'Equities charm is here to stay'

What is your outlook on equity markets and are there concerns which can halt the upward move over the next 12-18 months?

Its is extremely difficult to take a directional call on where the markets are headed. The Benchmark BSE Sensex does not reflect the entire market and I believe there are still enough stocks that will continue to create wealth for the investors. Specific sector, specific companies will continue to do well and will outperform the benchmark indices time and again.

What kind of returns investors should expect from equities market over the medium term period of say 12-18 month?

Returns from the equities market will be more or less in line with the growth of corporate India. One should expect a realistic return of 15-17 per cent over a 3-5 year horizon. External factors such as hardening interest rates, slower foreign inflows and disappointing quarterly results will have a short-term impact on the markets.

But India's growth story is still intact and our economy is expected to grow faster than other Asian economies including China. So stock prices will get reflected as and when the companies grow in stature and become globally competitive.

Global equity markets have shown signs of slowing down? Your comments.

We have seen money moving from equities to fixed income in the backdrop of hike in US interest rates. However, this a temporary phenomenon and equity as a asset class will continue to attract large sums as it can fetch decent returns over a medium to long term horizon.

The foreign institutional investors (FIIs) inflow has slowed down resulting in a sharp fall in indices? Will the FIIs inflow be as strong at it was last year?

The FIIs have withdrawn from equities across the globe. India is expected to be among the fastest growing economies in the world and will grow at around 7-8 per cent. I don't think, with such a growth prospect, any serious investor can ignore Indian markets for long.

With 100 per cent FDI allowed in Indian real estate, a lot of foreign investors are expected to invest into real estate funds recently launched by domestic funds? Is that a threat for inflows into equity market?

I don't think real estate funds will in anyway divert flow from equities to real estate. The investments in real estate is a different ball game as the funds are ill-liquid and the gestation period is more than 3-4 years.