With the 30-share Sensex crossing the psychological 35,000 figure, and the Nifty scaling 10,800, stock market veteran Madhusudan Kela says that the index has risen against all odds in the last 10-15 years to reach the magic figure. We take a look at what the market expert is betting on at current levels.
With the 30-share Sensex crossing the psychological 35,000 figure, and the Nifty scaling 10,800, stock market veteran Madhusudan Kela says that the index has risen against all odds in the last 10-15 years to reach the magic figure. “For a minute, we just need to step back and pat our own backs if someone else is not patting because this event needs to be looked in the context that from 3000-4000, the index against all odds, over the last 13, 14, 15 years of this journey has now managed to touch 35,000,” Madhusudan Kela told in an interview to ET Now.
While a few market experts caution that the valuations in equity markets appear to be stretched, Madhusudan Kela says that there are enough ideas to make money even at these levels. “There are enough ideas even in this market where you can make good returns relative to other asset classes. Let us not forget interest rate were also 6%, real estate is not making any money, gold is not making any money, bonds are not making any money either.If you are coming into equity at 35000 index saying that I will have another 50% growth here, then that is the unrealistic expectation but can equity still deliver double digit return in a three to five year horizon? I can put my neck out and say yes it is possible,” the stock market expert told ET Now.
So what exactly is he bullish on at these levels? “Even at the cost of all the disclosures which you must make that I am not an expert to advice people, I would say that from a three-year horizon I would bet on public sector banks.”
Explaining the reason for his bullishness in the space, he said, “Some pockets of public sector banks are very cheap. The asset recovery which is going to happen and we are hearing that even in large accounts, the haircut may not be as big as it was thought originally and significant recovery will happen. We have seen tremendous amount of provisioning in the last five-six years by all banks. So public sector banks as an asset class look cheap relative to the market and I see there are opportunities there.”
Apart from public sector banks, Madhusudan Kela sees a lot of opportunity in construction space. “The other space which could be exciting is basically the entire economy related, construction related plays where I feel that given the vibrancy in the capital market, given the interest rates are still affordable at some point of time we will see revival of capex even from the private side. We are already seeing a lot of momentum in the infrastructure side from the government side,” Madhusudan Kela told the channel.