With markets recording their worst single-day fall during the week investors seem worried not just about the listing day gains that they were expecting from SBI Cards but their investment strategy in general during the volatile market situation. Although SBI Cards does not look like it will perform on the similar lines as was earlier expected, the current situation could be a good bet for long-term investors, says Vinod Nair, Head of research, Geojit Financial Services in an interview with Kshitij Bhargava. Nair lists out particular sectors that he thinks investors should keep an eye on. Here are the edited excerpts:
Seeing the current volatility in the share markets, what can we expect from SBI Cards and Payments Services on listing day?
It is difficult to say when people put their money into the initial public offer, the situation was different, people were expecting to gain on listing. I don’t think that will happen now, as markets have changed. Yes Bank issue where State Bank of India (SBI) is putting in money will also impact the listing. There are concerns that the listing money could be used by SBI for that issue, although that is not possible but there are concerns. Unless markets start very positive next week we can not expect much from SBI cards.
What should small investors do during such market volatility? Is it a time to pick stocks or should they stay away from the market completely?
We are in the last phase of this capitalisation, for how long it will continue we don’t know because volatility is high. HDFC AMC is up 40% from day’s low. These stocks might fall as it is not sustainable, volatility might be there for as long as a quarter. For a long term investor, this is a good opportunity and they should book into it. They should look at 5-7 quality stocks and accumulate them and on a weekly basis add on to those stocks.
Are there any particular sectors that investors should keep an eye on to invest in?
Private banks like Kotak and HDFC Bank could be looked at. Also, State Bank of India with the Yes Bank bailout might benefit. Chemicals is looking positive, Information Technology too looks good with H1B changes that are beneficial for the IT sector. Consumption sector is stable right now and stocks like Pidilite, HUL and DMart are on my radar.