Our next guest says that India markets are on a solid footing. Alder capital investment manager Rakhi Prasad now joins us. Rakhi why
do you say that. And give us a sense of what you've been gleaning from this earnings season right now which perhaps may
well solidify that view. Absolutely. I believe the Indian markets. Indian economy is
actually crossed. Its people read levels this quarter and we're seeing it across sectors especially in the discretionary
businesses or small and medium mid-cap businesses across the Africans and indeed in footwear.
Also we are seeing businesses be FSA doing exceedingly well. So export businesses will be a little bit under pressure. But
overall I think domestically businesses are coming back and raring to go.
So tell me your IQ wouldn't you look at the corpus that was the forward guidance like and are they having any impact from the
higher cost of borrowing instituted by the Reserve Bank. Of course 50 basis points was the last move for them. And also you
know ultimately where do you see rates going and how will it affect corporates and then therefore your investment ideas. So
inflation obviously through this quarter which we predicted to last for five months ago that we'll continue to see seep through
even imported oil. That's what the commentary is. What we're hearing from various types of pulpits across different CGI etc.
with the rate hike RBI obviously is has brought it back above the people who had done levels. And that will start to impact a
little bit on the housing sector cetera. But remember I mean these rates are still below the high inflation and high interest
rates we had seen during our 2009 to 2014 region. So in that sense though demand is still bad in the housing
sector which will pick up and maybe at a slower pace. The thing is Rocky you got to wonder how much upside there is for Indian
stocks because if you take a look at value key evaluation indicators they're pretty much closing into peak valuation.
You're absolutely right. Haslinda Amin that's one of the indicators are many of the indicators in terms of valuation
indicators whether it's earnings zeal to bond yield market cap to GDP your fee they're all trading slightly above what we would
consider as comfortable. So maybe it's a pause in the market demand maybe a coincidence. But if there are lower risks that we
see either geopolitical risks in terms of supply chain disruptions or oil going back to normal crossing hundred hundred
and twenty dollars we may actually see some correction. But for the time being I think everyone is happy.
How would you cut risk in your portfolio. How are you tweaking. How should you tweak.
Absolutely. So that's something that we are also looking to do and deep
diving into ISE stocks in our portfolio seeing whichever ones are at a higher risk going to have exceeded valuations of beyond
comfort levels where ISE are not ingesting anymore. We're trimming those positions putting it in positions where we are
seeing long term ISE. So it is one of those adjustments that we're doing at this
period of time and that's how we're seeing the markets. Rocky what about the industry groups that you totally avoid and
the ones you like right now in light of what we've seen so far and getting back to that earning season.
So Jordan as a sector it is something that we're being cautious about just because of all the commentary that we heard across
various sectors and our companies with brutal wages have not picked up and demand is sluggish. You can see that in the high
frequency indicators whether it's still windows or that its mass consumption items whether it's a fancy gee where people are
downgrading. So in that sense that order is a space that we're avoiding at the moment.
Obviously with global economic pressures and the slowing down of the U.S. and European markets export businesses is also an area
that needs to be concerned about. But from a domestic point of view there are a lot of opportunities whether it's in health
care whether it's in small discretionary businesses businesses that actually have
pricing power and larger businesses that can take advantage of the economic volatility that does have.