The mayhem across global markets continue. In such a scenario what should be the right strategy to approach markets is the big question.
Gautam Shah, founder & chief strategist at Goldilocks Premium Research, Andrew Holland, CEO of Avendus Capital Alternate Strategies, Sunil Singhania, founder of Abbakkus Asset Management, S Naren, ED & CIO-Equity at ICICI Prudential AMC and Sanjay Dutt, director of Quantum Securities spoke at length about the way forward in an interview with CNBC-TV18.
Shah said, “This is a first, historic, unprecedented down move; 2008 was a financial crisis and 2020 is an existential crisis and that’s the reason the market is trying to discount the worst very quickly.”
“It almost seems as if the market knows a lot more than we all do because the kind of weakness that we have seen and the manner in which some support levels have been broken in the last one week, it’s quite baffling,” he added.
In such a scenario, Holland said staying on the sideline is a safe bet given that its news flows that’s pushing market and fear. He further said that companies will have a cash flow and payment problem due to COVID-19 disruption.
Die hard optimists like me are finding it difficult to invest until stability returns, said Singhania. “These are unprecedented times and even in my 25-30 years of being the market, we have not seen the kind of market which we have seen now. Right now the question is to keep your family and yourself safe and then try to bottomfish,” he added.
“We are also in that camp where we do not want to put too much of money to work because there is not much left. At the same time, keep on evaluating the stock, keep on talking to companies, keep on looking at the environment. We are looking at India but the world is also falling as rapidly and from a global investors’ perspective, they have a choice which is outside of India too. So we have to take everything into consideration before we say it’s the bottom,” added Singhania.
According to Naren, "Whether markets go lower or not, every investment guru says you have to buy in panic and we have panic and how does it matter whether the market goes down another 1-2 percent or it goes up another 5 percent."
"I think we are in panic, valuations are comfortable and if you have got comfortable panic and valuations then why do you have to worry what happens to the market in the next one or two days," said Naren
“From a macro point of view there is a lot of scope for India, to do a lot of things at this point of time. There is clear requirement for bringing down risk-free rates temporary by making very big rate cuts, oil is at USD 25 per bbl, we have a situation where everywhere else in the world rates have been brought down very significantly and overnight. The fact is that India is sitting on USD 480 billion because of brilliant action by the RBI and the government,” added Naren.
According to him, India has enough foreign reserves to make use of right now and the entire macro environment is extremely favoruable for India.
Dutt said that today it’s not about equity markets; today, it’s about the forex markets, CP bond markets, there is complete dislocation there. “This is not the time to redeem mutual funds etc., in fact this is the time to allocate some more to SIP if you have some spare cash, but it’s important to continue SIP even if you don’t want to allocate more,” he added.