Alok Singh of Bank of India Mutual Fund
“The corporate earnings were broadly in line with market expectations. While most of the companies delivered revenue growth but margins continue to remain under pressure,” Alok Singh, Chief Investment Officer at Bank of India Mutual Fund says in an interview with Moneycontrol.
In the larger sectors, the banking has declared good results and the outlook for the next quarter may also remain positive, said Singh, who has over 20 years of experience in fund management.
He feels the global markets are working with a high probability of recession in the near term. In case this recessionary fear gets abated then the market may witness enthusiasm coming back, he said.
Do you think the SIP inflow will increase significantly going ahead?
The financialisation of savings is a function of economic prosperity in the economy. As India’s GDP will move towards $ 5 trillion from the current $ 3 trillion in coming years, the country’s per capita GDP may also increase resulting in higher savings. In turn, the SIP inflow may also rise.
Do you think the valuation of the consumer discretionary basket is still elevated considering the December 2022 quarter earnings?
The results for the December quarter were not very encouraging. This may have an impact on the valuations in the near term especially if the December trend continues in the March quarter of FY23.
Any thoughts on the corporate earnings announced so far? Have you seen any surprise as well as disappointed factors after Q3FY23 earnings?
The corporate earnings were broadly in line with market expectations. While most of the companies delivered revenue growth their margins continue to remain under pressure. In the larger sectors, banking has declared good results and the outlook for the next quarter may also remain positive. Other than the banking sector, all other major sectoral results just meet the expectations.
Do you think it is not the right time to pick technology stocks considering the uncertain global scenario?
The market expects growth to moderate for the IT sector in the coming quarters mainly because of global recessionary fears. In such an environment, we would like to maintain our unweight stance on IT.
Do you see any possibility of a sharp run-up in the equity markets towards the second half of 2023?
The global markets are working with a high probability of recession in the near term. In case these recessionary fears get abated then the market may witness enthusiasm coming back.
What is your strategy behind Multi-Cap Fund?
The Multi-Cap Fund is required to invest 25 percent each in large cap, midcap and small cap; the balance 25 percent can be invested in any of the market cap categories. In our fund, we want to dynamically manage this 25 percent, because not all market caps behave similarly. Therefore, while the base allocation of 25 percent in each market cap will provide stability to the fund, the 25 percent dynamic allocation will take advantage of relative volatility among the three market cap category.
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