homemarket Newsstocks NewsNeed to follow bottoms up approach in market, says Motilal Oswal’s Raamdeo Agrawal
Need to follow bottoms-up approach in market, says Motilal Oswal’s Raamdeo Agrawal
While foreign institutional investors (FIIs) have recently been continuing to exit the domestic market, Motilal Oswal’s founder Raamdeo Agrawal believes they will have a painful entry once they intend to come back.
As investors remain cautious on Russia-Ukraine geopolitical tensions, market veteran Raamdeo Agrawal, Chairman & Co-founder of Motilal Oswal Financial Services, said companies will come out stronger after the ongoing crisis and that there’s a need to follow a bottom-up approach in the market at present.
“It is very tough to figure out the damage done. As the time comes by, we will realise that the weaker industries have become weaker, and weaker companies in those weaker industries have become worst, and the stronger industries will emerge stronger out of this crisis again. And among those strong industries, stronger companies will emerge even strongest,” he told CNBC-TV18 on Wednesday.
Agrawal said the world is very interdependent, the NATO allies are dependent on China and Russia, and the two are also dependent on the other side, so they have to accept this fact.
“At some point in time, they will realize that enough is enough. Let's get back to taking care of the economy. So right now, punishing the economy is the top priority, rather than taking care of the economy. As a settlement happens, the whole thing will change. I think investing has to be bottoms up right now,” he explained
According to Agrawal, one-side of the market risks are likely to have played out or are near peak.
Also Read | Consumer psyche gripped by fear; need stimulus for 12 months to build demand: Raamdeo Agrawal
While foreign institutional investors (FIIs) have recently been continuing to exit the domestic market, Motilal Oswal’s founder believes they will have a painful entry once they intend to come back.
“What is happening in the stock market front - that is more than a billion dollar daily selling by FIIs. That is a real world for us. We have to face that every day. I think we have faced that brilliantly. So they have had a wonderful exit from India but they will have very painful entry if at all they want to enter,” he said.
Commenting on the fixed income market, he said its performance in the past few months has been in-line with the equity market.
He also spoke about the banking sector, which according to him will be largely driven by a few major banks.
“They are in a very sweet spot, business-wise. They are the four or five banks who are going to underwrite the entire India growth story and the asset quality fully provided, the credit cycle is on an upward swing and credit cost cycle is on a downward swing, what more do you want and then there is a 15-17 percent natural growth,” he said.
First Published: Mar 9, 2022 2:05 PM IST
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