‘Rally Not Led by Liq­uid­ity Only’

The Economic Times - - Smart -

In an in­ter­view to ET Now, San­jay Dutt of Quan­tum Se­cu­ri­ties, says liq­uid­ity and struc­tural changes like de­mon­eti­sa­tion and Goods and Ser­vices Tax (GST) are con­tribut­ing to the cur­rent rally in mar­kets. Edited ex­cerpts:

How much can re­cent mo­men­tum drive mar­kets up by? There is a struc­tural change that has hap­pened in In­dia which is the com­bi­na­tion of the de­mon­eti­sa­tion and GST. So a com­bi­na­tion of two — liq­uid­ity flows as well as fun­da­men­tal changes hap­pen­ing in the way busi­nesses are go­ing to be done in In­dia — are con­tribut­ing to this rally and not just pure liq­uid­ity.

The last few weeks have been liq­uid­ity-led but peo­ple who have been caught com­pletely off-guard with de­mon­eti­sa­tion are see­ing right now a sub­stan­tial cor­rec­tion of that and things are likely to re­main pos­i­tive in the year ahead.

Do you think 2017 would be a re­ward­ing year for equities? It is mainly be­cause fundamentals are in place and bar­ring ma­jor neg­a­tive events that may come in from over­seas that may prove to be a shock to the do­mes­tic fundamentals or cause some other struc­tural change within the global setup. Oth­er­wise, as things stand right now, and what one can see in the fore­see­able fu­ture, I do not see any rea­son why the mar­ket should not be and will not be in un­charted ter­ri­to­ries.

Which sec­tors or stocks in­ter­est you? It is go­ing to be across the board. Good companies are go­ing to ben­e­fit from the turn­around in the economy, the struc­tural changes that are hap­pen­ing. It is the large or­gan­ised sec­tor which will ben­e­fit a lot out of GST as well as de­mon­eti­sa­tion. A lot of un­ac­counted, un­or­gan­ised busi­ness would be ad­versely im­pacted.

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