Time to go shopping! Deploy cash lying on the sidelines: Quantum

Investors should not panic in this sell-off, in fact, Sanjay Dutt, director of Quantum Securities, says all those who have cash on the sidelines should start deploying it He says, the market fall is just on the back of global events.

He advises investors to buy largecaps atleast today and tomorrow as they have been totally ignored and there is froth in midcaps. According to him, investing in largecaps makes more tactical sense at this point. Once there is some good bounce in the next few weeks, maybe then it will make sense to shift to midcaps, he adds.Below is the transcript of Sanjay Dutt’s interview with Anuj Singhal and Sonia Shenoy on CNBC-TV18.Sonia: Not a very good afternoon for the bulls, but what is the advice that you would have for retail investors now?A: The ones who are invested need to just do a conviction check on whatever they are holding. If they are comfortable and the reasons for which they bought the stocks continue to remain the same and not change, they should continue to hold them. I do not see any reason to panic. And the ones who have got cash on the sidelines should actually start to deploy their cash because this kind of an opportunity comes in a few months or once or twice in a year in the India markets which is primarily because of global events. And this is the time to get your shopping basket in your hands.Anuj: Would you have the blue chips in that shopping basket or would you have the midcaps because the preferred theme all through last year has been midcaps?A: At least today, and another day, tomorrow, I would prefer the largecaps, because they have been totally ignored and if there has been a bit of a build up in the midcaps in the last few months, everyone has loaded on to them irrespective of the names, irrespective of the credibility and the name check that people do. So, I would be more comfortable on largecaps at this point.But as probably one sees a reasonably good bounce in the next few weeks and probably shift into select midcaps, but at this point of time, definitely from a tactical perspective, I would want to be into largecaps and again, take midcaps because people will have to sweat out on the midcaps for a while. Sonia: So, you are more comfortable in largecaps. I reckon you would be more comfortable with a lot of the quality names now as well. So, let us talk about some of them, I was just mentioning how Axis Bank has gone from Rs 600 to Rs 400 before you know it in less than two months. Would you look at any of these cleaner private sector banks to buy into now?A: Absolutely, I think this is the time to look at the top-100 stocks and see the one which gives you comfort. Just do a quick balance sheet rundown and cash flow rundown and start deploying money. I am a lot about the fact that this is the time actually start buying in. Yes, we may see another 50-100 points downside on the Nifty but, we cannot always time the bottom or the top.Anuj: What about names like Tata Motors or for that matter Tata Steel, the metal names. What about the global plays, what do you do there? Do you say that uncertainty is there, so let us stay out or do you say that maybe it is the best risk reward right now that you could have at your disposal and go out and buy?A: The global plays are more to be played by professionals who have deep knowledge of the cross play of various factors and pricing them, in the sense that commodity prices, steel prices directly impacting the likes of Cisco and obviously telcos have a different equation in terms of its demand and in terms of input prices, etc. whichever would require commodities. So, those should be led to professionals to play. Those will be a little difficult to gauge in terms of net profits and losses (P&L) but, the one big theme obviously, like Sonia mentioned Axis Bank and there are many others, those plain vanilla kind of simple India specific themes to play, those can definitely be bought by retail investors.So, the ones which have global cross-currents to deal with in terms of exchange commodity prices etc. those I would advise retail investors to stay away from because it will be very difficult to time it. Sonia: That is about individual stocks, but coming back to that point you made earlier that this is a good time to be deploying cash. What makes you say that? Do you not think that in the course of the next three to six months, one can get better levels because at this point, at this stage, there does not seem to be any great positive triggers that one can look forward to?A: What I feel is that the most anticipated event that was to pan out from China in terms of its currency has kind of played out today or will finish playing out in a day or two or whether it will be maximum three to four days. In addition to that, commodity prices are now coming to levels where a large number of producers across the world would shut down plants more than anything else. You have seen the price of gold, the price of steel, you have seen price of copper.Sonia: That point is taken, I mean that global peace I understand that maybe the worst could be over, but locally also there is nothing to look forward to, earnings season is expected to be week, nobody is talking about high expectations from the Budget. Historically, the Budget has not given any returns to the market. So, what makes you believe that this could be the worst for our markets?A: What you have seen in the last 500 points have been primarily because of global issues, it has not got to do anything with local issues if I am correct. Or maybe I have got it wrong somewhere. But what we have seen in the last 300-400 points in the Nifty and the panic that we have seen in the last few days is primarily because of global events and nothing new that I have seen happening within India. In fact whatever has happened within India is happening with a positive because government I continuing to do what it has to do.Yes, we can always debate on what kind of reforms and what more needs to be done and also I do not think life begins and ends with GST, there are so many other things that need to be done and there are things being done by the government. So, I am reasonably convinced that the reform process, the government is initiated, forget our obsession with GST, but all other things are happening slowly and the government is really, has taken stock of situation and is doing things. And you can see them all panning out. Maybe we may not be happy with the pace, maybe it should be faster, but Budget is just about not even probably 30 or 40 days in the way, so that would be a good figure.