No reason to believe 2023 will be a bad year, says Helios Capital's Samir Arora

Samir Arora

The year 2023 is not the bad year that hits stock markets once in every five to seven years, Helios Capital founder Samir Arora said in an exclusive interview to Moneycontrol on July 4. “It is a handleable year,” said Arora pointing that there are no big risks on the horizon that could result in a significant drawdown.

While the markets have hit an all-time high, Arora does not feel the market are overheated. According to him, Indian markets over long periods have delivered 12 percent-14 percent annualised return. These returns, however, are not linear, and there are years when the returns are significantly better than the average and some that are average or somewhat below average, and then one bad year with a sharp correction.

However, over the last five-year or seven-year period, the markets have not matched up the longer term averages. By that logic, it should have some runway to race ahead, Arora said.

Watch the complete interview with Samir Arora here

“This all-time high creates a very misleading perception. We are still below the normal seven-year average, forget the five-year average,” he said. “Therefore, this is certainly not that really bad year when you see a sharp correction.” The current surge, according to Arora, is merely a compensation towards the poor performance that the index displayed before March. “This new high is no indication of the future…nor does it mean we have gone overboard. ,” he said.

In addition to this catch up potential, what is playing in our favour is also the China factor. Foreign flows have normalised. And even on the domestic front, everything seems to be broadly in place including GDP growth and the corporate earnings story, Arora said. Besides, along with foreign investors turning bullish, after a long time, both domestic institutions and foreign investors are both on a buying spree, he pointed out.