Signage for the Bombay Stock Exchange (BSE) is displayed next to a bronze bull statue at the entrance to the BSE building in Mumbai, India (Photographer: Prashanth Vishwanathan/Bloomberg)  

Hardly Any Sectors Available At Attractive Valuations, Says Nilesh Shah

Investors entering expensive stocks at current levels need to prepare for a period of low-to-negative returns, according to Nilesh Shah, managing director of Kotak Mahindra AMC.

“I think there might be value in specific stocks,” Shah told BloombergQuint in an interaction. “But there are hardly any sectors where valuations look attractive when it comes to long-term returns.”

Here’s a quick take on the views Shah expressed over different issues:

On Global Markets

  • Global markets are heavily polarised.
  • Global market rally driven by quantitative easing by various central banks.
  • Immense liquidity has created an atmosphere of risk-taking.

On Corporate Earnings

  • Most of the first quarter earnings were in line or ahead of expectations.
  • Earnings showcase the fact that the economy is maintaining growth momentum.

On Fund Flows

  • It would be wrong to say that only flows are driving the markets higher.
  • Markets would have witnessed a correction if rally was only driven by flows.
  • Flows coming with a hope of economic growth.
  • Cannot take flows for granted until economic reform and earnings growth is maintained.

On Banking Sector

  • Investors have lost interest in corporate-oriented banks.
  • Preference more towards retail-focused banks.
  • Recognition of Rs 3.8-lakh-crore worth of bad loans is a step in the right direction.
  • Need to bring transparency in accounting to win back investors’ trust.

On Warren Buffett Investing In India

An investor of Warren Buffett’s stature investing in India is a sign that we are doing well. In my opinion, he is probably 25 years late. 
Nilesh Shah, MD, Kotak Mahindra AMC

Also read: Warren Buffett Prepares To Sign Into Vijay Shekhar Sharma’s Paytm

Watch The Full Interview Here: