Indian Markets May Rise 100-150% Over The Next 10 Years: Vallabh Bhanshali
Vallabh Bhanshali terms demonetisation a success despite the near-term chaos.
Veteran investor and chairman of the Enam Group, Vallabh Bhanshali, sees the Indian equity market rising by as much as 100-150 percent over the next 10 years.
In a conversation with Madhusudan Kela, chief investment strategist at Reliance Capital during an event organised by Axis Capital – ‘India - The Way Forward’ – Bhanshali said that an investor must remain gutsy and alert in order to use dips in the market as buying opportunities.
The Demonetisation Aftermath
The withdrawal of the high-denomination currency notes by the Narendra Modi government resulted in a severe cash crunch in the country, affecting both businesses and consumers. Bhanshali however, called the move a success. He believes “every rupee now has an address,” and that the real impact will be seen only in the next 3-5 years.
The next step is digital. Digital leads to data, data leads to data analytics that leads to market segmentation, market expansion among many other things. This will give a tremendous boost to the organised sector.Vallabh Bhanshali, Chairman, Enam Group
While the strength of the Indian rupee remains crucial, a victory for the Bharatiya Janta Party (BJP) in the upcoming assembly elections in Uttar Pradesh will ensure that reforms in the pipeline are fast-tracked, he added.
The Eventual Success Of GST
The Goods and Services Tax (GST) moved a step closer to reality on January 16 when the GST Council ended the deadlock over the contentious issue of dual control – or the division of assessees between states and the Centre.
Despite implementation hurdles and near-term pain, Bhanshali expects the tax reform to be a success, depending on the manner in which it is implemented.
I think eventually it will be a big success. To expect that there will not be any pain once it is implemented will not be right. In the initial years, if it is administered well, it might prove to be less painful then expected.Vallabh Bhanshali, Chairman, Enam Group
Factors For A Better 2017
2016 was an extremely volatile year for the global equity markets. Britain decision to exit the U.K. and Donald Trump’s surprise victory in the U.S. presidential elections roiled equity markets across the globe. Back home, the demonetisation led brokerages and economists to cut growth forecasts drastically.
Bhanshali believes that a greater role for the organised sector, rebound in global growth as well as the return of the commodity cycle will be some of the key factors which will make 2017 a better year than 2016.
While I don’t think that oil prices will shoot up to $80, the reversing trend currently seen in metals and oil is a very healthy trend.Vallabh Bhanshali, Chairman, Enam Group