What is happening in the world? Some are talking about the Middle East, some are talking about China, some are talking about both.
Sameer Arora: We are not going to talk less about China than China or at least India because there are only two countries in the world to invest in and one is at the cost of the other. I was saying with everyone that even if China has done well, forget it at the expense of India for some time, maybe even a week, a month or two months, because nobody has only these two investments. Emerging market funds may also have 50% in non-China, non-India and therefore, enough money to take profits or minimize losses in the rest of the portfolio.
It can be done in many other markets. India is a secular story. China was and probably is a value trade on which one can be underweight, overweight and add up. But it was seen as if there was no other source of money, every market was up, India was down because China was doing well. It was a bit much, but thankfully that part is over. Now the market may focus on Iran and Israel or maybe talk about the US election. Every day a new event will happen and in the end it will not matter.
Markets were looking for a reason to correct and the trigger could be China or the Middle East; It could be anything in the world, but was this correction overdue?
Sameer Arora: correct It was a good connection, but not a mind-blowingly bad correction. So it’s okay. At worst, NAV was down 4%, but is now down 2% courtesy of yesterday. So ok, what’s the big deal now?
-
Stock trading
Macroeconomics Made Easy: Online Certification Course
-
Stock trading
Cryptocurrency Made Easy: Cryptocurrency Course
-
Stock trading
Introduction to Technical Analysis and Candlestick Theory
-
Stock trading
Market 101: Insights into Trendlines and Momentum
-
Stock trading
Stock markets made easy
-
Stock trading
Futures Trading Made Easy: Futures and Options Trading Course
-
Stock trading
Stock Investing Made Easy: An Introductory Stock Market Investment Course
-
Stock trading
Technical Analysis for Everyone – Technical Analysis Course
-
Stock trading
Options Trading Course for Beginners
-
Stock trading
Market 103: Mastering Trends with RMI and Techno-Funda Insights
Tata Motors, optimistic about M&M, in no rush to buy Ola Electric: Deven Choksi
What has been your portfolio strategy? Have you changed any of your portfolio approaches based on the fact that the world suddenly has so many parts moving?
Sameer Arora: No, in the last four-five days, at least in my long short fund, I have not done anything. No extra long, no extra short, nothing. My bet was that this was a short term thing. At the same time two or three things were working together, higher STT, new rules on trading, whatever, on option trading.
Further, this rule provides Rs. 25,000 crore is about If you are a large FII, you either have to downsize or disclose 100% of the ultimate beneficiaries, plus this China thing has happened all together. So, who knows what was really responsible for this very aggressive selling. We have now discovered that there was a good sale yesterday as well, but that’s what happens. Not that the purchase amount should be high, but the market should realize that this is irrelevant.
Finally, yesterday’s figure was still huge, at Rs. 5,000 crore, but it was good that the market was Rs. 5,000 crores was increased with sales as it is some good signal for sellers, FIIs, traders, hedges. Fund person, that this market is growing without you and so you can’t go either.
What is your assessment of the earnings season? Q1 numbers were not great. Q2 can be blamed on elections, heatwave and various other factors. Do you think we are in for a disappointing result again and that, in a sense, could be a challenge?
Sameer Arora: But there will be new reasons. It will be monsoon, it will rain. Before, it was summer. The results are not good, but for some companies it is okay to good and the areas that are not good are otherwise good.
Consumer spending patterns are reshaping the auto sector: Vijayaraghavan Swaminathan
In the last quarter, although the total numbers were not good, if you exclude the oil and gas guys, it was okay. There was 13-14% growth, but it visually looked like 5-6% growth because of the big losses in that quarter. It could be some other sector, but generally speaking, financials will do well and IT will bottom out, which means they can say we’re seeing better growth, we want better discretionary growth. , we see some BFSI growth, something or the other.
For consumers, the story is that since the monsoon, the rural economy will do better. But those stocks have already gone up a lot. There will be more confusion whether to look at the results or pay attention to these possibilities of better things to follow, just because these numbers are so low that instead of 4-5%, you will grow 8%. These new consumers, Zomato type consumers, at least you grow 20%, 30%, 40%, it’s more interesting.
Is it time to look at some of these new interesting growth areas, types of stocks or traditional issues like PSU packs that have improved a bit or for that matter financials, where would you say the tilt should be right now in this regard? investment?
Sameer Arora: When we get new money, we try to find everything broadly, but in the past, like in the last two-three months, that money has gone into IT because for two years, starting June 2022, and in the last quarter, we have election results. And after the budget PSUs and other government-linked stocks became nervous and generally there was no strengthening in the budget.
We sold some PSUs including railway PSUs and some defense PSUs and that money was put into IT. Our IT today, like my offshore fund, would probably be 12%, 13% or 13%, 14%, compared to maybe 3% for the previous two years, so that’s where the last big money has gone. On the margins, you always see something new here or there. But in terms of big sector shifts, this is where it’s been in the last two months, three months.
Is Moton Blues Over? What to expect for autos in October and beyond? Kumar Rakesh explains
You talked about the confusion in the consumption space and one of the confusions is related to the auto sector because on the one hand there is talk of record high inventory, festive sales are not that strong, but it is a sector that everyone is positive about. In the medium term and with the Hyundai IPO coming up, there is more interest in that space. What is your opinion?
Sameer Arora: There is no boom in this story. It is just a story created by the Indian public for whatever reason. Because there are 8 or 10 global listed auto companies and you can see what has happened to them in the last three months, six months. Each of them has a warning.
One of our big companies in India is basically 50-60% exposed to the same market. How can nine out of nine companies warn? Our company does not warn but says that we will close the plant because there is more inventory, but in the long run we are bullish. If nine of those guys aren’t bullish on their market, why one of us is bullish on our company, I don’t know. Overall, I think auto is one of the worst sectors to invest in. And I think this new IPO listing will be mostly plus-minus, let’s see.
Is this the same scenario for two-wheelers or do you see some kind of better scenario at least for two-wheelers?
Sameer Arora: Two-wheelers are a little different. We don’t have it, but we are not aggressively negative in our mind or in our portfolio. The reason is that actually in auto, i.e. four-wheeler is actually a global sector and those companies also come to India, you can protect and put duties and do hundreds of things, but in your mind, we know that This car, this company’s product is much worse than other products, although not available in India, but then you don’t mind paying double, triple multiple of other companies.
In two-wheelers, the benchmark is not there and the cost of this disruption in terms of R&D and all is not as high as in four-wheelers where there is a global race and the investment is much larger scale than any poor Indian. The company can handle. Volkswagen’s current EV budget will be something like $200 billion over five years. I don’t know where we are playing on this scale, place duty, place duty, protect. So, two-wheelers are a bit different and a bit local. But four-wheelers are a global thing and we cannot hide only in India or with Indian listings.
(You can now subscribe to our ETMarkets WhatsApp channel)
