Due to geopolitical tensions between Ukraine and Russia, there has been weakness in the markets around the world this week. With all the sanctions on Russia, the crisis is expected to escalate. Indian markets are also in difficult times due to these reasons. Meanwhile, in a long conversation with CNBC-TV18, Hugh Young, Managing Director Asia, Aberdeen Asset Management, said that in this period of rising geopolitical tensions, there is a possibility of heavy uncertainty in the market.
He further said in this conversation that in the recent fall, there are very good investment opportunities in the Indian market. India has so far performed much better than other Asian markets. He also said that from now onwards the Indian markets are not expected to see any further decline. In this conversation, he said that whatever is happening in Europe is very sad. Its consequences could be worse. Generally, such a fall in the market is seen as an opportunity. In such a situation, we get all the good shares at a cheap price.
India is comparatively a costly market which has performed quite well so far. He also said in this conversation that although the Indian market still looks very expensive, yet there are many such stocks in it which are getting at very good valuations.
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In this conversation, he further said that the performance of companies in India has been encouraging, we will keep an eye on what happens in the country on inflation and interest rates. The earnings outlook of the companies for the next year looks good. India is a well-rated market. However, the possibility of a fall cannot be ruled out. The reason for this decline could be external reasons. There is not much to worry about the Indian market in the short term.
ICICI Bank is Hugh Young’s preferred stock. He says that there has been continuous improvement in the quality of ICICI Bank. Apart from this, Kotak Mahindra Bank and HDFC Bank are also the likes of Hugh Young. He believes that both of them have good growth potential going forward and will also have comparatively low volatility.
Talking about IT companies like Infosys and TCS, he said that both of them are world class stocks and they have been successful in adapting themselves to the needs of the changing world. He further said that HUL has been underperforming in the consumption stocks segment. The company’s profits and margins have been impacted due to increase in cost of production but it will perform well in the long term.
When Hugh Young was asked if he would like to invest in LIC IPO? So he said that it is too early to say anything on this. Many things can happen next. We are yet to work out whether we should invest in it or not. We already have a holding in the insurance space but the big question is how self-sufficient LIC will be going forward.
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