IIFL’s Jonathan Schiessl on why FIIs are selling Indian stocks

Jonathan Schiessl, senior vice president at IIFL AMC, spoke to CNBC-TV18 about why foreign funds have been on a selling spree in the last 5-6 weeks.

“Continuous changes in tax regime doesn’t help compared to other emerging markets which are stable,” said Schiessl.

According to him, "Improvement in fundamentals will lead to a foreign institutional investor (FII) flows in the market."

Talking about the change in sentiment, he said, “Sentiment is clearly at rock bottom at the moment. For me, I always love these times because stock prices are back to rational levels. So what needs to change is a number of factors both internally and externally.”

Speaking specifically about Eicher Motors, Schiessl said, “There are some headwinds there and ultimately I think it can do very well internationally, but the competition in this market here (in India) is enhancing and with all headwinds from regulatory change, from margin pressure, input cost pressure etc. it’s a difficult space as is the whole (auto) space.”

About the IT sector, he said, “We a bit underweight on the sector. There are some headwinds from global basis but if you choose the right company, it’s not a bad place for hiding money at the moment. It has got a huge growth opportunity but for the time being the domestic side of the economy is uneven.”

On the earnings front, Schiessl said, "The market is pencilling in the expectation that earnings growth will be lower hereon."

“From a positioning perspective, we are still overweight financials. We still buy financial space. Yes, it’s not just banking; there are huge amounts of other areas that you can play be it insurance, the life sector. So the financial sector still, probably for us, the key sector in India; we have maintained that and yes, there has been moments of pain in that but I still think that’s the right place to be,” added Schiessl.