Even though majority eluded Bharatiya Janata Party (BJP) in the recently held Karnataka elections, mood of the stock markets wouldn’t be affected due to this. In fact, 2019 general elections hold much more relative significance for the stock markets, says Nilesh Shah of Envision Capital. As for retail investors, it’s advisable to carry out proper research of a company’s fundamentals before investing their money in the bourses, veteran analyst advises. Nilesh Shah, MD and CEO, Envision Capital also tells Ashish Pandey of FE Online how to plan an investment strategy going forward, and shares his ‘stock-investment’ mantra.
Will Karnataka election results have an effect on the stock markets?
I don’t think Karnataka assembly elections will have any significant bearing. In fact, in our view, no state election has any kind of bearing on the markets. I believe, 2019 union elections will be relatively more important. Also, the reality is that we are at a starting point of a very long multi-decade economic expansion. And, no state or a general election can change that course for India. These events at best can be bumps along the way.
How will rising global interest rates, surging crude oil prices impact stock markets?
Both these factors remain significant macro headwinds. However, India enjoys a strong tailwind of economic growth leading to strong growth in corporate earnings in the coming year.
In which stocks or sectors should a retail investor park his money currently?
I don’t think retail investors should directly invest in stocks, unless they are able to carry out proper fundamental research on their own.
Which sectors may outperform the benchmark indices in the coming 3-4 year timeframe?
Private banks, life insurance companies, travel & tourism and holidaying offer good long-term potential. Apart from this, the recent depreciation of the rupee, if sustained, could drive earnings for export-oriented sectors.
What are the key things which Nilesh Shah looks at while buying stocks?
I will say 3B’s – Business, Balance Sheet and Bargain Price – are the three key things. It’s important to look at the growth potential of a company and the price you are paying for the stock. One must also properly study the balance sheets of the company to understand its past and present performances.
This interview was originally published on 21 May 2018 on www.financialexpress.com