ABN AMRO AM bullish on energy & banking
Excerpts from CNBC-TV18’s exclusive interview with Sameer Narayan:
Q: Would you say with the performance of the market today, they have put the P-Note issue behind them and are on their way to challenge the highs or perhaps surpass the highs they set for themselves the week before?
A: What happened yesterday evening, in terms of the communication from the regulator to market participants, was positive as it clarified a lot of doubts that people had.
Now, markets would need to look at the fine print post the October 25 meeting. Perhaps, there is a lot of significant events leading up to that and a lot of numbers today, tomorrow and the day after. In addition to that, there is the credit policy coming up and the Fed meeting.So, there are a lot of numbers and all those need to be priced in.
Q: Politics would be another important part of that entire equation. If we were to scale newer highs from here on, how much in terms of percentages could we go up? Conversely, if there was any negative news that came out, do you see a significant 5-10% downside from current levels?
A: If you are invested over at least 1.5-2 years time horizon, it doesn’t matter. Therefore, one should not be looking at the market as a whole. You have to look at selective pockets of value and sectors, where there is still a lot of secular growth seen playing.
Q: Which are the sectors that you would be placing your bets on, at this point of time?
A: The entire basic material space, energy and the banking space are sectors we like. These current valuations in IT would merit strong attention.
Q: Are you reasonably confident that the market can see new highs in 2007 itself?
A: Its difficult to say. There are a lot of factors that are going right for India as a country and as an investment destination. But you need to remember that in an integrated world, you need to take care of a lot of factors that emerge outside the economy. They also have a lot of bearing on the kind of fund flows, which are ultimately the people who will come and invest in your country. Therefore, one has to look at both the axis.
Q: Considering that the government has kind of been very clear or emphatic that the speed of capital flows are engendering a lot of discomfort for the government, do you think the investor psyche has been wounded to some extent?
A: Yesterday, the FM also made a statement that it is not restrictive in terms of capital inflows. So, there might perhaps be a lot of strong interpretation. But still I would say that the rules of the game are changing. And perhaps people need time to digest it.
Posts
