ET NowIn an interview with ET Now, Sachin Shah, Fund Manager, Emkay Investment Managers Ltd, shares his views on markets. Excerpts:
ET Now: Are you surprised with this utmost show of resilience by Indian markets?
Sachin Shah: Yes, the Indian markets have behaved much more maturely than one would have expected. We obviously had some bit of a knee-jerk reaction in the early morning session, but overall, markets are taking cognisance of the fact that we are not directly so much impacted by whatever is happening in Greece. It is more like a wait-and-watch kind of a thing at this point in time and we have to see how the European Union reacts to the 'no' vote from Greece. If there is a contagion effect, we may see some bit of a reaction in our equity markets some time during the week.
ET Now: What is the view when it comes to the overall oil marketing companies? It is the oil magic that seems to be playing out here, and they have had a pretty steady run so far, do you think that this sort of a move is here to stay?
Sachin Shah: Oil-marketing companies have done very well in terms of the stock prices and, obviously, it is more to do with the way the deregulation has actually played out in the last two years. So, that is one of the best reforms that this country has had in the last two years. The diesel prices seem to be now moving in sync with the global prices, rather than any subsidy overhang. There also is a huge entry barrier in terms of the retail prices that some of these oil marketing companies have. This is now getting valued in the stock markets, now that they do not have any overhang of the subsidy issues.
ET Now: Sectorally, what else is it that you are liking right now?
Sachin Shah: We like private sector banking and some of the FMCG companies, may be a couple of names in the retail sector too. In terms of valuations, there are very few names that we like at this point in time. Honestly, we are also entering into the result season, so we would like to wait and watch those results before making a final call. But broadly, the markets look more like a 'no man’s land' and it is a classic hold kind of a situation at the current valuations.
ET Now: Are you surprised with this utmost show of resilience by Indian markets?
Sachin Shah: Yes, the Indian markets have behaved much more maturely than one would have expected. We obviously had some bit of a knee-jerk reaction in the early morning session, but overall, markets are taking cognisance of the fact that we are not directly so much impacted by whatever is happening in Greece. It is more like a wait-and-watch kind of a thing at this point in time and we have to see how the European Union reacts to the 'no' vote from Greece. If there is a contagion effect, we may see some bit of a reaction in our equity markets some time during the week.
ET Now: What is the view when it comes to the overall oil marketing companies? It is the oil magic that seems to be playing out here, and they have had a pretty steady run so far, do you think that this sort of a move is here to stay?
Sachin Shah: Oil-marketing companies have done very well in terms of the stock prices and, obviously, it is more to do with the way the deregulation has actually played out in the last two years. So, that is one of the best reforms that this country has had in the last two years. The diesel prices seem to be now moving in sync with the global prices, rather than any subsidy overhang. There also is a huge entry barrier in terms of the retail prices that some of these oil marketing companies have. This is now getting valued in the stock markets, now that they do not have any overhang of the subsidy issues.
ET Now: Sectorally, what else is it that you are liking right now?
Sachin Shah: We like private sector banking and some of the FMCG companies, may be a couple of names in the retail sector too. In terms of valuations, there are very few names that we like at this point in time. Honestly, we are also entering into the result season, so we would like to wait and watch those results before making a final call. But broadly, the markets look more like a 'no man’s land' and it is a classic hold kind of a situation at the current valuations.
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