Samvat 2076: Raamdeo Agrawal, Manish Chokhani and S Naren share their views on stock market

Indian shares have been volatile this year owing to slowing economic activities, a credit crunch and general elections. Stock market experts are divided over the outlook of the market in the coming year. Manish Chokhani, director, Enam Holdings, Raamdeo Agrawal, chairman of Motilal Oswal Financial Services and S Naren, ED and CIO of ICICI Prudential AMC shared their views and outlook on the market.

“I think the worst is behind us. We always start the year on an optimistic note. When you go through a normal economic cycle, the bottom of the cycle is when you realise the authorities are coming and throwing everything that they can at the problem. The government is giving you tax cuts, the Reserve Bank of India (RBI) is giving you interest rate cuts, everyone is trying to revive the economy and all the industry associations are being heard.

"The Prime Minister has recently gone to the United States and apparently made some commitments over there to investors and corporates to come into India. So there is no reason to believe that a lot of the pain that we kept enduring is going to continue forever."

"I would think when we look back, this year 2019 would have looked like a base formation year where you certainly formed a bottom and I don’t expect a V-shaped recovery but it certainly should be on its way up.”

“It is much clearer for longer-term investors that you invest in cheap stocks when the economy is down and you get very good returns in the long run."

"We look at five indicators of the economy, one is credit growth, second is power demand, third is oil demand, fourth would be container traffic and fifth would be auto numbers and all these are all high-frequency good quality numbers. All of them are telling you that the economy is in bad shape relatively.

"Therefore, the tough task for us to tell people is that when the economy is in bad shape, invest in small caps. When the economy is in great shape, you will be able to make money or you invest in value stocks when the economy is in bad shape and you make money.”

“The only difference I would say at this point of time while the economy is in bad shape, many of the large caps or mega caps are not cheap at all. This time you can clearly see that the mega-caps are not cheap but the rest of the markets are reasonably valued. How long the economy will take to revive, that is a debate. My belief is it should take longer but that doesn’t mean this is not a time to invest for the long-term.”

"We have seen some amount of bottoming out of the intense pessimism, which we saw led to government also coming back with a lot of steps and they are committed to doing even more. The RBI is very proactive on the liquidity cost of money, whatever is possible and finally, the number came that 88 percent decline, the credit flow – I think that is the most scathing statistics you have. So what is happening to that, we will come to know, I don’t think it will go worse than that. The pessimism is at a very low level.”

“Pessimism is on big time, there are more pessimists than optimists despite the strong market. I am 100 percent invested and I will always remain fully invested. Whatever money comes, we have to find one-two ideas and buy into that because we are buying QG (quality and growth).

"The market is looking high or almost all-time high because the QG stocks are doing very well. So my portfolio is positioned for this particular kind of rally, not that it has done some great numbers but it is at least not showing too much of downside.”