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  1. Cash is king for next 3-6 months, wait on sidelines; Motilal Oswal’s PMS CIO tells stock market investors

Cash is king for next 3-6 months, wait on sidelines; Motilal Oswal’s PMS CIO tells stock market investors

Even as the stock markets roils under pressure amid ongoing global sell-off, Manish Sonthalia of Motilal Oswal PMS says that it's time to wait on the sidelines, and cash is king for the next 3-6 months.

By: | Published: October 11, 2018 5:25 PM
According to Manish Sonthalia, buying on dips strategy may not work going forward, as the scenario has changed now due to rising interest rates.

Even as the stock markets roils under pressure amid ongoing global sell-off, Manish Sonthalia of Motilal Oswal PMS says that it’s time to wait on the sidelines, and cash is king for the next 3-6 months. In an interview to CNBC TV18, Manish Sonthalia, CIO, Motilal Oswal AM PMS said, “I want to be bullish, but am not finding many reasons. The broader markets have seen some very deep correction. We’ll have to see how the earnings season plays out. Going forward, it’s going to be stock specific, it’s going to be relative performance. In the next 2-3 years, there’s ample money to be made, but in the next 3-6 months cash is still king, sit on the sidelines.”

According to the expert, buying on dips strategy may not work going forward, as the scenario has changed now due to rising interest rates. “Coming to what the HNIs would be thinking, in the last 3-4 years, buying on dips has always worked, because we were in a very low interest rate regime globally, so same or flattish earnings were getting discounted at higher PE multiples. But now, that’s not the case,” he noted. 

Even as India Inc gears up to report numbers for the Jul-Sep quarter, Sonthalia says that stock specific rally will depend on the respective results. “Now, it’s going to depend on the earnings of the companies in respective portfolios, how they perform will determine relative and absolute performance,” h noted.

Taking stock of the recent correction in the NBFCs, he said that ther space has lost favour with the fund managers. “We were in a decling interest rate scenario, so a lot of money had been made in NBFCs. It was the darling of the stock market. All of that is going to reverse. The business model of these NBFCs is fractured if not broken,” he said.

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