Rakesh Jhunjhunwala, ace investor and the 'big bull' of Indian markets, is optimistic that the direction of growth in India is upwards.
Rakesh Jhunjhunwala, ace investor and the ‘big bull’ of Indian markets, is optimistic that the direction of growth in India is upwards. In an interview to ET Now, Jhunjhunwala said, “We are undoubtedly in the first phase of a bull market. Markets are refusing to correct, and even if they do, it doesn’t mean the bull market will end.” Jhunjhunwala said that the valuations are currently near the 2003 levels and he has been investing in the markets since 1985. “Earnings are going to grow in India. Bull markets start with low participation, but end with humongous participation.” “Don’t have emotions towards stocks. The idea is to make money,” is Jhunjhunwala’s mantra.
In context of IPOs, he said, “I see tremendous froth in the IPO market. There could be phases of valuation froth, but not in commitment. Hunger for stocks is so high that the froth in IPO market will continue”. While acknowledging that India may face some problems initially, the ace investor sees the country outperforming the world. “A tsunami of foreign flows is still ahead of us. I see much larger challenges in the Western world,” he said.
Jhunjhunwala gives a thumbs up to new RBI governor Urjit Patel saying, “Urjit Patel has the same views as Raghuram Rajan. Raghuram Rajan’s legacy will remain. We must thank him for his good work. I personally agree with Rajan’s stand on monetary policy.” “The reduction in interest rates is of no use unless it’s transmitted,” he added. Asked about the impact of GST, he said, “India is a large democracy. Things can’t change abruptly. It will take 1-2 years to feel the effect of GST.”
Commenting on the stocks that he has invested in, Jhunjhunwala said, “Tata Motors continues to remain one of my biggest commitments. I don’t anticipate any effect of Brexit on Tata Motors. I personally believe Brexit will turn out to be a non-event.” He regrets selling Oil marketing companies (OMCs) at “much lower levels”. Jhunjhunwala is of the view that Interglobe Aviation is not a great trading bet but a good investment bet. “I have not changed my view on the airline sector. I still remain invested in IndiGo,” he said.
Talking about global markets, Jhunjhunwala said, “I don’t think that they (global markets) will correct so easily. They will not correct unless interest rates really go up and frankly I don’t see interest rates in US going up above 1-1.5%.” Jhunjhunwala is bullish on gold. “I am bullish on gold and we are seeing limited supply of gold versus availability,” he said. Jhunjhunwala cautioned, “$60/bbl price for crude is a line that shouldn’t be crossed.”