Kamal Manocha, Founder and CEO, PMS AIF World Had a long conversation with Moneycontrol on the country’s economy, market and country-world conditions. In this conversation, he said that after the attack on Ukraine, sanctions imposed on Russia by Western and some Asian countries will not reduce this tension.
Significantly, the geopolitical tension caused by Russia and Ukraine has put tremendous pressure in the markets all over the world during the last few days. Kamal Manocha has over 15 years of experience as an Investment Advisor. He said that in the current downturn of the market, bet on such companies whose brand equity is very strong and with whom the consumer has a deep bond. Such companies will be more able to deal with inflationary pressures by adopting price hike measures. With the passage of time, inflationary pressure will ease and margins of companies will increase due to increase in prices during this period.
Talking about the tension between Ukraine and Russia, he said that Ukraine wants to join the NATO organization. He feels that by doing so he will be able to preserve his freedom. Russia is opposing it. He said that the sanctions imposed on Russia will not affect it. He further said that Russia is an economy of $ 1.8 trillion. It has foreign exchange reserves of 600 billion. Most of its reserves are in the form of gold. Russia is very important from the point of view of global economy. It is the third largest crude oil exporting country in the world. It is the second largest gas producing country in the world.
About 40 percent of the gas produced from Russia is exported to European countries and 20 percent of that gas is distributed through gas pipelines from Ukraine. In such a situation, the economic and non-economic impact of this fight can be very deep and this tension can be resolved only through dialogue and this is the only way.
Markets fell more than 3% last week amid Russia-Ukraine crisis, FII sell-off continues
Talking about Ukraine-Russia tensions and the rise in crude oil prices due to this, there is every possibility of crude oil price going above $100 per barrel in 2022 as long as crude remains in the range of $100-120. India will be able to deal with this situation with little trouble, but if the price of crude oil goes above $ 120 per barrel, then the situation will look deteriorating and the country’s trade deficit will also increase. If oil prices reach $125 a barrel, India’s trade deficit can go up to $140 billion.
On the recent volatility in the market, he said that the market cap has nothing to do with geopolitical tensions. The choice of large, mid and small cap stocks depends more on the investment horizon of the investors. In general, investing in smallcaps with a tenure of more than 7 years should be considered. On the other hand, a period of 5-7 years in midcap is considered to give the best returns, whereas in largecap the investment period of 3-5 years is considered very good. But in case the market is more volatile, focus should be more on largecap stocks as they generally show less downside in the event of heavy volatility. Last year mid and smallcap have given double return as compared to largecap, so if the investment period of an investor is not 5 -10 years then he should invest in large cap.
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