Top mid-cap fund stays cautious on St
Mumbai: Even as investors bet on a resurgence for medium-sized Indian companies after Prime Minister Narendra Modi’s return to power, one of the country’s top midcap fund manager advises caution.
This group of stocks won’t get an immediate lift from Modi’s victory as it isn’t immune to the slowdown in the economy and the lingering shadow-bank crisis, said Vinit Sambre, who oversees $1.6 billion in two mid and small-cap funds at DSP Investment Managers.
“Corporate India is feeling the pressure of slowdown across the board, and we have not steered out of the non-bank finance crisis that began in September,” he said. “The overall market volatility will have some bearing on mid-cap stocks as well.”
Brokerages including CLSA India Pvt expect midsized businesses to benefit on hopes Modi’s commanding majority will help him take steps to boost growth. A day after the poll results last month, Angel Broking said it expects the “party to begin” after a weak spell that’s left the Nifty Midcap 100 Index trading at the highest discount to the large-cap gauge since 2012.
The midcap gauge on Friday halted two weeks of gains as data on May 31 showed the economy grew last quarter at a slower pace than economists expected. Investor confidence was also shaken by the crisis faced by shadow banks after the default of IL&FS Group in September.
S&P BSE MIDCAP