"If you look at the Nifty, I would probably believe that 5800-6200 should be a good range which would be plus-minus 2-3 percent. The volatility has come off significantly, thanks to the liquidity support which still continues. But, the upside is being capped because of various events and weakness in earnings. If liquidity support gets withdrawn, then it is quite possible that we might see a downside to the levels of 5800," he explained.
Besides, Shah feels the heavy issuance calendar in 2013 is going to crowd out investment and achieving the fiscal deficit target would come at a cost of growth in FY14. He is also not very hopeful of witnessing a revival of the investment cycle in the near-term.
As far as the Budget is concerned, Shah thinks there are not many catalysts that will enthuse the market. According to him, oil and gas remains a strong contender for market leadership in 2013. He also sees some early signs of margin pressure in consumer plays.
Overall, FY14 will continue to be a challenging year for the economy, believes Shah. But, rate cuts from the Reserve Bank of India and government spending in the second half of the year may lead to better growth, he opined.
Here is the edited transcript of the interview on CNBC-TV18.
Q: Is the market looking vulnerable to you or do you see a strong pre-Budget or post-Budget rally shaping up?
A: This seems to be a market which is in more of a wait and watch mode. It seems to be in a consolidation mode given the kind of run up that we have seen in the market over the last six odd months and the kind of events that we have in front of us over the next few days or few weeks.
I think we are in a situation where mean reversion in the markets have happened from those lows of 13-14 times. We are now at about 16-17 times current year valuations. Probably, there is no juice left in terms of PE expansion for the markets and I think clearly the markets are waiting for some cues in terms of the Budget and many other events associated with it.
I would probably think that it is neither a market where you see tremendous upside in the short-term, neither does it look very vulnerable and it probably will remain in a consolidation mode till we are through with the Budget.
Q: What do you expect to see in the broader market? This quarter earnings were not great for many midcaps and they got hammered. Do you think the worst is over for the moment, for midcaps and small caps?
A: Maybe for the moment it is quite possible that the worst is behind us, for the midcap and small caps. I would probably think that this is from an extremely short-term perspective, but clearly what is really lacking is basically a follow on or a follow-through of earnings growth. Most of the midcap companies have not announced good numbers, most of them have announced degrowth and many of them have announced significant losses and it is quite likely that this might persist for the next few quarters.
It looks very unlikely that earnings growth is going to come back with a bang in FY14 and I think this is probably because the prices of a lot of administered products or the administered prices of several products have been hiked, be it railway fares, diesel prices or petrol prices. I think this to some extent is going to squeeze margins for a lot of companies, particularly for the midsized and the small sized firms as they lack or have very limited pricing power.
So I probably think that margin pressures are likely to persist for a few more quarters. The sentiment pertaining to private demand still continues to be kind of sobering of weak which is evident from the numbers of consumer durable companies and the kind of guidance which auto Original Equipment Manufacturers (OEM) are dishing out.
Clearly, from both demand as well as from a margin perspective it looks like the weakness that we have seen in the recent earnings is likely to persist for a few more quarters. To that extent, I do not think that the worst could probably be over for a lot of the midcap and small cap stocks.
More to come.
Anda sedang membaca artikel tentang
Do not see midcap rally; oil gas to lead mkt: Nilesh Shah
Dengan url
https://rokokkanker.blogspot.com/2013/02/do-not-see-midcap-rally-oil-gas-to-lead.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Do not see midcap rally; oil gas to lead mkt: Nilesh Shah
namun jangan lupa untuk meletakkan link
Do not see midcap rally; oil gas to lead mkt: Nilesh Shah
sebagai sumbernya
0 komentar:
Posting Komentar