Axis AMC's Chandresh Nigam on how to pick winners in market
Markets can see a 10 percent pullback anytime, said Axis AMC CEO Chandresh Kumar Nigam, while adding that correction now would be technical and not driven by fear.
Markets can see a 10 percent pullback anytime, said Axis AMC CEO Chandresh Kumar Nigam, while adding that correction now would be technical and not driven by fear. Nigam also said that stocks seem to be reasonably valued from a 3-5 year perspective and any dip should be an opportunity to buy. He further said that global markets may not outperform Indian equities.
Speaking with CNBC-TV18, Nigam said, “We are in a fair zone for the quality sustainable businesses and having said that there could be a small correction any point in time in equities that is a risk which both retail investors, as well as institutional investors, have to be ready for at all points in time. Having said that, yes markets have seen a sharp rise, we should be ready for any small corrections, possibly the times to buy into these strong businesses if those pullbacks and corrections do come in.”
He further added, “I am not trying to predict any, but I think there are some probable events on the horizon that may make that happen. But it is not a pullback which say that everything is going to turn back to the March and April kind of numbers, I think that was period more about fear. This will be more technical in nature in my view and probably should be used for investment or use the bounce to get in. There is still a lot of money waiting on the side-lines.”
A correction now would be technical and not driven by fear, said Nigam, while adding that it should be used as an opportunity to buy.
“The three areas resilience, recovery and momentum I think they all encapsulate this entire momentum theme that over the next 3 years to 4 years to 5 years - we are not playing recovery just because 2021 which is next financial year will be better than 2020-2021. So 2021-2022 will be better than 2021 which anyways is a case for probably all sectors of the economy,” he told CNBC-TV18.
Talking about the nature of recovery and sectors that may drive it, Nigam said, “We are looking for recovery which is more sustainable beyond 21-22 and this gets to growth longer term. So rather than just playing which is too cyclical or just a short term recovery trade wherever we see 3-5 years strong growth and by the way, I think those basic stories about India being low penetration levels etc. all that will come back to the fore. There are large segments of the economy whether it is discretionary consumption, staples, IT, healthcare, it is technology related stuff, it is financials, it is personal mobility I think all those are long term stories in India and they will continue to do well and that is well I think most of the recovery in the stock markets also happen.”
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