Election And Impact On Indian Markets | NDTV Profit
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00:00 Let's talk about some of these developing stories in the Asia region.
00:04 We are joined by Anurag Singh, who is Managing Partner at Ansid Capital.
00:08 Anurag, thanks so much for taking the time this morning.
00:12 Like we were saying, possible historic move by the Bank of Japan, 17 years is what it
00:17 has taken for them to change the interest rate regime.
00:21 They might well do that.
00:22 The other developing story is one in China.
00:25 I am not sure if you've read the headline, but seemingly Evergrande has been inflating
00:31 its revenues, so that might just be a bit of a knockback for investments coming back
00:35 to China.
00:36 How are you reading all of these?
00:38 Yeah.
00:39 Alex, good morning.
00:42 And yeah, look, Bank of Japan decision is reasonably clear.
00:48 And I think if we need to look at one parameter which forces Bank of Japan to think, that
00:54 is wage inflation.
00:56 If you look at last 40 years, right from kind of late 90s, early 90s, Bank of Japan's wage
01:03 inflation has dropped from 4% to just about 2%.
01:06 It has stayed at 2% for about last 40 years.
01:10 Now it is back to 4%.
01:12 So at least that number is telling us that the time for a negative interest rate policy
01:19 is kind of pretty much over.
01:21 So I think the sooner they do, the better it is.
01:24 That's the broad anticipation, Alex, on the Bank of Japan side.
01:29 On China, Alex, I think those stories are pretty well discussed out in the media.
01:37 But if it is having a population decline, people spend in real estate mostly when they
01:45 are in their 30s and 40s and their population is declining.
01:48 Obviously, if more houses built, then there are buyers there.
01:52 The market is anyways going to slow down.
01:55 In terms of numbers, my cardinal rule is that you can't trust any numbers coming out of
02:00 China and you can't take them on face value.
02:02 So I wouldn't be surprised if that turns out to be true because it's a very closed economy.
02:07 They manage their numbers pretty much from government to private sector, almost anything.
02:11 So much so that when they, and that's a bone of contention with SEC and the Chinese companies,
02:18 which is that the companies are legally allowed to publish two different numbers.
02:21 They publish one set of numbers to Wall Street and very different set of numbers within China.
02:26 Take that.
02:28 That's a fair point.
02:30 But in that context, we're looking at the benchmark here in India, still trading above
02:35 22,000, we're just months away from elections and that election outcome.
02:42 As somebody that's looking from outside in, how do you look at the Indian markets in the
02:47 context of what you're seeing in Asia?
02:51 So Alex, and I was bit in the skeptical camp when the Nifty was somewhere around 15, 16,000,
02:59 17,000 last year.
03:01 And I was reasonably bearish then.
03:04 But then I think I underestimated the strength of the SIP flows and the, you know, just kind
03:09 of, they just, you know, it just fails to, the flows just fail to defy, you know, they
03:17 defy gravity.
03:18 They just fail to be bogged down by any obstacle.
03:24 And I think that's a big move, which is happening in India.
03:26 I would say fundamental level, Alex, I don't think we can give a reasonable justification
03:33 to fundamentally justify any stock, any sector in India right now, right?
03:41 Pretty much outside of banking space, large cap banks, I would say I cannot personally
03:46 reason out that any justification is valid with respect to the financial parameters and
03:52 the valuation methods that we have.
03:55 But it is purely working on demand and supply.
03:57 It's something like a Bombay real estate, you know, that's the price.
04:00 It may not be the bang for your buck, but that's the price and you got to pay that.
04:04 And I think it's pretty interesting to see how FIIs are broadly being driven out of the
04:09 Indian market and their holding is regularly kind of depleting from 22% to just about 17%
04:14 now and even falling now.
04:16 And I think it's also evident that why some of the, you know, take for instance, Whirlpool,
04:21 I mean, the promoters are selling just because the valuation is too high.
04:25 I don't think in the long term, it's a good thing, Alex.
04:28 I mean, it's fine, but I don't think it's doing any good to even the SIP investors themselves.
04:33 That's a quick take, Alex.
04:34 That's an interesting point.
04:35 All right, Anurag, I'll talk to you, you know, soon when we see what the outcome of the elections
04:43 are and possibly before that as well.
04:46 And let's see where the markets are headed.
04:47 Thanks, Alex.
04:48 Thanks, Anurag.
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