Nitesh Shah is the CEO-Wealth at Elara Securities India.
Nitesh Shah, CEO-Wealth at Elara Securities India said India is trading at a premium compared to many other ASEAN countries. But with the stability in the political regime, and progressive central policies, such a premium is justified.
When asked about the sectors they would prefer investing in, he said, we prefer to buy businesses that are globally competitive with the best governance and best financials. Elara sees such opportunities across sectors like specialty chemicals, auto ancillaries, capital goods, consumer discretionary, specialty pharma, and private sector banking and finance, Shah said in an e-mail interview with Moneycontrol’s Sunil Shankar Matkar.
Edited excerpts:
China is facing lockdown now due to rising Covid cases. Do you think Covid is still going to be a risk for the equity market?
Certainly, such lockdown/unlock down by China impacts the supply chain and hence, creates uncertainty for the corporate world. However, it benefits India to a certain extent as global CEOs are certainly frustrated with such ad hoc policy of China. This further drives global CEOs to reduce their dependency on China and look at India as an alternate source.
From equity market perspective, we do not see Covid is a major risk as the world has learnt to live with it.
FIIs have been net sellers for the seventh consecutive month now. What are the major reasons according to you?
The major reason for FII selling is tightening by US Fed resulting in leveraged funds selling from equity as an asset class. This is a global phenomenon and not specific to India. Going forward, we believe India will continue to attract both FDI and FII money as the economy is much more resilient.
US Fed chair has already indicated a 50 bps rate hike in May’s policy. Your thoughts…
Surely, US Fed is behind the curve and hence, it is forced to hike the interest rates to tame inflation. However, Fed is aware that it is the distortion in supply chain which is contributing to the surge in inflation. Hence, we expect them to be mindful and rationale while doing such rate hikes.
Do you think India is trading at a premium to its peers? Also, considering the macro issues, do you expect any kind of major price correction in coming days?
India is trading at a premium compared to many other ASEAN countries. But with the stability in the political regime, and progressive central policies, India is expected to become the fastest-growing economy in the world. Hence, such a premium is justified.
Do you think the commodities cycle, especially the metal space, is close to peaking now?
It is extremely difficult to predict commodity cycles. Having said that, price is a slave of demand and supply. Presently, due to geopolitical conditions, supply is constrained, hence resulting in an artificial shortage.
Given several issues globally, what do you want to pick for your portfolio at this point of time?
We prefer to buy businesses that are globally competitive with the best governance and best financials. We see such opportunities across sectors like specialty chemicals, auto ancillaries, capital goods, consumer discretionary, specialty pharma, and private sector banking and finance.
What is your investment mantra for new-age investors?
The democratization of the stock market by new trading platforms has led to a significant rise in new-age investors. Creation of wealth requires long term approach. They are strongly advised to educate themselves and have a hands-off approach – seek professional help, while dealing with their money.
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