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New-age tech stocks can see more volatility, says Aberdeen Asset’s Hugh Young

Stocks of new-age technology companies have seen a meltdown over the past two months led by investors’ apprehensions over their rich valuations.

Mumbai / February 28, 2022 / 11:07 AM IST
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Shares of new-age technology companies will remain volatile going ahead till investors see signs of earnings for many of the loss-making companies in the space, Hugh Young, Managing Director Asia for Aberdeen Asset Management told CNBC-TV18 in an interview on February 28.

Stocks of new-age technology companies have seen a meltdown over the past two months led by investors’ apprehensions over their rich valuations at a time when global interest rates are likely to rise sharply in the remainder of the year.

US Federal Reserve’s indication late last year that it may soon start raising interest rates to stave off high inflation was the turning point for listed new-age technology companies, which took the domestic equity market by storm earlier in 2021.

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Young said that investors will continue to raise question marks over new-age technology companies that are currently loss-making in the current macro-economic environment. Aberdeen had invested in the initial public offering of companies like Nykaa-operator FSN E-Commerce Ventures and Paytm-owner One97 Communications.

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Young termed the performance of Nykaa and Paytm’s stock as disappointing but highlighted that only a small portion of their funds were invested in both the companies. That said, Young believes that earnings performance for these companies will come through eventually.

At 10:40 am, shares of Nykaa were up 0.6 percent at Rs 1,302.15 on the National Stock Exchange, while those of Paytm were down 0.6 percent at Rs 784.8.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



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