Among a raft of topics, Jhunjhunwala spoke on the NBFC issue, the economy of the country and the recent rift between the government and the Reserve Bank of India (RBI).
Here are the top 10 things from his interview:
Jhunjhunwala has always been bullish on the Indian market and said that he will continue to do so even though oil and rupee have been the biggest factors for the recent market decline. He added, the market has been doing well and said 'we have seen a huge rally in the last few years'.
Taking forward from the troubles the markets faced from a falling rupee and rising oil prices, Jhunjhunwala said, "The rupee has to stabilise between 70 and 75 against the US dollar and we will see a big downward correction in oil, expecting it to stabilise between $65 and $70 per barrel."
On the bond market, Jhunjhunwala said the 10-year bond yield is likely to have peaked and on the stock market, he said that he does not see the Nifty slipping below the 10,000-mark.
Jhunjhunwala said he does not see any credit risk in the Indian economy due to the crisis in the NBFC sector. "As a country, the need to enhance the availability of funds is towards the housing finance," the investor said.
On the recent spat between the Reserve Bank of India (RBI) and the government, Jhunjhunwala said the government has the right to have a consultative process with the central bank but added that the RBI has the right to take its own decision. "I do not think the RBI-government issue will precipitate,” he said.
For the Indian banking sector, which is seeing a continuous rise in NPAs and possibilities of mergers, Jhunjhunwala said that he is a 'big supporter of the consolidation of the banks.' "The merger of public sector banks is a positive move and it will help save costs," the top investor said.
On the second quarter corporate earnings, Jhunjhunwala said, “We were seeing the first pinch of input cost because of high oil prices. I think we will play out for another quarter and then things will ease.”
Jhunjhunwala added that the MSCI emerging markets are on the verge of making a higher bottom-higher top. At the moment it's lower top-lower bottom.
As India gears up for the general elections in 2019, Jhunjhunwala said, “It is difficult to predict because in 2004 the BJP lost the Lok Sabha elections just six months after it had won the state elections. So you can take a call only a month or 15 days before the elections. I do not think the opposition is going to unite the way they are at the moment because of the division of tickets within.”
However, he said that the market is confident that BJP will come back to power with a reduced majority maybe in a coalition. If that happens market is fine.
First Published: Nov 6, 2018 3:40 PM IST