Financial Daily from THE HINDU group of publications
Wednesday, May 31, 2006
Financial Daily from THE HINDU group of publications Wednesday, May 31, 2006 |
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Markets
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Interview Nilanjan Dey
MR JAYANT MANGLIK of RR Equity. Kolkata, May 30 If you are an equity investor, typically one with a short-term vision, chances are that recent developments on the stocks front have already spooked you. Or so feels Mr Jayant Manglik, Senior Vice-President, RR Equity Brokers. "We are now trying to get our clients back to the trading mode", he told Business Line. Excerpts. Investors have lost wealth when the index declined sharply from the 12,000-points level. With this as the backdrop, what has been your strategy? Yes, a whole lot of people did lose money when the market fell from its recent high. They are now looking for a clearer direction to emerge. From the feedback we have received, it is clear that investors who saw valuations come off significantly are trying to figure out why this happened; they are also seeking a quick way out of the situation. Now, for the benefit of these people, we are reiterating one or two points. First, the so-called India story is quite intact. Not much seems to have changed between then and now. Second, it is the emerging market funds that have pulled out with certain gusto. It is not that all FIIs have exited. Those who are serious about India are still aware of its longer term potential. Incidentally, we still feel that corporates will on an average continue to do fairly well on the performance front in the coming days. How do you think should investors now approach the market? People who are searching for the right exit routes will have to be patient for some time. And even as they wait for things to settle down, they will need to pay attention to the trends that emerge. Most investors now want a positive trigger to determine the direction of the index. However, we are currently witnessing a perplexing scenario — negative news is being assigned a lot of premium, while positive developments are largely being discounted. This may not make things easy for everybody. Is there any sector that you want people to avoid? Well, there have been property plays of all hues in recent times. Some of it was plainly unseemly. We want investors to be extremely careful when they latch on to real estate. In many cases, prices (of real estate counters) did flare up to great heights. One has to see whether such valuations are sustained in the times ahead. Is there any sector that one should be overweight on? Let me just say that metals look promising. Now, I know that the metals index has lately seen a marked decline. Investors should be stock-specific when it comes to their allocations in this space. There might be shortages all right in the spot market... but overall, demand is still high. How is RR Equity positioned at the moment? We are expanding to get a greater national footprint. RR now operates from about 70 locations and we hope to scale it up considerably by the year-end festive season. We are, incidentally, using sister firm RR Commodities to gain entry in certain new markets.
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