Madhu Kela sees positives emerge, Devina Mehra disagreesMadhusudan Kela,
Head of Equity Investments, Reliance Mutual Fund, expects markets to remain
volatile for the next 2–3 months. "There is no end to global headwinds. The
December quarter is likely to be among the worst, but that has already been
factored in by markets."
He feels hedge fund redemptions are likely to get over by January.
"Globally, fresh allocations to equities are likely in January. However over
a two–three year horizon, global investors cannot ignore India."
This bearish view is shared by Devina Mehra of First Global. She feels the
markets still have a long way to go in terms of timeframe. "The will be
considerable pain ahead. A full impact of global slowdown is still to come.
Prices may fall much more from these levels. Even commodity prices are
likely to go down further. "
She sees much more serious deceleration in GDP, IIP, and earnings. "We are
likely to see serious earnings destruction and don't expect domestic growth
to pick up soon. One is likely to see more margin pressures going ahead.
There is threat to many large and medium companies due to over-leveraging."
According to her, bear market rallies will happen and can be played by savvy
investors.
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Mkts seeing foundation for next bull run: Tata MFVed Prakash Chaturvedi, MD,
Tata Mutual Fund<http://www.moneycontrol.com/india/mutualfunds/mfinfo/15/17/amcsnap/TA>,
feels the seeds of the next bull run are being put in place. "All good
things which ultimately lay the foundation of a long-term bull market are
happening now. Interest rates, inflation, and raw material costs are coming
down, companies are talking about cost control, and all this will form a
stable base of a turnaround when that happens. It is at least six-nine
months away, but all these are seeds of the long-term bull market and maybe
one can look at it optimistically."
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India to recover fastest among global economies: CB Bhave
CB Bhave, Chairman of the Securities and Exchange Board of India (Sebi) in
his address and conversation with CNBC-TV18's Managing Editor, Udayan
Mukherjee, at the Hindustan Times Leadership Summit, said that India
is closely linked to the world economy and the global credit markets,
especially via trade but feels India would be amongst the fastest in the
world to recover.
"Every crisis is an opportunity. We have learnt a lot during the month of
October. We should use this opportunity to improve our system. When the
chips are down, we must build for the future, and not just be unhappy that
the chips are down, because this country will recover most probably amongst
the fastest in the world. We will feel the effect of what is going on in the
world but we will be amongst the first few that recover. When we do recover,
our weight in the world will be more than what it was before the crisis."
Bhave is uncertain as to when the markets will bottom out and he advises
people not to put all their savings and emergency funds into equity. He said
that investors need to diversify asset allocations in order to reduce their
losses and advises investors against timing the market.
According to Bhave, the current crisis is an opportunity for us to learn and
build institutional capacity. He sees the need to intensify investor
education and to focus on institutional reforms to avoid similar crisis.
The Chairman said he has not seen any manipulation in the market so far.
Bhave rues that evidence indicates that leveraged FIIs are getting out of
the Indian market and that institutional investors with leveraged clients
too are leaving the market. However, he said long-term investors like
pension funds were still investing in India.
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