Business Daily from THE HINDU group of publications
Thursday, Nov 23, 2006
ePaper
Business Daily from THE HINDU group of publications Thursday, Nov 23, 2006 ePaper |
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Markets
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Interview N.K. Kurup
MR S. MUKHERJI
Mumbai , Nov. 22 Despite market meltdown in May, high crude prices and initial monsoon jitters, India has garnered FII inflows of $8.18 billion so far in the current calendar year. If the trend continues, the year may well end with an aggregate inflow of no less than $9.5 billion. This may be marginally lower than the last year's over $10 billion; but the Indian market has offered a return of 19 per cent so far in the current fiscal, higher than in many other emerging markets. Mr S. Mukherji, Managing Director and CEO of ICICI Securities Ltd , says that one important aspect of the Indian market, as compared to its peers, is that its performance is backed by a vastly diversified corporate sector. The slump in any one sector or in the price of any one commodity would not drag the market down unlike the market in Brazil or Russia. This and related positive factors, he says, will help sustain global investment interest in the Indian market. Mr Mukherji, just back from the US after hosting I-Sec's annual conference `India Unlimited' for fund mangers and CEOs in New York, is optimistic that global investors will continue to be bullish on India. "Where else, other than in India, would investors find a better investment opportunity?" This view was shared by many global investors during the conference, he said. Foreign investors are no longer worried about the so-called poor infrastructure, delay in decision-making or the uncertainty over economic reforms. They realise that nothing can now stop India's economic growth. "From here on, India Inc can only get better," says Mr Mukherji. In an informal chat with Business Line, Mr Mukherji spoke on the current market trend. Is the current rally in the equity market broad-based? Yes, more or less. Both large cap and mid-caps have gained considerably. The growth in the index is based on solid fundamentals. Corporate earnings are good. Interest rate, though hardened a bit recently, has been stable. Inflation is moderate. Overall, the GDP growth continues to be more than 8 per cent. Are retail investors active? Participation of retail customers is increasing exponentially. Our own retail broking business ICICIdirect.com has more than one million customers, and we process more than 3,00,000 orders per day. Are the current valuations attractive? Valuations are closer to the current market prices. Our research team expects fiscal 2008 to reflect the slowest earnings growth in the current cycle that peaked in 2006. But then, the outlook is equally strong for the next earning upswing to begin 2009 onwards. Where do you see the Sensex heading? Sensex is just a barometer of all that is happening in India Inc and the Indian economy at large. The issue is not so much as when the Sensex will reach what levels. The critical element is the inherent growth story of India, which I believe is not just strong and broad-based but has also acquired certain unstoppable momentum. It is this growth that is reflected in the rising stock prices.
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