Investors Should Look At Markets, Economy With Same Prism, Says Prateek Agrawal

At a time when a number of investors are questioning the disconnect between high-riding equity markets and Covid-19 disrupted economies, Prateek Agrawal says investors must look at both markets and national GDP through the same prism for proper perspective.

The markets are fairly in sync with the economy, the chief investment officer of Ask Investment Managers told BloombergQuint’s Niraj Shah in an interview. When the economy was down in the first quarter, markets were down too. Now that companies have returned to profit and the economy is rebounding, it is natural for markets to perform too, he said.

“I’m not in the camp which says markets have moved up faster than the economic rebound.”

Agrawal sees a further upside to the market on the back of higher power demand, low-interest rates and expectation of a better third quarter.

Here are other key points that Agrawal made:

• Speciality chemicals segment remains a positive space to invest in despite the upcoming consolidation phase.
• Pharmaceuticals look good with Covid-19 exports being an “advertisement” abroad for the Indian drugmakers.
• With information technology, valuations may be an issue although business momentum will be strong over the next few years.
• Agrawal favours consumer discretionary and financial stocks and thinks the next big move is to move money out of technology stock into these sectors.
• Demand and spending helping the consumer discretionary segment.
• There is a value transfer in banking stocks happening for a long while from not-so-good financial entities to significantly better ones—be it public or private sector.
• There are only three to four quality names in the financial sector.
• Agrawal said at ASK Investment managers, they prefer to seek and invest in stocks which are of high quality and growth.

Watch The Entire Conversation Here: