Ankur Maheshwari, CEO at Wealth Equirus, believes that India’s private investment cycle is set to recover after more than a decade due to government schemes, capital expenditure in sectors like cement and metals and digitisation.
“Accommodative monetary policy, global liquidity and lower interest rates will also support an investment revival,” says the seasoned consumer banking and wealth management professional.
For new-age and retail investors, he feels systematic investment plans continue to be a time-tested way for long-term wealth creation. “This trend is expected to grow with more and more new investors coming in the market and realising the true potential of long-term systematic and disciplined savings,” Maheshwari shares in an interview with Moneycontrol.
Excerpts from the interview:
Do you expect India’s economic growth to be higher than its global peers (developed and emerging) in the coming years?
We certainly believe that India shall demonstrate a better growth rate than the rest of the world in future. It is already the third-largest economy and contributor to the global economic growth, yet there is considerable untapped potential. With more than a sixth of the world’s population, (which is young and acts as a demographic dividend), India produces only 7 percent of the world’s output.
India has enjoyed a step-up in growth rates over the past few decades supported by reform efforts and the expansion of its aspirational, consumer class. Given the challenges of policymaking in such a large, diverse country with a federal structure of government, reforms will likely proceed incrementally. Making the most of India’s demographic advantages will come through labour market reforms, measures to improve education and skills and significantly improving women’s participation in the economy.
India’s economic progress will be subject to structural shifts and will be shaped by technological and environmental disruptions.
Do you think the Indian equity market is really in the middle of a strong bull run?
Equity, as an asset class, has delivered very strong returns over the last 18 months, specifically from March 2020, when the COVID Phase-I just started. Expectations around strong economic recovery and earnings cycle after the COVID impact has raised the expectations of overall economic growth of the country.
That said, the valuations for Indian equity indices are a bit stretched, more so in mid- and small-cap space. Hence, it won’t be a surprise if we see a pull back, from current market levels, which we believe is an important part for a healthy equity bull cycle.
What are the sectors that can boost your portfolio returns in the coming years?
We believe that India’s private investment cycle is set to recover after more than a decade due to government schemes, capital expenditure in sectors like cement and metals and digitisation. Accommodative monetary policy, global liquidity and lower interest rates will also support an investment revival.
Do you think the expected inflationary pressure, Fed tapering, increase in interest rates globally, and slow job creation could dampen market sentiment?
All these events do pose a material risk to the markets. However, the earnings growth on sales and volume have been robust for India Inc. So, while these events may have either a knee-jerk or a short-term impact on equity markets, over the long term, they shall tend to deliver returns as long as they remain fundamentally supported by earnings growth.
On this Diwali, what is your mantra for wealth creation and what is your suggestion for new-age investors? How investors can avoid wealth destroyers on this Diwali festival?
Investment strategy for a long-term investor remains guided by two fundamental pillars, irrespective of market levels: (1) Maintain your asset allocation; (2) Select fundamentally the right investment stocks / funds and not be swayed by either too much exuberance or excessive pessimism. For new age and retail investors, SIP continues to be a time-tested way for long-term wealth creation. This trend is expected to grow with more and more new investors coming in the market and realising true potential of long-term systematic and disciplined savings.
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