Quality is the theme of 2018 rally; like realty, infra and consumption themes

Date: September 25 | Extent of loss: 504 points (1.29 percent)| Reason: Concerns over the health of the economy, news of impeachment inquiry against US President Donald Trump, tension in the Middle East and uncertainty over the US-China trade deal kept the market under pressure. (Image: Reuters)

While DII inflows have been positive, they have slowed down in past few months. One fear is will this figure come down due to lack of performance/mismatch of investor expectation.

We would be positively surprised if the net inflow by institutions continue to remain at an elevated level as they were in the first half of 2018, Prasanth Prabhakaran, Senior President & CEO of YES Securities, said in an interview with Moneycontrol’s Kshitij Anand.

After a strong August, market seems to have lost momentum in September. Do you see any upside from here?

This time around money is chasing stocks of quality businesses as compared to the run-up seen in the year 2008 where stocks of companies with poor fundamentals saw massive buying.

However, the key learning from the rally seen in 2018 is that even within the quality pack, companies which are showing higher earnings growth have outperformed.

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Prasanth Prabhakaran

Joint Managing Director & CEO|YES Securities (India) Limited

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In an environment of rising interest and bond yields, how should investors structure their portfolio?

In such an environment, it makes sense to invest in equities wherein the long-term returns have been positive and healthy.

Any top five stocks which you think satisfy the criteria of value at the great price and why? This is for an investment horizon of 1-2 years.

While we’ll avoid taking names of individual stocks, we like select themes. For example, we continue to believe that the problem of the housing shortage is real and that the need for quality infrastructure in the country is strong.

For that matter, the story of higher consumption and discretionary spends remains intact as well. Not to mention that the government’s push towards improving the livelihood of the rural and agri space does remain.

Considering rupee tailwind, is it time for investors to go overweight in IT and pharma sector?

The weaker rupee will definitely make exporters' services and products more competitive in the global market.

Both the Sensex and Nifty are trading at their all-time highs. Where do you see the indices heading in the next 6-12 months?

We would want to refrain from giving a view on the market levels. Our approach is to keep an eye on the prize i.e. long-term wealth creation.

For this, all investors need to do is keep a track on individual companies that are going about doing their thing…and doing their thing well! Investing in companies with such traits would be a good way to go about things.

FIIs have been sellers in recent times while domestic retail investors are filling the shortfall. Do you think the momentum is likely to continue?

While DII inflows have been positive, they have slowed down in past few months. One fear is will this figure come down due to lack of performance/mismatch of investor expectation. We would be positively surprised if the net inflows by institutions continue to remain at an elevated level as they were in say the first half of 2018.