Global markets are on a roll after the US Federal Reserve appeared to drag its feet on interest rates. India, too, is witnessing a bull phase with the Sensex topping the psychological mark of 29,000-level and rising. Where is the Indian market heading to? Is it just a rational bubble? Speaking to BTVi , Enam Holdings Investment Director Sridhar Sivaram says India has failed to meet expectations till now.

Some overseas investors who have been covering markets are baffled with India. While we have been witnessing a huge emerging market rally, especially in the past 3-4 months, India is actually under-performing, he said. While Brazil is up 65 per cent, other major EMs such as Korea, Taiwan and Indonesia are up 20-25 per cent; India is up just 10-11 per cent, he said.

I want to start with the structure of the market rally. Where are we right now? ?

I think it is important to put this in context. If we see what is happening to emerging markets in general, it is already up 16-17 per cent and this is the emerging markets’ MSCI Dollar returns.

Out of that if you take any larger country, for example, Brazil is up 65 per cent. Even Korea, Taiwan, Indonesia, or entire Latin America except Mexico, is up 20-25 per cent. In that context, we are up 10-11 per cent. We have to keep this in context that there is a huge global liquidity rally that we are seeing right now and India is participating. But India is actually significantly under-performing.

My friends who are into managing emerging markets are frustrated with India — that India is actually not participating thinking that the market rally is so much, and ‘will it correct?’. We had a huge emerging market rally, especially in the past 3-4 months. India is under-performing in that context. So I think if this liquidity rally continues, India will participate, but possibly lesser than any of the other countries.

If I do not have a choice of being abroad and I have to look after my own markets, what should I look at? What should I look at as the next theme to be in?

I think this market, unfortunately, is now no longer looking at themes. So within the sectors, too, we are seeing stocks that are giving huge returns, stocks that are under-performing and stocks that have been negative for a year. In 2014, if you had bought just banks and cyclicals, you would have made huge returns. It didn’t matter which stocks you bought. That is no longer the luxury as far as this market is concerned.

It is becoming really a stock-pickers bottom of the market because the valuation comfort, to a large extent, is not there.

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