With global crisis affecting the Indian economy, volatility
in prices is also influencing the country already hit by high rate of
inflation. Sunil Singhania, head (equity) at Reliance Mutual Fund talks to NDTV
about the Greece crisis and the possibilities of the Indian economy attracting
more fund flows.
NDTV: Is there a sense of deep unease with what is happening
globally at your end?
Sunil: Everyone would like things to be much more stable.
One would like things to be more clear at this point of time. Every day is a
new day. We don’t know, about problems of the countries and it is so difficult
. We have all sorts of analysis available, like hunderd reports 40 of which are
positive, 40 of which are negative and 20 in which they have no view.
We also rely speaking to experts, which are stationed there.
So it does concern us, but what we have been analysing is that a lot of these
concerns have already been factored in the pricing. For example, Greece defaulting
has 95 percent been factored because there is 95 percent probability of Greece
defaulting. So if it defaults, it’s only 5 per cent surprise and our view is
that one of the largest country in the near term looks like in its defaulting.
If India had been more proactive in its political and
economic decision making, we would have benefited out of it because global
investors are actually looking at some avenues where there is stability in the
domestic economy and India stands out as one of them.
NDTV: There is an attempt by the RBI to bring demand
for investment to lower levels otherwise they can control inflation. So
everything plays out accordingly. So would you look at RBI’s inflation
compulsion to increase interest rates may be one or twice and worries about the
corporate earnings and impact of all this?
Sunil: It is right now too early to say that RBI will
tighten more because it all depends on the trend and commodity prices and oil
prices over the next one month.
Already, we have seen a sharp pulldown in commodity prices,
copper is down 30 per cent, even gold and silver have come off a bit, oil is
down, to some extent. A sharp depreciation in rupee has negated some of these
benefits. Possibility of global prices to remain very strong is definitely unrealistic.
So from our perspective, we did a study where we zeroed down
on all the concerns that markets are facing at this point of time and what they
would look like after one year and across the board whether there was inflation
issue, interest rate and European issue.
Source: http://profit.ndtv.com/news/show/more-efficient-decision-making-to-woo-investors-reliance-mutual-fund-183145
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