What’ll drive investments this year?

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In 2013, markets faced several challenges such as sharp outflow of funds from the Indian debt market (AP) In 2013, markets faced several challenges such as sharp outflow of funds from the Indian debt market (AP)
SummaryIn 2013, markets faced several challenges such as sharp outflow of funds from Indian debt market...

trends and challenges and prepare ourselves to realise India’s full potential across sectors. We need a stable and facilitative environment for building infrastructure. We need to give a focused boost to manufacturing, to create jobs and reduce import dependency. We need to drive accelerated growth in agriculture by addressing supply chain issues, which will improve rural incomes, reduce wastage of produce, reduce dependence on imports and contain food inflation. We need to focus on education and skill building to leverage our demographic dividend. We have faced and will continue to face several challenges. In a volatile and rapidly changing global environment, there will always be unexpected events that we cannot foresee. We need to take all necessary steps to harness India’s domestic growth drivers to ensure that the rise of India is unstoppable.

Nilesh Shah,

CEO, Axis Capital

‘Equity markets will be volatile in 2014’

Though, nominally, the market looks near all time high level, in real terms barring FMCG every other sector is trading below its median average valuation of last eight years. While it will get support from a shift towards financial savings and from fair valuations, it will face uncertainty of election outcome and will look up to investment revival by the new government. A large part of volatility will also come from the fact that there is high polarisation towards sectors like technology, pharma, FMCG on one side and capital goods, real estate, metals, auto on the other side.

Mid and small cap have under-performed large caps significantly and these is a chance that select (free cash generating, dividend paying) small and mid cap stocks will deliver better return.

Gold as asset class has been a favourite with Indians but considering the import duty and spot premium for physical gold, it should be strictly avoided. Those buying gold for investment must remember that what they buy here is 15-20 per cent cheaper in most parts of the world.

In the fixed income space, rates are at elevated level and they may remain there for some time. Tax free bonds, IPOs provide best opportunity for investment for high tax bracket investors. CPI

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