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New UserCement, industrial manufacturing to lead recovery: Lalit Nambiar, UTI Mutual Fund
19 Aug 2016
Cement, industrial manufacturing to lead recovery: Lalit Nambiar, UTI Mutual Fund
In a chat with ET Now, Lalit Nambiar, Senior Vice President & Fund Manager Equity, UTI
Mutual Fund, says the government is putting in place measures to ensure that is recovery in
some parts of infrastructure. Edited excerpts
As of now it is all looking nice and cosy is this as good as it gets or do you
think now it is time to really exercise some caution?
Lalit Nambiar: If you are looking at the stock specific story, may be one or two years out and stocks which are domestic focused bottom
up. You have reasonably good opportunities. So, I am not worried about that. I think the other aspect which probably has people worried is
liquidity. If you look at domestic interest rates especially bond yields and global trends towards emerging markets, it is quite clear that the
data coming out of the US seems to indicate there is not likely to be a rate hike anytime soon and that has possibly emboldened people to
move to the emerging markets whether it is in bonds or into equities.
So that is probably keeping people worried because it means that money is rushing after stocks without so much thought about immediate
earnings which if you are willing to wait is a fair thing because there could be a story in India emerging simply because we are looking at
an economic revival. However, the pace of that economic revival may keep people a little bit sceptical and I think probably six to eight
months or one year down the line, we should see some amount of a pickup in earnings which should keep markets in good spirits.
ET Now: How much of the current market action is the function of simple global cues and global connection? We may feel
special about what we are in terms of global positioning but frankly other emerging markets have also done rather well. A market
like Russia and Brazil have done reasonably well in 2016. US markets are at an all time high. I am keeping Europe and Japan out
of the equation because those economies are a genuine mess but in general if I look at big markets and emerging markets is the
world looking like a charged up place?
Lalit Nambiar: There is definitely a very strong undercurrent which is coming from liquidity, which is coming from negative yields in some
parts of the world on bonds and the surge for yield. People are willing to take risks in equity and that is obviously reflecting even in India.
So, I do not think it is purely an India story like you put it. It is largely a part of the fact that money is searching all around the globe for yield
and is willing to take more risks simply because the alternatives are not so great.
ET Now: I want to talk a little bit about what the outlook is when it comes to the media space as a whole. Do you have a call given
the fact that earnings have been trickling in, seeing some sort of an improvement this time around. What is the outlook as to
which is the space within media that is likely to benefit? Would it be some of the multiplex stocks? Would print or on account of
digitisation some of the players like a Dish TV likely to stand out?
Lalit Nambiar: If you look at it thematically, without getting into stocks, one thing is clear that the amount of spend growth which you saw
in FMCG especially in the TV space is probably going to decelerate because there is enough money for companies in FMCG to spend in
terms of rural growth. So if they want to spend on below the line, they probably will see a slower growth in ad spends. That is one thing I
would take away in that space. The rest of it, I do not think there is an extremely exciting opportunity clearly in terms of any trend which we
can talk about which will impact specific parts of that sector. If you are looking at subscription revenues or if you are looking at multiplexes,
I do not think there is one single factor which you can point to in and say this is going to be a big driver because even if there is increased
income in the hands of rural consumers and increased confidence because of the rains, I do not see that playing directly into some of
these names. So I do not think there is any clear trend there which you can play but rather a top down.
Source:Economin TImes