Market is currently giving outstanding buying opportunities, says Sivaram of Enam Holdings

Sridhar Sivaram, investment director at Enam Holdings, spoke to CNBC-TV18 about the current trend in the stock market and shared outlook. Sivaram is of the view that the market is currently giving outstanding buying opportunities.

According to him, the overall negativity is still not over since the worst of bad news is not completely over but a lot of price damage maybe over because the market has discounted for a lot of the bad news.

“Out of the 3000 odd stocks that trade in the market, almost 65 percent of stocks are down more than 50 percent and another 25 percent are down between 25 and 50 percent. So, only a handful of stocks have done well in the last 18 months. That is where the opportunity lies – many are down for valid reasons and many are down because of cyclical issues and that is where the house is looking at opportunities,” said Sivaram.

Talking about various sectors, Sivaram said he is disappointed with the auto sector because they have made maximum profits over the last five years but they haven’t really done anything themselves to address the slowdown in the industry – like advertising, extra discounts, willingness to sacrifice a bit of margin etc. "There is no reason for the industry to wait for the government to do something, especially when they have strong balance sheets."

He said the house is still wary of the housing finance companies because there is no comfort in the numbers yet. “The disclosure levels are very poor for HFCs,” he added.

Talking about the overall slowdown in the economy, he said. "One of the reason is that the government, which is the largest spender in the market is not spending and hasn’t been doing so for the last 6-8 months. Therefore there is a need for the government to loosen its purse strings to stimulate market."

With regards to commodities, he said, "When they come to 0.5-0.7 book is when you should look at buying them and many of them are currently at these levels."

"The house is reasonably bullish on cement companies as cement prices are driving profitability and they are positive on paint companies even at current valuations", Sivaram said.