Companies with strong business models, large cash flows, and low levels of leverage will continue to do well even in a rising interest-rate environment, says T.P. Raman, managing director, Sundaram BNP Paribas Mutual Fund in an interview with Sanjay Kr Singh.
What are the factors responsible for the current weakness in global markets?
The weakness in select European nations like Greece, Spain and Portugal and in the US housing sector as well as the overall US economy are all acting as dampeners for markets worldwide. Geo-political issues like US-China relationship and the behaviour of the Chinese currency (Yuan) are also concerns for the Indian markets. Developments related to Iran’s nuclear programme and reactions from the global community to it is another area of concern.
What are some of the key issues to which market participants will expect some answers in the Budget?
Macro issues like a roadmap for fiscal deficit reduction, handling of subsidies, and next year’s government expenditure and borrowings programme to fund the spending are some factors the market will keep an eye on. Implementation of GST (Goods and Services Tax) and the extent of push given to the infrastructure sector will be some of the other key issues that the market will look forward to in the Budget.
Any particular wish or expectation that you have from the Budget?
Development of long-term instruments in the debt market to mobilise savings should be encouraged. This will help in funding the country’s huge infrastructure requirements.
NTPC’s follow-on public offer received a rather tepid response. What does the government or the disinvestment ministry need to do in order to make PSU IPOs/FPOs more attractive in future?
Attractive pricing will in future ensure a good response from the market.
The Kirit Parikh Panel’s recommendations on pricing in the petroleum sector have created a buzz around this sector. Would you bet on the sector currently (since it also requires taking a call on the political question of whether the panel’s recommendations will be accepted)?
Any sectoral investment should be looked at from a medium to long-term perspective rather than from the short-term perspective.
What are the factors responsible for the current weakness in global markets?
The weakness in select European nations like Greece, Spain and Portugal and in the US housing sector as well as the overall US economy are all acting as dampeners for markets worldwide. Geo-political issues like US-China relationship and the behaviour of the Chinese currency (Yuan) are also concerns for the Indian markets. Developments related to Iran’s nuclear programme and reactions from the global community to it is another area of concern.
What are some of the key issues to which market participants will expect some answers in the Budget?
Macro issues like a roadmap for fiscal deficit reduction, handling of subsidies, and next year’s government expenditure and borrowings programme to fund the spending are some factors the market will keep an eye on. Implementation of GST (Goods and Services Tax) and the extent of push given to the infrastructure sector will be some of the other key issues that the market will look forward to in the Budget.
Any particular wish or expectation that you have from the Budget?
Development of long-term instruments in the debt market to mobilise savings should be encouraged. This will help in funding the country’s huge infrastructure requirements.
NTPC’s follow-on public offer received a rather tepid response. What does the government or the disinvestment ministry need to do in order to make PSU IPOs/FPOs more attractive in future?
Attractive pricing will in future ensure a good response from the market.
The Kirit Parikh Panel’s recommendations on pricing in the petroleum sector have created a buzz around this sector. Would you bet on the sector currently (since it also requires taking a call on the political question of whether the panel’s recommendations will be accepted)?
Any sectoral investment should be looked at from a medium to long-term perspective rather than from the short-term perspective.
Against the backdrop of a likely increase in interest rates this year, which are some of the sectors that you think look promising currently?
More than sector, our approach will be stock specific. Stock selection as opposed to sector attractiveness or unattractiveness will be the decisive factor. Companies with a good business model backed by strong cash flows and low levels of leverage will continue to do well in a rising interest-rate scenario.
Source: http://www.indianexpress.com/news/our-investment-approach-will-be-stock-specific/579691/0
More than sector, our approach will be stock specific. Stock selection as opposed to sector attractiveness or unattractiveness will be the decisive factor. Companies with a good business model backed by strong cash flows and low levels of leverage will continue to do well in a rising interest-rate scenario.
Source: http://www.indianexpress.com/news/our-investment-approach-will-be-stock-specific/579691/0
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