In most likelihood, it will be a populist Budget 2018 but the longer-term economic interest of the country will be taken into account to remain in the forefront as an Investment destination for global investments, Anita Gandhi, Whole Time Director at Arihant Capital Markets, said in an exclusive interview with Moneycontrol’s Kshitij Anand.
Q) Work on Modi Sarkar's last full Budget has already begun. What are your expectations from the big event, do you think we will see a populist budget this time around?
A. In most likelihood, it will be a populist Budget. However, the longer-term economic interest of the country will be taken into account to remain in the forefront as an Investment destination for global investments.
Q) What would you have done if you were the finance minister? What would be on your priority list?
A. The interest of the common man & retail investor & SME will be on the priority list. As their benefit will result into giving momentum to the economy.
Q) Which sectors are likely to see a ray of light in the coming Budget?
A. Private sector capex has still not picked up. We may see some measures to attract private sector investments in infrastructure segment.
Q) It has been a splendid run for markets throughout 2017. What is your expectations for the year 2018? Any big events which could derail the equity rally or market participants will be in a wait and watch mode ahead of general elections?
A. Since 2017 equity markets have given very good returns to the retail as well as Institutional investors. Going forward, domestic inflows are expected to remain strong, especially through SIP mode.
We need to see how FIIs allocations come for India in the year 2018. The sudden jump in oil & commodity prices can have a negative impact on margins of the companies. Otherwise, major economies of the world are expected to grow steadily.
Q) What are you recommending to your clients? Top five stocks for the year 2018?
A. In the Auto sector, we still like M&M & Tata Motors. In Cement, we like Ultratech Cement & Ramco Cement. In Textiles we like Arvind Mills & Nandan Denim.
Q) The September quarter results were not that bad, in fact, there were more positive surprises than disappointments. Do you think we could see a double-digit growth in FY19?
A. Robust growth is likely to pick up in H1 2018 as the drag from the uncertainty of demonetization and GST implementation is expected to fade.
Four months into GST, there are many changes specifically government cut GST for 178 items from 28% to 18%. All this will push earning upward and double-digit growth possible by the end of the year 2018.
Q) Which sectors are looking attractive or a possible play in 2018-19?
A. Sectors which are related to Housing for all by 2022 & sectors which have a positive impact from GST and RERA are the best to look out.
Government’s ongoing push on infrastructure, particular roads, will continue to support investment growth next year. The government has announced plans to build more than 80,000km of roads across the country over the next 5 years, with a total investment of USD106bn (0.8% of GDP).
Q) Equity truly outsmarted every other asset class barring Bitcoins. What are your views on this buzzing asset class? Do you think it is a bubble?
A. Difficult to comment at this juncture & we do not have any expertise to comment upon it. Unlike the bubbles in the tech sector in the late-1990s and in US residential property a few years later, a bursting of the bitcoin bubble should not have systemic, macroeconomic implications. The total value of bitcoin is (still) too small, and it has few links with the wider economy.
Q) After a blockbuster 2017, do you see domestic flows ebbing somewhat in the year 2018? If no, what is the kind of money you expect MFs to get in the year 2018? AUM level etc.
A. With MF Industry Witnessed Highest Net Flow Of Rs 40,000 Cr In Nov, 2017 the assets under management (AUM) and household savings as a % GDP indicate that the flow may remain intact in the medium term and current monthly average inflow of Rs 9,000 crore is likely to sustain.
Q) India Inc. raised over Rs70,000 crore so far in the year 2017. What is the kind of fundraising you expect in 2018? Any particular IPOs you watch out for? And, which sectors are likely to dominate IPO activity next year?
A. Fundraising in 2018 is expected to be more than funds raised in 2017. The year 2017, we saw a lot of Insurance Companies issues. We may see more of them coming in 2018. Companies with new technology ideas & digitization are likely to raise money in 2018, one can watch out IRCTC IPO next year.