The global market is plagued by and persistent turbulences. Bloomberg TV India caught up with Nilesh Shah, Managing Director, Kotak Mahindra Asset Management, who shared his views on markets and commodities.

The markets in the last couple of days have been seeing some relief. But the big question is whether or not it’s here to stay. What’s your sense in terms of the kind of direction we are looking at now to go ahead?

From a valuation point of view, markets have become cheaper by about 15 per cent compared to what they were probably one-and-a-half months back. Now, how much is the downside, how much is the upside? Today, it looks like it will be a positive day. But if we see the fundamentals, things seem to be falling in line for India.

From a bottom-up stock picking point today, after the correction, certain stocks in various sectors have become fairly attractive. So overall, I don’t know what will happen in the near term. But I think if investors catch the falling knife over here, over the next six-eight quarters they should be able to generate positive returns.

Jim Rogers recently said he has actually gone out of the Indian equity market. How do you convince investors out there?

We have to convince investors and not traders. Let the traders take their call on their own.

Now, clearly today if we compare India with global peers: Russia is down with oil shock and their currency is down 48 per cent; Brazil is in recession; China has created its growth through credit and now it is paying the price; Indonesia, Turkey and Mexico are facing domestic headwinds. We have a great opportunity with fiscal deficit under control, current account deficit under control, inflation falling, growth reviving, the government spending money, and the interest rates expected to come down.

If we are seeing India so attractive, then why are FIIs selling? First, I think the selling is lead by sovereign funds which need to pump money into their domestic economy. The second is related to exchange traded funds. They will go by the global media, which says that emerging markets are slowing down.

So, it is the dumb money which is leaving the country. But the smart money, I am sure, is doing bottom fishing at this point of time. On Tuesday we were at the Investors’ Conference and some of the investors whom we met were clearly far more positive on India than Corporate India itself.

Related Topics