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Last Updated : Jan 15, 2016 03:35 PM IST | Source: CNBC-TV18

Time to be long-term greedy in market: Amit Rathi

Amit Rathi, MD, Anand Rathi Financial Services is of the belief that the pain in the market could last for another 3-6 months and from there on one could see an upward trajectory.


Amit Rathi, MD, Anand Rathi Financial Services is of the belief that the pain in the market could last for another 3-6 months and from there on one could see an upward trajectory.

It is time to be long-term greedy in this market because one does not know how much pain is still left, says Rathi, adding that if one were to focus on the right side of the market, it is probably a great opportunity.

Sector specific, he believes that though midcaps have taken a beating at the start of the year, chances are that it will continue to outperform in the next 2-3 years.

Below is the verbatim transcript of Amit Rathi's interview with Reema Tendulkar & Nigel D'Souza on CNBC-TV18.

Reema: Shaky start to 2016, how are you penciling in the rest of the year and are you getting the sense that we are closer to the bottom or do you believe there is more downside in store?

A: The year has been off to a bad start. When we go back in history and look at corrections like this, typically you will see markets falling 40-50 percent in dollar terms, in the emerging market space, we are down about 20 percent. Possibly, we could be down 10 percent but what I tell clients is you need to be long-term greedy in this market, you don’t know how much pain is left, maybe it is 10-15 percent but I guess most of it should play out in the next three-six months beyond which market should start to pick up.

However, I think we need to recognize that India is a dual-track economy now. If you will have global commodity sectors, which will stay impacted, then you have also got the traditional rent-seeking companies and sectors are also crying foul. However, on the other side, you have got lot of themes that are going go play out so you have got the urban consumption theme, you have got infrastructure spending. So I think if you focus on the right side of the market, there is money to be made and if you are long-term greedy and you put money in it while these markets are correcting, it is probably a great opportunity.

Mangalam: I was reading through your view earlier and you did believe that the midcap outperformance is likely to continue into 2016 as well but at the start of 2016, we have seen the butchering of midcaps, so what is your view on the midcaps space?

A: Midcaps have taken a beating a little in the early part of this year but I am still optimistic. I think you will still find lot of companies there that are immune from what is happening globally. One needs to separate what is happening in terms of stocks and companies that are over-owned by foreign investors and there is a lot of fore-selling.

One has to first focus more on sectors rather than marketcaps but generally speaking we are seeing better growth rates in the midcap and smallcap space. So that is what is leading to conviction that in the next two-three years that sector will continue to outperform.

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First Published on Jan 15, 2016 03:28 pm
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