Andrew Holland, Chief Executive Officer at Avendus Capital Alternate Strategies, believes the global economy will pick up.
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"We have taken more of a barbell approach to the market where we have had some of these defensives. But the larger weighing on the barbell is towards industrials, banking, energy, consumer discretionary because we do believe that the global economy will pick up. There might be a few hiccups along the way and India will enjoy strong growth,” he said.
On IT stocks, he stated, “We have quite a number of IT stocks overall because we feel that the momentum for these stocks is – in terms of both their earnings and the tailwinds in terms of what is happening globally – going to continue to push earnings a lot better than the market expects. That is where you are going to continue to get earnings surprises. It is a barbell approach in terms of largecaps to midcaps within the IT sector as well.”
He likes housing sector. “We think that is going to continue to do well. Housing will pick up,” he said.
Holland also expects auto companies to continue to do well.
“Metals will continue to do okay as the economy picks up,” he pointed out.
“The problem that I see in Europe, which is stopping Astrazeneca drug means that Europe could go further back into a double-dip in terms of growth which would make a laggard in the world in terms of growth and the pickup which has implications. The dollar might strengthen against the Euro,” he said.
“The biggest concern now is if real rates start to rise with all the debt that is out there not just in the US but also in Europe as well, it will have a big impact on corporates,” he added.
He believes oil prices may remain higher for longer. “That would have an impact on the Indian deficit, the borrowing programme by the government. The markets are a little bit more worried about that,” he stated.
For full interview, watch the video.