Crime Today News
The markets have been on a massive roller-coaster ride for a few months now, largely due to global uncertainties. And just as they rejoice over positive news, they spiral downward “when news of inexplicable and uncertainties take prominence,” explains Akshay Gupta, Managing Director & CEO of Prime Research & Advisory. According to him, what’s noteworthy is the fact that India’s economic growth and the performance of the corporates in the country have been strong.
Edited excerpts:
How do you view the current market turbulence, especially in Trump’s new regime?
In our opinion, this is temporary. Any uncertainty stokes fear among all types of investor classes. Either a ‘wait and watch’ or a ‘sell now think later’ mode kicks in, leading to an irrational decline in the markets. Just as there is an irrational exuberance when positive news flows, it’s the other way when news of inexplicables and uncertainties takes prominence. Ultimately, market movement realigns to chase country growth and corporate performance, neither of which has significantly altered for India in the last six months of correction.
Do you see the worst is over, given that there is some stability at lower levels? Or is the market still in danger zone?
There could be a further price correction (5-10 per cent), but followed by a time correction, that can be prolonged as investors wait for a few months to decipher the ‘new world order’.
What would be the impact of the IndusInd Bank saga? Do you think that it will snowball into a bigger crisis for the whole market?
These are individual one-off cases of omission and misgovernance. They will be swiftly contained by regulator (RBI). The good news is that the promoters are solidly behind the bank and as per preliminary reports, the capital adequacy and liquidity numbers of IndusInd bank seem to be reasonable.
Which are the sectors that are undervalued in the current market cycle?
Some of the sectors that surged significantly in the bull run, such as Defence, PSUs, Infrastructure and Manufacturing have corrected below fundamental valuation metrics and these sectors will most likely see a higher bounce-back when the dust settles.
How do you see the IPO markets to be this year?
IPO activities will be subdued compared to the last two years. Some big and well-known companies’ IPOs will garner money, but several smaller companies will face resistance in triggering investor interest. The ‘herd mentality’ is abating and eventually for the long term, that’s great news.
Do you have any fundraising plans?
Not in this financial year.
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