Investors Won’t Be In A Hurry To Buy Stocks, Emkay Global Says

The markets are expected to consolidate for the next six months, according to Krishna Kumar Karwa, managing director at Emkay Global Financial Services Ltd.

“Investors won’t be in a hurry to buy stocks as they would see the stability first rather than an uptick,” Karwa told BloombergQuint in an interaction. “Big-time risk appetite will only come after general elections and not after state elections.”

Here are the key highlights from the conversation:

On Overall Markets

• The management commentary will be a key watch rather than earnings.
• Witnesses a major uptick in the valuation of large caps.
• Investors will be very careful in the next six months before infusing money aggressively.

On NBFCs

• NBFCs have a robust business model and they fulfill the need not met by various banks.
• There is no wishing away the importance of NBFCs in the whole credit ecosystem.
• NBFCs tend to be more cautious in the next few months in terms of retaining their liquidity and possibly slowing down disbursements, etc.
• Expects a slowdown in NBFCs in the next few quarters.

On Automobile

• Raw material prices are expected to impact the companies’ margins.
• Suggests to invest in auto stocks as valuations are becoming reasonable.
• Many auto stocks have been quoting premium to their historical valuations.
• Expects investors to make decent returns with a long-term view.
• Believes that the passenger vehicle segment is an under-penetrated market.
• Commercial vehicle segment looks positive for short-term traders.

On Mutual Fund Outflows

• Mutual fund outflows are usual in September.
• Most investors were scared due to the crisis at IL&FS.
• Monthly flows in equity mutual funds have been reducing.
• Domestic inflows in equity funds need to be robust.

Watch the full conversation: