The Hindu Business Line : ‘We are more global than what we like to think’

“If a five-year view does you no harm, do take a clear call,” contends Mr Vikaas M Sachdeva, Country Head – Business Development, ING Investment Management (India), in an interview to Business Line.

Excerpts.

Is the average investor caught between a runaway, volatile equity market and a debt market that seems set for a turnaround?

It all boils down to diversification over asset classes and the way an investor has actually pursued his diversification strategy. If he is disciplined enough, he will keep rebalancing its allocations, factoring in events and emergencies. He will probably tilt slightly more towards debt if he is weighed down by equity.

Conversely, he will probably take more equity in his portfolio if he feels far too burdened by debt. Mind you, these are open blue skies for the equity investor – no one has navigated through such buoyant conditions before. And as for the question of turnaround on the debt front, this may be a little too early to discuss a major change.

In the days ahead, what will prompt a new equity investor to put in fresh money? Remember, stocks have already gone places.

If you consider the way the markets are structured and the kind of investing habits people have developed over the years, you will no doubt agree that there is a marked preference for debt. Investors, at least some of them, have far too much debt, especially things like bank deposits. Now, for someone who has only deposits and nothing else, it may make sense to look at more lively assets. However, this may not be done straightaway. I mean, do not let him sail into stocks, as if it is the very last thing he will ever do. What are the key factors that will encourage investors to look at alternatives like real estate?

Alternatives are here already. But their sphere of influence is very limited. One way of looking at it is to find out whether Indians are eyeing global assets. And I can tell you that large, savvy investors are now trying to find out what the international markets can do for them. Real estate will play a decisive role here.

We have also seen how certain distribution houses are approaching clients who wish to hold assets overseas. Significantly, all this would not have been possible if the government had not encouraged the idea of overseas investments.

Do you agree that a sharp and sustained decline could come sooner than when most people expect?

Well, this is what I would like to argue: We are more global than what we like to think. The assumption is that there is a set of crucial, positive issues, many of them originating internationally, which can further spur the Indian market. The latter is now clearly growing, courtesy factors like corporate profitability and infrastructure spending.

India, compared to a few others, scores well in terms of corporate governance, depth of the market and so on. At the same time, let me say that there is indeed a bunch of worrying factors. Oil prices, for instance, are to be watched at all times. Keeping this aspect in the backdrop, we are telling people to take a longer term view.

More Stories on : Interview | Stock Markets | Debt Market

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
FMPs have become powerful category in recent days

Sensex well poised but…

MTNL, VSNL score handsome gains

Croupier Prive set to buy 5% stake in CDSL

‘We are more global than what we like to think’

Today's Pick: Alstom Projects (Rs 1,021.35)

Day Trading Guide

Firm Sensex may see sideways movement