"I am surprised by the sharp fall in global markets. In fact, the speed of fall seen recently is quite different compared to past, as today, 80 percent of global trade happens by algorithms which are much faster than human beings," Manish Chokhani of Enam Holdings said in an exclusive interview with CNBC-TV18.
However, Chokhani thinks that the current market temperament is not unusual as it is reacting to the fear of supply chain disruption from China. He believes the gap left behind by the Chinese will open up opportunities for India.
The worst is behind us, as most stocks are now trading at attractive valuations, Chokhani added.
The rising worries over global growth due to fast-spreading novel coronavirus outside of China and oil price war ignited by Saudi Arabia with Russia after OPEC and allies failed to agree on production cuts hit global markets sentiment.
Coronavirus fears and crude war have taken a toll on the markets around the world. Consequently, global markets have been on a downward trend since the beginning of February. Indian have also borne the brunt, falling around 14 percent from its record high seen in January.
For India, oil at $30 a barrel with no supply chain disruption like others (including China) is a great opportunity, though weakness in rupee is a risk, Chokhani said.
International benchmark Brent crude futures fell below $30 a barrel on Monday, from around $45 a barrel last week after Saudi Arabia slashed its selling prices by $6-8 a barrel. Now, oil prices recovered to trade around $38 a barrel amid hopes that the US may announce production cuts.
Chokhani went on to illustrate the lucrativeness of the market currently.
"If one looks at the financial sector with 3-5 years perspective, (look at ICICI Bank, HDFC Bank, Kotak Mahindra Bank, SBI) will it they be at the same price as today's?"
On the COVID-19, he said the West is aging demographic area now. When you become older then you are most worried about your health. You become more conservative or one can say health issues look more dominant over wealth.
That is why everyone is happy about opportunities available in India where the young population is very large, he added.
Coronavirus cases jumped to over 1.13 lakh globally with more than 4,000 deaths.
To minimise the impact of virus on the global economy, central banks around the world announced rate cuts in the range of 25-50bps with fiscal stimulus packages.
"Markets are not focussed on rate cuts now and expects large deals in terms of fiscal stimulus. Hence, balance sheets of governments may deteriorate with lower interest rates. Therefore, there may be a change in regime and long term will be played by currency. Even if the rupee is at 40 or 100 a dollar, exports of India are not going to change at all," Chokhani said.
He further said now people are not buying stocks from sectors like aviation, hotels, carnival. "Same is the case with oil and commodities complex which already collapsed. Hence, you can go for companies which provide 6-8 percent dividend yield."
On the opportunities, Chokhani said today consumer stocks were expensive, hence there would be sideways to normal correction. "In case of pharma, lot of APIs started coming out of China, while in case of media, advertising revenue will see a dip till next quarter and the pouring in money for OTT business will need to see how it helps."
Telecom is a consolidation story, he said, adding in financials - there are lot of opportunities including NBFCs, insurance, AMCs which all are run by strong management, hence "I wish I could have more money in my hands I would have deployed all in such stocks where I see the value."
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