Neelkanth Mishra, Head of Equity Strategy India, Credit Suisse
Nov 11, 2016 | Source: CNBC TV 18
On Donald Trump’s victory: Donald Trump’s victory has led to external readjustments in countries like Brazil and Indonesia. The rise in US yields can have an impact on the local interest rates starting to move up . Other than oil, every other commodity seems to be holding up.
Fed rate hike: He expects the US Fed to raise rates in December.
On metals: One can assume financial involvement in metals can be driving prices up. But you can’t speculate on iron ore. Thermal coal prices, coking coal are hard. In metals like zinc, there is a clear shortage that people are starting to see. In Aluminium a lot of the cost is in power. There is a physical demand, but how much is restocking or steady demand we will find out soon
On Government decision to ban old 500 & 100 rupee notes: Following the government’s move to ban old Rs 500 and Rs 1000 notes, a few sectors will be seeing some pain. There will be sectors where there will be short-term but intense impact at least in the case of non-perishables. There will be sectors where demand destruction could be permanent, he said. In many microfinance institutions (MFIs) the lending behaviour was starting to get risky and people were jostling for market share. Once in systems like these you see a temporary slowdown. For many MFIs and non-banking finance companies (NBFCs) the concerns can be longer-lasting. After the effect of demonetisation subsides, then GST disruption will start to kick in, he said, adding that these radical reforms will cause some short-term pain.
On GST: GST for first 12 months will be disruptive for the economy. The next twelve months will be one of time correction.