Conversations with Mr. Arun Thukral, MD & CEO - Axis Securities
Mar 31, 2016
Good days for equity markets were seen in the month of March 2016. Taking into account the slowing global growth, the Fed Chair has guided gradual rate hikes in US and the ECB in its last meet has reduced the deposit rates. Both these developments have been music to Emerging Markets, India included. Low inflation in Japan hints at possibility of additional easing along with the current negative interest rate regime.
Bottomline: Free flow of easy money globally which eventually ends up in equity, commodity markets.
Nevertheless, the headwinds still exist in form of the impending European event- the referendum in June’16 for Britain to decide to stay or exit EU, concerns over European Banks, China’s growth, outcome of US elections etc. These events, being extraneous to the Indian economy, are expected to have a transitory impact on the market movements in India but not the course, hence the kneejerk reaction can be utilized to add to the portfolio.
The Budget session of Parliament has been fruitful, so far. Adhaar bill, Real Estate Bill & National Waterways bill have been cleared and our awaiting Presidential approval. GST Bill may get pushed to monsoon session given that the ruling party would be in a better position to get it cleared as the strength of ruling party rises in the upper house by July’16. India is one of the very few pockets of investments across the globe on back of soft commodity, crude prices, revival in consumption spends & demographic dividend.
We hence re-iterate utilizing the bouts of corrections in markets to accumulate quality stocks with growth potential & proven management for an investment outlook of 12-18 months. Companies with limited debt, credible management, high RoEs and favorable valuation should be added to one’s portfolio.
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