"Global events like Brexit and US-China trade will weigh on markets for the next few weeks", said Mihir Vora director and chief investment officer at Max Life Insurance.
Mihir Vora, director and chief investment officer at Max Life Insurance, spoke to CNBC-TV18 about the market volatility and global worries such as Brexit and the US-China trade tensions.
"The volatility in the market is both due to global and local uncertainty. Hopefully, by next week the local uncertainty related to politics will be out of the way and we will have a clearer picture as far the regime is concerned. However, the economic concerns in terms of slowdown, especially that in consumption remain and one will have to wait until monsoons are over to see how that pans out," Vora said.
"Meanwhile, global events like Brexit and US-China trade will weigh on markets for the next few weeks," said Vora.
With regards to the slowdown in the consumption space, he said, "Given the demographics and the long-term story, the 3-5 year view is still intact. However, we are seeing a slowdown in this space after quite some time and valuations too have corrected but we will get a sense of domestic consumption post the monsoons and if the demand does not come back then we could see some more downside in valuations."
With regards to autos, Vora said, "Structurally, not much has changed because cars are still underpenetrated category and consumer finance also has a long way to go in terms of penetration. So, the 3-5 year story is still intact. Fundamentally too the consumption story cannot go away."
With regards to the exposure of insurance companies to the large housing finance companies, Vora said, "The system as a whole does have exposure to this segment. However, not much exposure towards loan against property (LAP), builder financing or loan against share (LAS) because typically insurance companies assets are long-term in nature, so bond portfolios that insurance companies hold are long-term in nature and these products whether it is LAP, LAS or builder finance are 1-3 year products, so that segment may not be much exposed but housing and infra is a segment where insurance companies need to put a certain amount of money based on some regulations and there would be some exposure there."Source: CNBC-TV18