Yesha Shah is the Head of equity research at Samco Securities.
Happy Women’s Day! “If women are entering stock markets at this stage, then they shouldn’t be lured away by the returns markets have given after the pandemic and use that as a basis for their return expectations. Also don’t shy away from some losses as equity investing is all about ups and downs and never a straight line,” says Yesha Shah, Head – Equity Research, Samco Securities, in an interview to Moneycontrol.
Being a chartered accountant and a commerce graduate, Shah, who has in-depth knowledge of financial statement analysis, says staying away from FOMO (fear of missing out) and investing in reading and learning should be the mantra to follow.
Happy Women’s Day! What should a woman do if she wants be a part of equity markets?
Wishing all female readers of Moneycontrol a very Happy Women’s Day!
Women who are starting their investment journey should remember that investing in equity markets can seem quite daunting but it is not really rocket science. It’s their lack of confidence that acts as a deterrent. Essentially, women must empower themselves with at least basic knowledge of equity markets so that they feel confident. If women are entering stock markets at this stage, then they shouldn’t be lured away by the returns markets have given after the pandemic and use that as a basis for their return expectations. Over the long run, equity investing has indeed compounded wealth for many. So focus must be on the longer term instead of generating quick returns. Also don’t shy away from some losses as equity investing is all about ups and downs and never a straight line.
What are the portfolio tricks that you want to suggest on International Women’s Day?
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The type of stocks a woman should own will primarily depend on her investing objective and risk profile. If she needs regular income flow, then dividends stocks can be looked at. If she has a decent risk appetite and aims to generate superior returns over longer term, investment in growth stocks makes sense. However, growth stocks also need to be deeply studied to figure out possible growth areas. If she is genuinely long term oriented and won’t monitor her portfolio frequently, investing in tried and tested blue chip stocks can be an option. If time is a constraint for her, then she can seek assistance from financial advisors. All said and done, I would strongly urge women to not invest solely based on so called market gurus’ tips. Staying away from FOMO and investing in reading and learning should be the mantra to follow.
Do you expect women participation in equity markets to be doubled in the next couple of hours?
Absolutely! Currently, the participation of women in Indian stock market is less than the global average even though India is the world’s sixth largest stock market. The number of working women in India is only on the rise. Further, the trend of women wanting to be more in control of their finances and eventually be financially independent will encourage them to take the leap of faith to invest in equities and ditch traditional investment products. Hopefully, a few years down the line, amidst male-dominated marquee investor’s list, it won’t be surprising to see more female superstars!
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Considering the current trend in the market after a steep fall on February 24, is the risk led by the Ukraine-Russia war priced in?
Currently, news flow is fluid, uncertainty has heightened and the movements we are seeing in the market are very news driven. As the Russia-Ukraine situation continues to evolve, markets will keep reacting to new developments. Market participants also continue to analyse the spillover effects of this geo-political crisis as they become more apparent. The longer the war continues and should the situation get out of control, the consequences can be very detrimental. On a technical front too, Nifty continues to be hammered down on every rise. So though the downside from here may be limited if there are no adverse developments, markets may continue to remain choppy and range-bound.
IT stocks have seen a lot of re-rating last year given growth potential. But in the last three months, they have seen a massive correction. Do you expect some more corrections or is it a good entry point now?
The growth outlook for IT sector continues to remain robust with underlying demand sustaining. Supply side pressures are also expected to ease in the coming quarters. The rupee depreciation to a record low amid the geo-political crisis also adds to tailwinds in the short term. In the past couple of trading sessions, the IT index seems to be stabilising and certain IT stocks have witnessed some buying interest. Having said this, the valuations even after this correction seem to be slightly stretched. So investors are advised to wait for some more correction before they lap up these stocks again.
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Now Indian retail investors can buy US stocks including Apple, Google, and Amazon through the NSE IFSC platform in GIFT City. Should retail investors utilise this option and what are the benefits that investors can get by investing through this platform?
The major benefit of this platform is that this increases affordability of US stocks as investors can trade even in fractional quantities through depository receipts. Also investors will be eligible to the benefits of all the corporate actions pertaining to these stocks. Investing in international stocks not only offers diversification benefits but also enables access to growth opportunities and innovations not present locally. Recognising this fact, there is an increased affinity among Indian investors to invest in US stocks and this can also be gauged by the traction mutual funds which also invest in global stocks were witnessing. While this platform is at a nascent stage, I believe this can certainly make investing in US stocks more accessible and frequent.
Why are the Indian equity markets not reacting significantly to the oil price shock? What are the supportive factors that are offsetting the impact of oil price rise?
I believe that currently our markets are viewing the flareup in crude as transitory. Moreover, companies which will be negatively impacted due to higher crude prices are already taking a beating. If elevated crude prices were to sustain for a longer duration, then this may pose threats for the Indian economy. As our country is a key importer of crude and its derivatives, this may lead to upside risks in inflation and can trickle down to higher current account deficit and interest rates. In fact, it also increases risks of a stagflation, which if materialised will be challenging to deal with. Equity as well as bond markets will definitely react depending on how the situation unfolds.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
