The present global volatility will benefit India in the medium to long term and the country’s macro-economic parameters are very strong, financial services firm Edelweiss group chairman and CEO Rashesh Shah said today.
“….global volatility is not going to go away in a hurry — just a lot of uncertainty, and India in the short term will get as much affected by global volatility as everybody else, I think in the medium to long term this will actually benefit India.
“Because this current volatility people are afraid that the global economy will slow down, especially that the China will slow down because they are the second largest economy in the world- so the global economy will also slow down, an that is currently the biggest challenge that the world is facing,” Shah told reporters here.
He was speaking on the sidelines of an event organised to announce World No 1 women’s badminton player Saina Nehwal as Edelweiss Group’s brand ambassador.
Shah said, “in the medium term it will be good for India, because we will stand out- as the growth is still very solid and along with that all the macro-economic parameters in India are very strong.”
Asking investors to keep an eye on the long term, Shah said if you are looking at the next three or five years this correction will be a great opportunity to invest.
He said, “I think there are some great companies in India which have been growing at 18-20 per cent a year- which will continue to grow that rate for the coming few years.”
“So I think great companies, with this correction- if you can invest for the long term, take a long term view, keep faith in the system and not to panic, because there is no need to panic, because India is at a strong place….”
Asked where he sees the sensex by the year end, Shah said it is hard to give a target.
“….I think eventually the idea is to see the long term growth and I think on a long term basis investing in the stock market should give you about 15 per cent of returns which is not bad.” To a question on for how long FII sell-out may continue, Shah said for couple of months it looks bit challenging.
“but there is always an opportunity, I have seen that whenever FIIs are sold, if Indian investors who have brought at that time – the return in the next three years have been very good.”
Speaking on devaluation of currencies and impact on the rupee, he said I think Indian rupee will track the other Asian currencies.
“…. it is not about competitive devaluation, it is like if every body is falling you will also fall to a certain extent to keep your competitiveness. So in a way it is healthy, if it is gradual, if it is contained- if it doesn’t lead to a huge amount of volatility. I don’t think the rupee will be in a free fall. There won’t be panic in the rupee…,” he said.
Noting that Narendra Modi lead government has done “reasonably well”, Shah said there will always be more expectations from what they have delivered.
“They have brought in lot of efficiency, lots of those stalled projects have got cleared, there is a lot of focus and clarity, and also pride in India has come back. India’s image has changed in the eyes of not only Indians but also foreigners,” he said.
Speaking on Edelweiss he said “we have been doing fairly well, if you see in the last three years we have fairly grown at more than 35 per cent….we think with the range of business we have, the kind of quality of business we have, we should aim to continue to grow between 20 to 30 per cent . There is lot of opportunities in India.”
“Our retail presence is also growing very fast – we have 200 offices in India, we are investing a lot on our brand and customer experience,” he added.