years has been the valuations of the quality players from this sector," he said.
FMCG has been one of the top sectors for Young in the past. On the emerging trends, Young said for long-term investors, it made sense to hold FMCG stocks but for short-term investors it was a tough call, as it was hard to find quality and valuation was frightening.
Young also indicated he wouldn’t rejig India funds but minor tweaks were possible.
"There may be some tweaks in India fund but no major changes. In a broader context, the relative valuations between China and India have improved in India's favour," he said.
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