Equity Outlook 2009
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Equity Outlook 2009: Pain before bounceback 9 Feb 2009 Economic Times felt that this is perhaps the best time to bring under one roof — The Rooftop at the Trident — 100 crack fund managers, brokers and FIIs to brainstorm what lies ahead. Equi ty Outlook 2009 — which featu red eight bulg e-bracket stock market guru s under the aegis of your paper’s upcoming business channel ET NOW — helps you identify the opportunities and risks. Catch the action in our inside pages, but here are some of the highlights ... Stock market to recover before the real economy recovers by the end of the year, says Uday Kotak. India Inc should be on its way to perhaps, a much better 2010. Don’t expect a recovery soon. Morgan Stanley’s Ridham Desai sees Sensex at 8500 in December 2009. Most panelists felt that the Sensex will end the year between 8000 and 8500. A strong 70% in the audience of 100 fund managers and brokers felt that the Sensex will not cross 10,000 by year-end. Market, at best, could move sideways this year. 2008 was not a difficult year — at least, the downward direction was clear. 2009 will be very tough, a year of trading bets rather than investment ideas. “Riskiest time to invest, but too much pessimism has been factored in,” says Rakesh Jhunjhunwala. “Wait for some signs of growth rather than try to catch the first bounce,” adds Rashesh Shah. Forget about mid-cap and penny stocks, says Shankar Sharma. They are not going to be part of any rally for 3-4 years. If at all there’s a rally now, it will be led by 30- 40 frontline stocks — in fact, not even all stocks in Nifty 50 may rise. Investors may do well to stay with the big boys in 2009 and 2010. India poised to recover faster than other economies, yes, but two years could be painful. However, for those who have the risk appetite to stay invested, two sectors worth looking at are pharma (Madhu Kela’s big on this) and banking. Other than that, it would be best to conserve capital. Gold will continue to outperform other asset classes. “Buy, buy, buy and buy,” says Rakesh Jhunjhunwala. Nilesh Shah and Ved Prakash agree. That’s because
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Transcript of Equity Outlook 2009
8/6/2019 Equity Outlook 2009
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Equity Outlook 2009: Pain before bounceback 9 Feb 2009
Economic Times felt that this is perhaps the best time to bring under one roof — The Rooftop at the Trident — 100 crack fund managers, brokers and FIIs tobrainstorm what lies ahead.
Equity Outlook 2009 — which featured eight bulge-bracket stock market gurusunder the aegis of your paper’s upcoming business channel ET NOW — helps youidentify the opportunities and risks. Catch the action in our inside pages, but hereare some of the highlights...
Stock market to recover before the real economy recovers by the end of the year,says Uday Kotak. India Inc should be on its way to perhaps, a much better 2010.
Don’t expect a recovery soon. Morgan Stanley’s Ridham Desai sees Sensex at 8500in December 2009. Most panelists felt that the Sensex will end the year between8000 and 8500. A strong 70% in the audience of 100 fund managers and brokersfelt that the Sensex will not cross 10,000 by year-end.
Market, at best, could move sideways this year. 2008 was not a difficult year — atleast, the downward direction was clear. 2009 will be very tough, a year of tradingbets rather than investment ideas. “Riskiest time to invest, but too much pessimismhas been factored in,” says Rakesh Jhunjhunwala. “Wait for some signs of growthrather than try to catch the first bounce,” adds Rashesh Shah.
Forget about mid-cap and penny stocks, says Shankar Sharma. They are not goingto be part of any rally for 3-4 years. If at all there’s a rally now, it will be led by 30-40 frontline stocks — in fact, not even all stocks in Nifty 50 may rise. Investors maydo well to stay with the big boys in 2009 and 2010.
India poised to recover faster than other economies, yes, but two years could bepainful. However, for those who have the risk appetite to stay invested, two sectorsworth looking at are pharma (Madhu Kela’s big on this) and banking. Other thanthat, it would be best to conserve capital.
Gold will continue to outperform other asset classes. “Buy, buy, buy and buy,” saysRakesh Jhunjhunwala. Nilesh Shah and Ved Prakash agree. That’s because
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currencies around the world are likely to weaken, thanks to the bailout package.Shankar Sharma is not too enamoured by the yellow metal.
Indian stocks still promisingDespite the biggest corporate fraud unraveling in January, Indian equities figured among the best
performers in all the emerging markets, according to Morgan Stanley Capital International
(MSCI). The index delivered a (-) 2.1% for January as against MSCI’s Emerging Markets Indexreturn of (-) 6.6%.
According to MSCI data, India’s MSCI index closed at 228.7 points. Only two other markets — Chile and Brazil — delivered better returns than India. While Chile delivered 10.5% for January,Brazil saw a growth of 4.5%. However on an annual return basis, India’s performance is poorer.The country delivered a (-) 60.1% for the preceding 12 month period. Sensex too shed 2.3% on asequential basis to close at 9,424.20 points, while NSE Nifty lost 2.90% to close at 2,874.80
points.
Among the major negative news which dampened the sentiment in the country’s bourses were
Ramalinga Raju’s fraud disclosures in Satyam Computer Services, 9.9% fall in India’s exports in November last year, and the contraction of the country’s manufacturing activity to a three-and-half-year low in December.
“January was among the worst starts to a year that equity investors have ever seen. After a relief rally in December 2008, bears once again took hold of most of the equity markets across theglobe. The negative news flows globally, coupled with relatively poor results in Jan-March 2009quarter reported by the companies, led to a selloff in the global equity markets (including India).Satyam scam was a major negative event, which impacted the equity markets in India. However,some positive news flows like stimulus package announced by Indian & German Governments,hope of a second stimulus package in US & interest rate cuts along with softening inflation in
India restricted the extent of fall during the month,” HDFC Securities said in a report.
During January, FIIs pulled out Rs 4,250.20 crore from markets, while mutual funds soldequities worth Rs 11,182.50 crore against purchases of Rs 9,919.10 crore. Among BSE sectoralindices, BSE Realty was the worst performer with losses of 26.60%, Bankex shed 10.2% andcapital goods were down by 9.5%. FMCG, Auto and Oil and Gas delivered positive returns.
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