Market return in 2022 could be in mid-teens, says Samir Arora

Q1: Liquidity was king for markets in the past 18-20 months. With this drying up, what all factors will drive the markets from here on?
Ans:
>> Liquidity not big thing for the markets
>> India inflow till November 2021: $6bn; EMs saw outflow of $38bn during this period
>> India not a beneficiary of equity-linked ‘easy money’ flow
 
 
Q2: So even if the flows were to the tune of $6 billion in India, why is the possibility of them slowing down creating a flutter?
Ans:
>> Will not matter much in the end
>> Market correction if linked only to liquidity is not a big deal
>> Correction is driven by other factors as well
>> Interest rates need to be watched
 
 
Q3: Can foreign funds look at India as an alternate destination given the developments in China?
Ans:
>>In the past five years, India getting money disproportionate to its weight in the global EM index
>>Other EMs such as Korea and Taiwan saw outflows at a time when flows were chasing India
>>Preference for India among FIIs will not change
>>India is a beneficiary even in other EM outflows
 
 
Q4: If the markets are to go up from here over the next 6 - 12 months, where do you see leadership emerge from?
Ans:
>> We like financials, tech, pharma and speciality chemicals
>> Middle class, underpenetrated consumer stories
 

Q5: Growth, value or momentum – what should investors chase in 2022? 
Ans:           
>> Choose a mix of growth and value
>> Valuation has to be acceptable with achievable growth
 
 
Q6: Should investors temper their market expectation in 2022?
Ans:
>> Long-term market return has been 15.8% per annum
>> Market return in 2022 could be in mid-teens
 

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