Smallcap index hits new high; experts evaluate the big moves

Smallcaps outperformed the Nifty this year with a 42 percent rally against 13 percent for the benchmark. The smallcap stocks were on a roll yesterday, July 5, and took the BSE Smallcap Index to a new high of over 25,800. In an interview with CNBC-TV18, Rajesh Kothari, managing director of AlfAccurate Advisors and Anshul Saigal, head & executive VP of Kotak PMS discussed the big moves in the smallcaps.

"Price-to-equity may not be the best way to value smallcap index. There has been a significant rise in smallcap index and one need to have a bottomup approach from current levels to make sure that you do not burn money particularly in the microcap index and smallcap index,” Kothari analysed.

Meanwhile, Saigal said, “We are very positive on real estate and ancillary sectors where we anticipate that going forward there will be a significant uptick in volume and also prices progressively in that space and because there are some 200 ancillary industries which depend on real estate volumes to go up, these ancillary industries should benefit from home improvement to building materials etc.,”