Even as we come to the fag end of Financial Year 17-18 amid heightened volatility in the stock markets, Sridhar Sivaram of Enam Holdings says that the second half of the year will be more volatile and returns will be lower.
Even as we come to the fag end of Financial Year 17-18 amid heightened volatility in the stock markets, Sridhar Sivaram of Enam Holdings says that the second half of the year will be more volatile and returns will be lower. In an interview to CNBC TV18, Sridhar Sivaram, Investment Director at Enam Holdings said, “ FY18 has been a tough year, we don’t expect too much return this year. We are already underperforming the EM peers by about 10%.” According to the expert, the stock markets could face various headwinds due to implementation of e-way bills from April 1st and the political situation in the country.
Further, Sridhar Sivaram said that the macros have deteriorated. “India’s macro has significantly deteriorated. If we go back three years, we are seeing inflation inching up even though it is still within the RBI band. We are seeing the CAD moving up. The RBI interest rate hike looms large. The sweet spot we were in the last three years has moved away,” he said. However Sridhar Sivaram noted that India’s bull markets have come when India’s macros haven’t been great.
Sharing his views on the stock market valuations, Sridhar Sivaram said that a healthy correction which was required. “ We are back to Nifty at 10,000 which we hit in July-17. Eight months of market move is gone. We have patchy earnings. Many news flows which are not great for the stock markets. It’s a reminder for people that it’s not a one-way street,” he said noting that irrational exuberance in certain pockets seems to have gone away.
Speaking about the prospects of India’s PSU banks in light of the NPA cleanup, Sivaram observed that the PSU lack of market share will also accelerates from here. “The LCs and other forms of exports credit has significantly come down,” he said.