India is cyclically due for a good year in 2021, says First Global’s Shankar Sharma

After a 10-year bull market, 2020 saw a bit of cyclical bear market in the US dollar, he noted. Sharma is of the view that now investors should move away from dollar-denominated stocks due to the greenback’s depreciation.

“You need to be getting into assets and trades which are not just us dollar-denominated so you need to have diversification outside of pure US dollar plays and that is one of the reasons why in our global funds we moved away from US equities in large part from the middle of the year into other non-US equities and that has helped us a lot.”

On sectoral bets, he said, “Again from a tactical perspective, we are playing the cyclical so we had a very good run on the metal plays. In India, we really have limited choice we are placed in Tata Steel, and Hindalco and all that. We have played cement as well. We have not played the banks. So you can play cyclical without taking excessive risk and we are playing that without taking a lot of leverage or leverage plays.”

On IPO Sharma said, “Just because two or three IPOs got massive subscriptions and great listings mean that it an end of a bull market, it is a sign of caution no doubt about it. I don’t think it marks the end to the current bull market because India has not had a bull market. I don’t think you have had a speculative frenzy on a stock market side anyway, I think it is building up and it can go on a lot longer before things go south.”

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