Indian fund managers seem optimistic about the Indian equity markets provided the Government continues with reforms. Speaking at the sidelines of the Morningstar Investment Conference, fund managers from India's leading mutual fund houses said volatility in the equity markets was an opportunity.
“Market behaviour depends on macroeconomic conditions. If the Government manages to improve these conditions, we are headed for a good peak,” said Sankaran Naren, Chief Investment Officer, ICICI Prudential Mutual Fund.
‘Bottomed out’
Talking about the growth outlook for the coming year, Kenneth Andrade, Head Investments of IDFC Mutual Fund, said: “Economic and corporate growth has bottomed out. Even if we have a GDP growth of 5-6 per cent, market will still grow in double digits but on the lower side and corporate earnings will be in single.”
The session on ‘Stock Market Outlook: 2013’ discussed various issues plaguing Indian economy and the equity markets. According to Singhania, oil prices and global liquidity were the two near-term concerns that would likely to impact the equity markets. “A sharp fall or sharp surge in oil prices will have a significant impact. Liquidity in global markets will have to be watched as it is a reflection of the pain being mitigated and vice versa.”
On the domestic front, Naren said loss of enthusiasm for equities among people was a big concern. “Equities have become a small part of asset class. We have moved from an equity culture, seen during the 90s up to 2007 to more of a real estate and gold culture.”
“Valuations are still 20 per cent lower than historical levels. So when valuations are low, investors are should start investing in equities,” said Prashant Jain, Chief Investment Officer, HDFC Mutual Fund. Fund managers agreed that knowledge-based industries like IT and technology, pharmaceuticals and consumption-based sectors are likely to do well in the coming four to five years.