In an interview with ET Now, Mihir Doshi , CEO, Credit Suisse India , talks about the markets and says that people love to be optimistic on India from a longer-term perspective. Excerpts:
What is your take on the markets?
Indian markets have gone into a consolidation phase. People love to be optimistic on India from a longer-term perspective. The flip side is that there are headwinds, may be because of oil, inflation and political situation. So net-net, the markets are not really going too far from these levels and if anything, probably a bit negative.
What is making you negative? What is going on in the market's mind?
Inflation and higher interest rates are clearly playing up in investors' minds. Also, how focussed is corporate India on investments, are they getting distracted by the events in the country right now, are they slowing down, will we see a slowdown in investments and will high interest rates have a knock-on affect on earnings going forward? The perspective clearly is this concern.
As a banker, are you getting worried about corporate India? Is the investment cycle taking a knock?
Not yet. From a very short-term perspective, yes and if you look at the capital market calendar, for example, the equity capital market calendar in India has dried. So as a banker who is trying to do deals, it is a fear that things are going to be slow in the next couple of months. However, having said that take our own example, we successfully tapped the bond markets for a couple of clients in the last few weeks. It is a balance. From an equity market perspective, yes, I am concerned, but it is not as if I am overly concerned.
What is the signal coming from the global markets? Is the money flow still around and if it is, is it moving towards or moving out of India?
As the numbers show, the money flow has been fairly non indicative of optimism. It is kind of neutral. We had negative, then we turned positive, again it is partly negative at the end of last month. The global events are probably the bigger concern actually, maybe Greece, the US environment, unemployment concerns people. The perception and the hope is that if the developed markets struggle, emerging markets again will re-emerge as the opportunity for investor and we will see money coming back.
Why do I get a feeling that this theory may not hold this time?
It has not. Your feeling is a function of the fact that in the last 6 months, money has actually gone back. The perception for the US is that we have had some weak numbers in the last couple of months, but net-net, there is cyclicality. Growth is happening, opportunities are back in the states leaving aside maybe the Eurozone Greece specific, which obviously needs to get its act together.
source-moneycontrol
Steven
Management trainee-fundamental analyst
DENIP Consultants Pvt Ltd
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