Aaj Tak in CNBC-Awaaz’s special show series Diwali Se Diwali Tak Sunil Singhania, Founder, Abbakkus Asset Management Conversed. What trend can the market show in the current environment in the market or where are the investment opportunities in the market at the moment. He answered all these questions with impunity.
Sunil Singhania said that the market is waiting for the decisions of the Fed. I think that due to the crisis of Corona, the central bank of any country will not take any such decision which will put more burden on the economy and business there. That is why we believe that only a relief decision will come from the Fed. Anyway, if the Fed makes an aggressive decision, it is already discounted by the market. However, there is also a possibility that the FED may raise rates.
Singhania further said that the results of the companies in the second quarter will be mixed. The results of some companies have been affected due to increase in the price of raw material, coal, diesel and petrol. Now the festive season is coming in front, the demand is very good, the sale is good, so in the next 2 to 3 quarters, the market can be very bright. At present, the market environment is good.
The way of working in government companies is different, but now such companies are also changing because the government is focusing on disinvestment. There the minority share holders are given less attention but in the case of IRCTC we have seen that the government is now serious and in action mode towards the interests of the minority share holders as well. Therefore, we will keep an eye on such companies going forward, but at present we do not have much exposure in government companies.
Do not invest by looking at last year’s returns
Taking the conversation further, Sunil said that last year everyone has been given good profits in the market. But don’t invest in overindulgence to get last year’s profits. Now the market environment seems to have changed a bit. So invest wisely or else you may be disappointed.
Not too excited about PSB for long term
Singhania further said that we are not very excited to make profit from public sector banks for the long term, although money can be made in select public sector banks. The way of functioning of public sector banks has changed, so investment opportunities are being created in good banks and NBFCs. But at this point in terms of investment in public sector banks, we have investment in the largest public sector bank followed by the second largest bank. We have kept distance from the rest of the public sector banks.
Underweight about realty
Giving his opinion on the realty sector, he said that we are underweight in the realty sector. We prefer realty related sectors like cement, furniture like space more than pure realty stocks. Investment opportunities are being created in cement companies and furniture material makers. We also like good companies taking contracts with construction material companies.
Great potential for growth in IT and digital space but stay away from new IPOs
On the IT sector, Sunil said that IT companies have given good results. Many companies have done well. Good growth is expected in the IT sector going forward. Along with this, there is a lot of hope for growth in the digital space. But there are many stocks in this whose prices have increased a lot, so one should be careful while selecting them and make a position in selected IT stocks. Digital has good potential but we are not comfortable with the valuation of the new IPOs that are coming in this regard. That’s why we stay away from them.
Strong capital goods, cement companies have opportunities
Sunil Singhania further said that the effect of increase in raw material and energy cost is visible on many companies. Therefore, there is a slight weakness in the profits of such companies. But even then there are opportunities to invest in strong capital goods and cement companies. We also have a positive view on construction companies that have a good balance sheet.
Need to take conscious exposure in the metal sector
The results of the steel sector have been good. We have a positive outlook on the steel sector. Some companies have improved their balance sheets. Many companies have become very big. It has done well on the sector, so there is a need to take conscious exposure to the metal sector, said Singhania.
(Disclaimer: The views and investment advice given on moneycontrol.com are the personal views and opinions of investment experts. Moneycontrol advises users to consult a certified expert before making any investment decision.)
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