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Foreign investors which turned net sellers in the October-December quarter largely on account of concerns about a possible rate hike by the US Federal Reserve, as well as demonetisation, will soon shift back to India, Jonathan Schiessl of Ashburton said in an interview with CNBC-TV18.
Indian market is no longer cheap after 10 per cent rally so far in the year 2017 and about 17 per cent in the current financial year. But, elevated valuation concerns are unlikely to dampen investor interest, assures Schiessl.
He further added that if we look at India from the perspective of dollar returns, India has been a massive outperformer backed by strength in the rupee.
Jonathan Schiessl who is the fund manager of the Ashburton India Equity Opportunities Fund gave a return of over 90 percent since its launch in 2012.
Ashburton India Equity Opportunities Fund is a USD-denominated fund offering investors access to one of the largest, fastest-growing and most exciting economies in the world.
The top ten holdings of the Ashburton India Equity Opportunities Fund include names like HDFC, Infosys, HCL Technologies, Tube Investments, Arvind, Tata Motors, Power Grid, Godrej Industries, Capital First, and Sun Pharma.
Here are excerpts of various stocks from his interview with CNBC-TV18:
Infosys, HCL Tech: Ashburton India Equity Opportunities Fund increased their weightage in the IT sector recently largely because these companies have better cash management, demand environment is improving for most of them and most of the worries on account Trump policies are priced in.
HDFC: HDFC has been one of the most consistent performers in the Indian market and we are comfortable to hold HDFC in our portfolio, said Schiessl. From a valuation perspective, HDFC is not cheap but from opportunity perspective, it has tremendous potential.
It is a great long and medium term structural story because it has scaled to grasp the opportunity as India transitions from informal economy to formal economy.
Capital First: The recent entrant in the housing finance segment is Capital First and is more diverse play. “We have been adding Capital First in the midst of demonetisation, but we should have been a little bit more aggressive,” said Schiessl.
Endurance Technologies: Endurance is an interesting play and a unique stock from an Indian perspective and we continue to hold the stock, he said.
KKR Mills: We just included KKR Mills in our portfolio, although we hold a small position right now. “There are so many well-managed companies in the mid and smallcap range which is looking attractive,” said Schiessl.
D-Mart: D-Mart looked interesting when the IPO came out. We have been reviewing the retail sector for a while but haven’t pulled the trigger yet, said Schiessl. “The stock was massively oversubscribed and raced to eye-watering valuations. If it corrects significantly, we would be looking at adding the stock,” he said.
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