Mkt may touch previous lows of sub-3800 levels: Kotak Secs
Published on Friday, October 3rd, 2008 at 6:24 PMAuthor: admin (5507 Articles)
Kunj Bansal, Senior Vice-President PMS at Kotak Securities said there is a possibility that the markets may touch the previous lows of sub-3800 levels, and that will depend on how the withdrawal from the equity market pans out.
Here is a verbatim transcript of the exclusive interview with Kunj Bansal
Q: Are we going back to those lows of sub-3,800?
A: It is quite possible. It will largely depend on how the money withdrawal from the equity market pans out.
Q: What would you really advice to investors? Since you advice PMS, would it make sense to stay on in debt and non-equity instruments and with a feeling that you will have plenty of time to pick up equity?
A: For the short-term that would certainly be the logical choice but two very major positive events have happened for India macro-economically. One, the oil price has corrected almost 30–35% and looks like sustaining here. In fact, now we have also started talks that it could start coming down even further. Secondly, commodity prices have cooled off sharply; India is one of the major consumers of all ferrous and nonferrous metals. So, macro economically speaking, these two things are positive.
Also, the slowdown that is expected in the quarterly numbers is largely built in the prices. What continues to remain an overhang on the market is, of course, the Foreign Institutional Investment (FII) flows, and of course it depends on how the slowdown actually pans out.
So, one will have to take a balance between these two positions. As of now, FII flows, I think needs a change. I have been cautious on the market for quite some time. If that FII flow overhang is not there, maybe, we could be looking to have some buying opportunities at least.
Q: What is your view on ICICI Bank? It has been the weak link for the markets despite its recent relief rally; it is impacting the index by 50-points, just one stock, what is your view on this one?
A: First, the stock had a high ownership of FIIs. Second, it is a very liquid stock – so anybody wanting to withdraw money will find it a natural catch to start selling the shares. Three, of course, there are some issues with the banking sector as a whole. There were some individual issues with the ICICI Bank which the management has clarified. There are other issues in terms of slower growth such as their own intentional slowdown in terms of auto loans, personal loans, smaller loan segments, etc. and increasing Non-Performing Assets (NPAs) that will be clearer in the coming quarter results.
Q: Very quickly at what level would you start buying towards the 3,790? Would you be a buyer, and secondly, where are you looking for bargains––which sectors or stocks?
A: We have seen and possibly we will continue to see pressure in sectors such as IT, a recent pressure in sectors like the commodities, metals, nonferrous. We continue to see pressures in real estate, infrastructure and banking. So, those would possibly still be a kind of a no-no where we have been buying or we were to buy. I would be a buyer in two-wheelers whose stocks have shown quite a positive trend. Marginally, cement would be one area and then of course a whole lot of opportunities in the midcap sector which still offer good buying opportunities.
Q: Would you buy Unitech of DLF at these levels?
A: Not right now.
SOURCE : MoneyControl
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