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In an interview with ET Now, Ambareesh Baliga, COO, Way2Wealth Brokers Pvt. Ltd, gives his views on the market scenario. Excerpts:
ET Now: How does one explain what happened on Friday, what spook the market?
Ambareesh Baliga: Very difficult to explain because if you look at the morning trades especially after, more or less a flat to slightly positive one, we saw the RBI policy which is more is in line with what people are expecting except for the fact that some people are expecting CRR which did not happen but even post that we saw some bump up. The markets were nearly up 1% but then suddenly you see FII selling coming and the market closes like the low point of the day. So, this market is very difficult to trade in, in fact we have been asking our clients to actually stay out unless of course you have the real convictions in the stocks which we were buying. You have money to buy that stock later at much lower price yes then go ahead and buy otherwise just stay out of the market.
ET Now: In rupee we have seen a breach of 54 this time around, on Friday with regards to what the RBI did overnight we did see some strength coming in does it seem like that could give a very easy exit to FIIs who had been waiting on the sidelines to just exit and any high?
Ambareesh Baliga: Possibly and the sell which we saw on Friday by the FIIs this could be one of the reasons because if they are sold when the rupee was about 53.70, 54 plus possibly they would have got much lesser dollars. so, in fact this was an opportunity for them to exit so this could be the reason.
ET Now: Post the policy what would you do with the entire banking pack now and given the kind of price to book ratios that most of these counters are trading at would it be a good time to start nibbling in and take that contra call?
Ambareesh Baliga: One should be taking a contra call in the banking's case because clearly going ahead over the next three-four months we see the interest rate cycle moving down and that should be positive for the banking space. But again like what I said earlier the way the markets are, it is possible that most of these banking stocks you could also get possibly like levels which are much lower than where they are right now. So, basically if you are buying today, you should have enough money and conviction to buy at those lower levels.
ET Now: Your thoughts on both the spaces cap goods how much more pain, would it be mix sense to start nibbling into these stocks and what about names like Unilever will they continue to outperform and for how long?
Ambareesh Baliga: Capital goods like I have been saying earlier yes surely time to nibble-in but then the way they have fallen already 50% it is possible that you could see L&T at levels of 900-950. BHEL possibly another 20% lower but then one cannot be too sure whether you will get it at those levels or not so yes it is time to nibble in, because going ahead possibly after a gap over the next three-four months you will again start seeing possibly the order flows again starting off. And again if you are talking of HUL and at this point if one has HUL possibly hold on for the time being because that is going to outperform the market. At the same time once you see the markets again getting back in shape possibly that should be the time to exit HUL and look at stocks which start moving.
ET Now: Would that be true for Cipla as well as Dr. Reddy's from pharma names as well?
Ambareesh Baliga: Yes, surely stock like Cipla really has not gone anywhere. It has just stayed where it is in that band because of which you are seeing outperformance.
ET Now: How just one tactically position themselves for the entire IT pack because of the sensitivity that it has to the currency?
Ambareesh Baliga: Basically, there are two things to be looked at IT one is the business environment, the second is the currency movement. And currency movement at least about 54 is already discounted in the price of most of the IT stocks and if you were looking at the business environment clearly does not look too good because of the slowdown in the Eurozone and US. So the way things are at this point of time, I will surely not buy IT. I would look at those higher levels to possibly exit to a certain extent.
ET Now: What about metals because of the high beta nature and what is happening globally as well would it be just prudent to stay away from that?
Ambareesh Baliga: Metals yes people should stay away because clearly the way their prices are going and also the sort of a slowdown which we expect to happen in China the metal prices will seek lower levels so surely one should stay out of this space.
Visit http://indiaer.blogspot.com/ for complete details �� ��
In an interview with ET Now, Ambareesh Baliga, COO, Way2Wealth Brokers Pvt. Ltd, gives his views on the market scenario. Excerpts:
ET Now: How does one explain what happened on Friday, what spook the market?
Ambareesh Baliga: Very difficult to explain because if you look at the morning trades especially after, more or less a flat to slightly positive one, we saw the RBI policy which is more is in line with what people are expecting except for the fact that some people are expecting CRR which did not happen but even post that we saw some bump up. The markets were nearly up 1% but then suddenly you see FII selling coming and the market closes like the low point of the day. So, this market is very difficult to trade in, in fact we have been asking our clients to actually stay out unless of course you have the real convictions in the stocks which we were buying. You have money to buy that stock later at much lower price yes then go ahead and buy otherwise just stay out of the market.
ET Now: In rupee we have seen a breach of 54 this time around, on Friday with regards to what the RBI did overnight we did see some strength coming in does it seem like that could give a very easy exit to FIIs who had been waiting on the sidelines to just exit and any high?
Ambareesh Baliga: Possibly and the sell which we saw on Friday by the FIIs this could be one of the reasons because if they are sold when the rupee was about 53.70, 54 plus possibly they would have got much lesser dollars. so, in fact this was an opportunity for them to exit so this could be the reason.
ET Now: Post the policy what would you do with the entire banking pack now and given the kind of price to book ratios that most of these counters are trading at would it be a good time to start nibbling in and take that contra call?
Ambareesh Baliga: One should be taking a contra call in the banking's case because clearly going ahead over the next three-four months we see the interest rate cycle moving down and that should be positive for the banking space. But again like what I said earlier the way the markets are, it is possible that most of these banking stocks you could also get possibly like levels which are much lower than where they are right now. So, basically if you are buying today, you should have enough money and conviction to buy at those lower levels.
ET Now: Your thoughts on both the spaces cap goods how much more pain, would it be mix sense to start nibbling into these stocks and what about names like Unilever will they continue to outperform and for how long?
Ambareesh Baliga: Capital goods like I have been saying earlier yes surely time to nibble-in but then the way they have fallen already 50% it is possible that you could see L&T at levels of 900-950. BHEL possibly another 20% lower but then one cannot be too sure whether you will get it at those levels or not so yes it is time to nibble in, because going ahead possibly after a gap over the next three-four months you will again start seeing possibly the order flows again starting off. And again if you are talking of HUL and at this point if one has HUL possibly hold on for the time being because that is going to outperform the market. At the same time once you see the markets again getting back in shape possibly that should be the time to exit HUL and look at stocks which start moving.
ET Now: Would that be true for Cipla as well as Dr. Reddy's from pharma names as well?
Ambareesh Baliga: Yes, surely stock like Cipla really has not gone anywhere. It has just stayed where it is in that band because of which you are seeing outperformance.
ET Now: How just one tactically position themselves for the entire IT pack because of the sensitivity that it has to the currency?
Ambareesh Baliga: Basically, there are two things to be looked at IT one is the business environment, the second is the currency movement. And currency movement at least about 54 is already discounted in the price of most of the IT stocks and if you were looking at the business environment clearly does not look too good because of the slowdown in the Eurozone and US. So the way things are at this point of time, I will surely not buy IT. I would look at those higher levels to possibly exit to a certain extent.
ET Now: What about metals because of the high beta nature and what is happening globally as well would it be just prudent to stay away from that?
Ambareesh Baliga: Metals yes people should stay away because clearly the way their prices are going and also the sort of a slowdown which we expect to happen in China the metal prices will seek lower levels so surely one should stay out of this space.
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