ETMarkets Smart Talk: insights from Manis on Markets, Earnings, and Investment Strategy
In a recent interview with the Economic Times, Manis shared their perspective on the current market landscape, recent earnings reports, and potential investment opportunities. Here’s a breakdown of the key takeaways:
On US Rate Cuts & RBI policy:
While acknowledging the influence of US Federal Reserve policy on indian interest rates, Manis believes the primary driver for Indian rates will be the significant improvements in both the current account and inflation outlook. The current account is nearing structural balance, and inflation has not only decreased but also become less volatile compared to the last decade. This suggests a potential trend of lower long-term interest rates in India.
Earnings Season Review:
The recent earnings season for Nifty50 companies has been characterized as neither exceptionally strong nor weak. The focus now shifts to the impact of domestic fiscal and monetary stimulus on medium-term consumption strength. Positive signs are emerging in sectors like automobiles,and optimism surrounds potential developments such as reduced US-India tariffs,Pay Commission recommendations,and continued rate cuts.
Potential Risks to Watch:
Looking ahead, Manis identifies two primary global risks. The first is the historically low level of credit spreads globally; a credit market disruption could trigger a “risk-off” habitat. The second is the considerable capital invested in Artificial Intelligence (AI) – a failure of AI adoption to meet expectations could put significant investor funds at risk.
Attractive Sectors:
Manis highlights several sectors as currently attractive:
* Lending Financials (Banks/NBFCs): Despite concerns about credit costs, they anticipate a domestic economic recovery and improved household balance sheets (supported by increased gold holdings) will mitigate potential credit risk.
* Tech Platforms: They are interested in tech platforms where market capitalization remains relatively low compared to their potential addressable market.
* Affluent Consumption: This sector is viewed as a strong, ongoing structural growth story.
* metals: metals are identified as an engaging tactical opportunity.
New Listings & IPOs:
Manis maintains an open mind towards new listings, acknowledging the limited information available compared to established companies. However, they are willing to consider IPOs if the risk-reward profile is favorable. They emphasize that a generalized preference for primary versus secondary markets isn’t sensible, advocating for individual evaluation of each investment opportunity.
Precious metals Allocation:
From their perspective, a reasonable allocation to precious metals makes strategic sense.
Disclaimer: The views and opinions expressed by Manis are their own and do not reflect the views of the Economic Times.
