BOB Capital Markets is positive on domestic sectors including consumption theme, says Sanjiv Saraff, Joint Managing Director. “These are good times for a patient investor who has a longer Investment Horizon.”
With more than 25 years of experience in financial services, Saraff says BOB remains constructive on the domestic market but global overhangs like China slowdown, US rate hikes and potential slowdown in European Union may keep the upside in check.
New age tech companies have seen a significant correction since after the listing and have not seen IPO price levels. Considering the kind of environment, do you still expect new-age tech companies IPO in the coming months? Can you name companies that are in the pipeline for IPOs?
Yes, new age tech companies, especially those funded by private capital for early stage growth, will continue to tap IPOs for exits. Given the volatility in the markets, the launches could be delayed. Valuation expectations by these entities have also moderated on account of the current environment.
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Also what should investors do with new age tech companies that are already listed in the market including Paytm, Zomato, Policybazaar as they are still loss making?
Losses in fintech or new age stocks is not unique to India. That is the nature of such businesses and requires them to continue to invest in the growth phase. The fact that both institutional & retail investors continue to repose faith in such stocks convey the trend that investors back the new age business models with strong management teams.
Do you think the market is looking overbought now especially after seeing more than 17 percent run up in last two months, or the recovery is expected to continue in coming months that can take the markets to new highs?
We remain constructive on the domestic market but global overhangs like China slowdown, US rate hikes and potential slowdown in European Union may keep the upside in check.
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Generally the market starts discounting things well in advance. So do you think all the negatives are fully priced in? Can you explain the only negative factor that is yet to be priced in?
Future scenarios can never be fully discounted. If the question is : Is market discounting possible outcomes from negative events, answer is yes, to some extent. If the question is: Is market discounting the worst case scenario, the answer is a big No.
Considering the change in market sentiment, have you spotted any themes that can generate enormous wealth in next couple of years despite any negative news?
We are positive on our domestic sectors. These are good times for a patient investor who has a longer Investment Horizon. We are positive on the consumption theme.
Do you think the Indian economy is ready to deliver 7 percent growth every year in the current decade, despite any intermittent obstacles?
India has been clocking 7 percent plus rates in the past and there is no reason why our country cannot continue to deliver such a growth rate over a longer period. For the decade, an average of 7 percent per annum looks achievable subject to consumption & private investments firing consistently.
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