Top mid-cap fund stays cau­tious on St

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - Nupur Acharya

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.


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