Sharmila picks ICICI, BHEL, Godrej Industries

The year gone by has seen its share of ups and downs and between Diwali-to-Diwali, the Nifty has seen a rise of over 9 percent. It is a good sign and the star performer has been the traditional defensive space. The FMCG index itself has registered a growth of over 40 percent with the new bastion of media stocks seeing an upsurge of nearly 30 percent.

One wouldn't be too disappointed if you have invested in either the pharma or the banking space. Both spaces have recorded upmoves of 20 percent a piece. It is a similar story for the auto index. However, those who put their money in IT might have had a bit of a tough year. Metal and infra, both didn't favour with investors. So far this year, investor's favourites ITC and HDFC Bank are to pole the position. The other big private sector bank ICICI Bank also rewarded investors. Although, long-time favourites Reliance Industries and Infosys continued on a bit of a downward spiral. Also read: Market lost in negative global cues, PN Vijay bets on Bata On CNBC-TV18's special show 'The Informed Investors', Sharmila Joshi, of sharmilajoshi.com picks up the best stocks for investors. Below is the edited transcript of her interview Q: What are you advising your clients now? Are they looking enthusiastic to you about investing in the markets and perhaps being long in this market? A: I think as going ahead, the possibilities are very exciting. We are going to be stepping into a new phase. A lot will happen next year. From Diwali-to-Diwali one is going to see a lot of changes on the domestic front. Hopefully, we will see interest rate cycles peak out. Maybe, in January we’ll start seeing some interest rate cut coming in. We will have the last budget then we would be leading upto the general elections. We will have state elections in the interim. So, a lot of things will change whether it is politically or the policy push. Things will become a lot less, just not very unclear. That certainty will come in. Also, I think on the international front, one does have a new president now re-elected rather for four more years. So, he is going to give his policies a push. Plus the Europe situation will sort itself out. In the coming year, things are going to look very different and hopefully for the better. That should mean good things for equities as well. I think the bad part is that we are not seeing that enthusiasm at least from the retail clients yet. Even among the sectors that have done well, one would have to be invested in particular stocks to really make the money. Let’s see how that pans out. Hopefully, the retail will get onto the band wagon fast enough. I don’t think that one can really call it a bull market, unless there is significant participation from retail client. That is the missing wit and hopefully that will come into place in this coming year. Q: Lot of experts have been very bullish on media stocks. So far none of these companies have really performed well. What do you all think is it a good time to buy into the media sector as of now? A: It is interesting, what they are trying to say is that they have not made money so far. That’s precisely the point when somebody like Mr. Jhunjhunwala or Mr. Damani picks a sector, they are trying to look into the future and see what could be the possibilities of companies or sectors going ahead. Also, what could find a favour, not just in terms of doing well themselves, but also a favour with investors. The logic basically is that since now you have an economy that has expanded to an X-size and people have met their basic needs, then the fourth missing piece is always going to be entertainment. That’s going to be, what people will spend their money on. People do have that surplus money to spend. They look at a lot of these stocks and then they look at where they are positioned and that’s the basis of the recommendation. Even out of that space, you will have to divide it. Don’t just look at media but who is into what. Whether they are into broadcasting, movie business or cable players like Hathway or a Dish TV, which are likely to benefit from the digitisation which has just started. One phase is over, second will come up on 31st March. One has to look at it like that and I think then within that you have to find your picks. There is a lot of upside within each of the segments. One has to find stocks in which you can stay invested in. I think it is great idea. One should definitely look at it. Perhaps, I think the cable companies have already given a decent return in this last year. There was a built up to the October event. But there is a lot more awaiting to unfold. _PAGEBREAK_ Q: If one invests Rs 5000 each month through SIP in Reliance Gold ETF, will I have the flexibility to invest variable amounts each month?  Will the total invested get any rebate under Section 80 C? Which is the best gold ETF to invest in? A: If you have fixed an amount for an SIP, then I don’t think that you can really vary it per month. The best ETF is a little difficult to tell. They are also talking of golds of different varieties. So, I think that’s the other think that you need to study before you pick your ETF. They are all good. I don’t think that there is any you can single out and say that is bad. Q: Gold ETF or a gold fund? A: Gold ETF. Q: Would you advice investment in an ETF perhaps vis-à-vis a fund? A: If one is already doing an SIP. That’s the best approach to take in any case because of the way prices have been. So, I think one should continue with that and not really worry too much about which is the best in that sense. Q: PNB stock has fallen considerably since August 2010 and if one has purchased 500 shares of PNB at Rs 1100, should he continue holding onto it? A: It is a tough call. Largely because we have seen NPA concerns for PNB mount up in the interim two years. It has been a tough two years for a lot of PSU banks, given the fact that interest rates are where they are and there has really been no respite. A lot of the key core sectors in which these PSUs were invested in, are facing problem. However, the next year should see a lot of these problems sorted. I would say hold. If one has the ability to stay invested for another year, give it a shot. For me this is not the price to sell the. This is not a good price to sell PNB, wait for the interest rates to come in and wait for a couple of quarters. See how they really clean up their act and then take a call. Q: What is the basis on which circuit filters are fixed for certain scripts? How can investors find this information? A: The information is available on the NSE website. The rules are fairly simple. One should follow an outline. It is only when you notice that there is untoward activity or there is too much volatility in a stock then the Circuit Filters are bought lower and they are made 5 percent. Otherwise on an average they are 10 percent. For F&O stocks they are more and you can relax the limit. If it hits the circuit then one has to take that breather. They can be allowed to be extended for the day. Mostly, if the stock is too volatile or if it has shown some suspicious trading then they put it in that trade-for-trade or they reduce the circuit limit to 5 percent. Q: Any stock tips or investment ideas for 2013? A: Since we spoke of banks, I think within the private banking space you can look at ICICI Bank and Indusind Bank. I continue to like BHEL with the capital goods space. The interesting mid-cap stocks that I would recommend would be Tata Global Beverages and Godrej Industries.