Q: Are the investors being given an opportunity of buying their favourite stocks cheaper amid this geopolitical crisis and they’re not realising it yet? Ans:
>Modest correction in India despite intense FII selling – only 9-10% down at the index-level
>Earlier instances of war and negativity brought intense correction
>Modest correction because of strong traction in domestic buying
>Investors looking to buy selective stocks where the correction has been sharp
Q: So, is it time to be greedy or fearful? Ans:
>When the world is fearful, it is time to be greedy
>Good time for stock pickers to buy; fence sitters should start buying
>Most negatives are priced-in
>Chinese, Taiwanese and Russian markets unattractive
>When FIIs return, their approach will be India-specific rather than emerging market basket
Q: But most frontline global indices are near bear territory. Even the Sensex and the Nifty are flirting with it. Isn’t there a genuine reason for the investors to worry and panic? Ans:
>Geopolitical crisis an unknown risk
>Escalation in war can create uncertainty
Q: Foreign investors have been selling relentlessly and the domestic institutions and retail investors have lent some support. At what point do you see them throw in the towel as well? Ans:
>For domestic investors, markets are becoming cheaper/ attractive
>Positives not priced in: Political stability after state polls; Covid under control
>Price of war has been heavy; market valuation is attractive now
>Expect FY23 to be much better for corporate earnings
Q: When do you see inflation concerns, fallout of geopolitical crisis start chipping away corporate earnings growth for FY23? Ans:
>High oil prices are the new normal
>Nothing much to worry if oil stabilises around $75 - $85 a barrel
>Companies will pass on higher oil prices to customers
Q: So, what’s on your shopping list in terms of sectors and stocks? Ans:
>Deepest cuts in stocks where oil prices have hit hard
>Cement, oil and manufacturing among worst hit
>Stock-specific approach needed
>Banks, IT are not impacted by geopolitical crisis
>Mid-cap IT stocks can provide 15 - 20% return
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