Alok Singh of Bank of India Mutual Fund
“Corporate earnings were broadly in line with market expectations. While most companies delivered revenue growth, margins continue to remain under pressure,” said Alok Singh, Chief Investment Officer at Bank of India Mutual Fund, in an interview with Moneycontrol.
Among larger sectors, banking has declared good results and the outlook for the next quarter may also remain positive, said Singh, who has over 20 years’ experience in fund management.
The CIO feels global markets are working with the high probability of a recession in the near term. In case these recessionary fears abate, the market may witness enthusiasm coming back, he said.
Edited excerpts:
Do you think SIP inflows will increase significantly?
The financialisation of savings is a function of economic prosperity. As India’s GDP moves towards $ 5 trillion from the current $ 3 trillion, India’s per capita GDP may also increase, resulting in higher savings. In turn, SIP inflows 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 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?
The corporate earnings were broadly in line with market expectations. While most companies delivered revenue growth, 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 banking, all other major sectoral results just met expectations.
Is this a bad 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 the possibility of a sharp run-up in the equity markets in the second half of 2023?
Global markets are working with the high probability of a recession in the near term. In case these recessionary fears abate, then the market may witness enthusiasm coming back.
What is the strategy behind your Multi-Cap Fund?
The Multi-Cap Fund is required to invest 25 percent each in large-cap, mid-cap and small-cap stocks; the balance 25 percent can be invested in any market cap category. In our fund, we want to dynamically manage this 25 percent, because not all market caps behave in a similar manner. 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 categories.
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