As we come to the end of 2019, we get you the India 2020 outlook from two big market voices. CNBC-TV18’s Nimesh Shah help us with a point by point comparison of what Credit Suisse Group AG's strategist Neelkanth Mishra and Morgan Stanley's managing director Ridham Desai expect from India in the coming year.
The views are slightly contrasting. From an overall growth point of view, Mishra believes that the growth momentum is likely to worsen going into 2020. However, Desai on the other side feels that India is likely to outperform the emerging markets (EMs) on the back of improving growth and attractive valuations. So there seems to be a bit of a dichotomy in the views of both of them.
However, both Credit Suisse and Morgan Stanley believe that government’s action needs to continue for the country to do slightly better both on the macro front and on the equity front.
From market's point of view, Credit Suisse believes that the narrow market performance is likely to continue till the mid of next year, whereas Morgan Stanley believes that value and growth are likely to beat quality and midcap and smallcap is likely to beat large caps going into 2020.
In terms of individual sectors, Mishra is overweight on sectors like financials, telecom and utilities and metals, whereas Desai is overweight on consumer discretionary industries and financials. So the financials work out as overweight for both Credit Suisse and Morgan Stanley.
In terms of neutral sectors, Credit Suisse is neutral on IT, pharma and staples, whereas Morgan Stanley is neutral on sectors like telecom, consumer staples, utilities and energy.
In terms of underweight sectors, Credit Suisse is very underweight on consumer discretionary, cement and industrials, whereas Morgan Stanley is underweight on pharma, technology and material.
So to sum up, Credit Suisse and Morgan Stanley slightly contrast in terms of growth outlook. But both believe that government needs to do something in terms of macroeconomic growth but in terms of sectors, in terms of overweight, the biggest theme is financials is likely to continue to be an overweight sector going into 2020 as well.