Tweet Buster: How will multicap rule & RIL plans change the game

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NEW DELHI: The domestic equity market has turned listless over the past couple of weeks following an exuberant rally from the March lows. The one-step-forward-and-two-step-back kind of movement might frustrate investors, but it’s a reminder that there is no shortcut to making money.

Patience! That’s the broader sense one gets in some of the tweets market leaders put out through the week.

Value investor Arun Mukherjee said markets reward only those who are comfortable getting rich slowly.

In another tweet, he said markets are unforgiving and one must be quick to change stance on the presentation of new information. “Inflexibility is a crippling disease (in investing),” he said.

With things looking bleak for the economy, independent market expert Sandip Sabharwal was quick to point out that earnings growth projected that analysts have built in for the full financial year will be an impossible feat given the GDP contraction.

The new Sebi norms for multicap funds evoked mixed feelings on Dalal Street. While midcap and smallcap investors are suddenly smelling a big opportunity, some others – including mutual fund industry leaders – seemed to be in two minds. Some fund houses even talked of using alternative ways to dodge the googly.

Sabharwal said it’s not real buying by mutual funds, but the anticipation of such buying combined with some sentiment change which could drive many smallcaps up 25-100 per cent very fast.

RIL was the talk of the town, especially in the later part of the week, after reports that the conglomerate was readying for a Jio-like deal spree for Reliance Retail. While some analysts expressed doubt if the stock has gone up too far, Arun Mukherjee says there is huge value in the stock and the company will deliver over the next decade.

And the contrarian views are as strong. Independent market expert Ambareesh Baliga says RIL shareholders are not realising that existing shareholders will suffer from holding company discount when its two arms – telecom & retail – get listed separately.

Commenting on sector-specific moves, value investor Abhishek Basumallick says the private banks story will not run out of steam. He says Covid-19 does not change the decadal opportunity for the private sector banks to keep gaining incremental market share.

Meanwhile, iThought co-founder Shyam Sekhar says value is emerging in the telecom space. But he was quick to remind investors that even the big boys have gone wrong in this space.



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