Expect economic activity to pick up by the end of fiscal year, says Old Bridge Capital

Kenneth Andrade, founder and CEO of Old Bridge Capital Management, shared his views and outlook on the market and select sectors.

“One of the biggest macro triggers that are there is that interest rates are also on a slide. Fundamentally and logically, the lower interest rates should give some kind of valuation support to the underlying market. We just have to have a little bit of patience through this cycle,” Andrade told CNBC-TV18 on Monday.

“The challenges continue to remain on the consumer part of the economy. There are near-term issues on the slowdown of the environment. The slowdown is more to do with availability of capital from the banking system more than anything else. Once that comes back to normal, our sense is that it should begin post-September or December and into the last quarter of this financial year. Things will look much better than what they appear to be at this point in time,” he added.

“We have to realise that the last decade has been relatively fuelled by credit into consumer cycle. The consumer continues to remain leveraged. We will probably see a moderation of demand in that cycle out there,” said Andrade.

On the about markets, Andrade said, “This is the only time when you can relook at your portfolios and pick up businesses over a period of time and you are getting them at good valuations. This is not really a bear market because a large number of indices are close to their highs. While the midcaps and the smallcaps have seen a fair amount of draw-downs, I think there are opportunities out there that are already there and that will come over the next couple of weeks.”

“We have got a fair amount of infrastructure, industrials, we have started looking at capital goods, and we have got some bulk commodities on a portfolio and companies into distribution. We are not in consumers, we are not in financials and fairly light on IT at this point in time,” Andrade said.