Business

Here's what key voices from the world of business and markets told CNBC-TV18 today

Updated : December 04, 2020 06:36 PM IST

The RBI and the MPC has achieved far more than what the market could have expected. The other key takeaway is the fact that RBI is willing to give growth a chance, it is not very concerned or bothered about inflation. The RBI governor wants to develop the credit market, the bond market and also ensure that urban cooperative banks, regional rural banks and NBFCs also become part of the formal banking system. Liquidity at the lower end has helped the markets, has helped the NBFCs - that is welcome. RBI is not removing liquidity, is not in a hurry should soothe nerves.

Ashwani Bhatia, MD, State Bank of India

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First of all the declaration of policy is to continue with the sentiment that is there in the market, they have not changed anything, which is a good measure. Currently liquidity is available in the market. The expectation of RBI for the market is that there could be a credit growth in the months of December and January. That is the reason why the RBI did not want to touch upon that. In February when they will come with the policy, they will probably discuss this. I foresee that the credit growth could grow from here, it could reach up to 8 percent in the days to come.

SS Mallikarjuna Rao, MD & CEO, Punjab National Bank

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For the last 6 months we had elevated inflation but growth was decelerating. Now the RBI has got more confidence that growth is inflected. This was a substantial upgrade to its growth forecast; they forecast positive growth in the second half of the year. So, there is more confidence here that the economy is on a relatively strong recovery path.

Sajjid Chinoy of JPMorgan

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Today it is not only about the rate setting structure of the monetary policy – one of the most important roles possibly that the monetary policy has and the MPC has. The monetary policy statement therefore needs to be looked into in conjunction with a lot of other factors that are being highlighted in terms of the credit easing, the quantitative easing that not only the RBI is doing, but also the global central banks are engaged with. So, I think the whole understanding of the monetary policy therefore needs to be taken away from only the rate setting exercise into all these other issues which obviously are growth enhancing, support to the fiscal strategy and the Atmanirbhar strategy that the government has laid out.

Indranil Pan, Chief Economist, IDFC First Bank

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I would worry about the credit demand. That is where the monetary impact needs to show itself. We haven’t seen any kind of response so far. The economy and particularly the supply side is still recovering from the lockdowns and the unlocking is still taking place, it is understandable the last 6 months, but my worry is actually the exceptional easing measures starting with interest rate cuts and the TLTROs pre-date the pandemic and from early 2019 and December 2019 in particular. A lot of OMOs, everything has happened and yet there has been no response from the credit demand side. In fact we ended March 2019-2020 year with credit growth decelerating to half of that over the previous year; it was something like 6.7 percent. That is where the real concern lies.

Renu Kohli, Independent Economist

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What the market has taken a little bit of heart is from the fact that there was no mention of any kind of withdrawal of liquidity or concerns that money market rates are trading below the reverse repo rates and that seems to suggests that the RBI is therefore willing to let this run in some sense and so there is relatively tepid reaction from market.

R Sivakumar, Head of Fixed Income, Axis Mutual Fund

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There is a very interesting observation in the policy which allows the regional rural banks (RRBs) to tap the reverse repo market that is basically broadening the reverse repo market because they are sitting on significant amount of excess SLR, excess amount of government securities.

Soumya Kanti Ghosh- Group Chief Economic Adviser, State Bank of India

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I think this was something which was long due and we should understand when we talk about the RRBs, they have been two round of consolidations. These RRBs are the entities of sizeable size now and in fact having this access would really translate into giving them the greater ability on their lending side. I think it has a beneficial impact on both side, on the entity side to manage their own balance sheet in a more major way but at the same time also strengthening the lending side of their operations.

SS Mundra, Former Deputy Governor, Reserve Bank of India

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A lot of the growth in the economic numbers will revolve around the property and construction sectors and in that respect one of the best proxies would be the cement, steel and also to some extent the banks as well. Liquid markets like India will always get a reasonable flow of money coming through because of the principal direction that the emerging markets are moving.

Sean Darby, Global Head-Equity Strategy, Jefferies

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As we peep into the next year, the set up for the equity market looks still fine. The broadbasing of the market probably should continue from here as well. Given the kind of circumstances that we are in and we are coming out of a fairly difficult kind of a crisis, we don’t have a choice but to work with certain scenario assumptions as we move into 2021.

From a global standpoint, we will probably see manufacturing led economies do better and service economies probably will struggle a little bit given that in the base case, we would expect a vaccine to come sometime in the second half of 2021. There is a good chance that we see the broadbasing of the economy that we have been awaiting for the last good number of years come about during the course of 2021. Therefore, I would not be surprised if the market is broadbasing as we can see today.

Taher Badshah, CIO Equities, Invesco Mutual Fund

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Market gives you a chance and every stock comes down for some point of time for you to buy. Investors should be patient to know that they will get a chance to buy their stocks, but they must have their list ready and keep disciplined.

Ajay Srivastava, CEO, Dimensions Corporate Financial Services

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The market is catching up in terms of returns. 1999 to 2003 markets did not move anywhere. From 2003 to 2007 markets multiplied by almost 7 times. From 2007 to 2020 Nifty’s compounded return has been just 3 percent - lower than government securities. And now the market is catching up. The market is at all-time highs, no doubt about it but still it is valued at 22-24 times FY21 earnings which all of us know are depressed because of COVID. I would say that one should stay invested in equities. It is a good time to be invested in equities if you have not invested already.

Nirmal Jain, Chairman and CEO, IIFL Finance

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Paints has got another leg which is opening up. A lot of the pent up demand will come. Going forward I see strong growth coming back on the paints industry. So I think there are more legs to the paints industry as a whole

Nischal Maheshwari, CEO of Institutional Equities and Advisory, Centrum Broking

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We are eagerly waiting for the Bhushan Power and Steel (BPSL) resolution. It is very unfortunate that it is getting delayed. We are very much committed to the resolution plan. We are constantly in talks with the CoC (Committee of Creditors) to find some solution to implement the plan as early as possible.

Seshagiri Rao, Joint MD and Group CFO, JSW Steel

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Barring SBI, it’s difficult to take a call on other PSU banks because of the enormous amount of challenges that exists across other PSU banks; at best they can remain as trades and can never be taken as investment ideas. There are no two ways that in post-COVID world quality banks will continue to gain market share as they have better capital position, better management and they are good in terms of various factors, enablers in terms of gaining market share over the next 5-10 years.

Suresh Ganapathy of Macquarie Capital Securities

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The costs have been steadily going up since the quarter began in Q3 and that is going to be the trend. There was a bit of a slowdown that happened in Q1 and has the markets open up, as the demand is increasing and as productions are being ramping up there is an increasing in the input cost. We see that and it is as per what we expected. It is not a surprise for us, and there are adequate measures that we are taking to ensure that we mitigate the cost increase.

Amit Tolani, CMO, CEAT

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The absence of conversation on asset quality (in the RBI policy) suggests that there is some stability there, it’s not a risk perceived to be and at the end of the day that provides certain amount of support to the stocks rather than worrying too much about the rate cycle coming to an end.

Aditya Narain of Edelweiss Securities

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If the second wave of COVID comes, there must be inventory and with an anticipation as preservation of stock for interrupted production the market is likely to be favourable. Aluminium prices are likely to hover between $2,000-2,200 per tonne. In Q1, there was a COVID restrictions in deployment of manpower and logistic constraints, which restricted the production. NALCO is operating beyond 100 percent and we are hopeful that we will achieve more than 95 percent of previous year production target.

Sridhar Patra, Chairman & Managing Director, NALCO

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Eastern market is fairly underpenetrated and hence there is a need for cement and hence companies will continue to add capacities. On an overall basis, these expansions are largely in line with the contours that have been defined, the capex has been lower which is a good sign. UltraTech Cement is drawing good cashflow and debt reduction will continue. It is a good move overall.

Rajesh Kumar Ravi of HDFC Securities

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The east and south market are a volatile pricing market zone and this will continue. If I look from a next two-three year perspective, east market is seeing strong capacity addition. Almost 50 percent of the total industry capacity expansions are happening in east market alone. There is a strong volume momentum which will continue because of the government’s thrust of low cost housing, infrastructure built up and this is also visible in the COVID period. Companies in the east market would gain profits. Pricing will not be a profit driver in the east market because there will always be competition.

Binod Modi of Reliance Securities discussed about the impact.

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Here's what key voices from the world of business and markets told CNBC-TV18 today

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