Put Money To Work, Keep Some For Later, Says ASK Investment’s Prateek Agrawal
With the markets stabilising after selling by foreign investors declining and domestic players buying, Prateek Agarwal thinks this is the time to put money to work.
The business head and chief investment officer of ASK Investment Managers, however, advised investors to invest in a judicious manner. “While valuations are cheap and we’re saying that put some money to work, keep some for later,” he told BloombergQuint in an interview.
Indian equity markets gained for fourth straight day in a row today, showing recovery after witnessing the worst selloff since 2008 early this year.
The two biggest risks, according to Agarwal, is the rising number of people infected by the novel coronavirus and poor earnings in the first quarter of the ongoing financial year. He’s focusing on businesses with cash on books, businesses that will benefit from softer commodity prices.
“Over the last 10-15 days we’ve seen the highest concentration of approvals, so export business for pharma moves up and riskiness attached to it goes down,” he said. “These are the only spaces, including general insurance, where analysts might be looking at some growth for FY21.”
Chemical makers, Agarwal said, are nicely positioned such that they can scale up manufacturing.
He also expects general insurance sector to come out as a winner as there is no damage to the balance sheet and the business outlook improves. “In the immediate term, motor claims will be lower as people are staying indoors, despite that claims will be better and profitability will be higher. health insurance will also grow faster and is very profitable,” Agarwal said. The business outlook for life insurers will also improve on the back of increased preference for insurance policies against ULIPs, he said.
Agarwal sounded bullish on an early revival of automobile sales and fee-based financial companies like mutual funds.
Watch the full interview here: