India Bets On 3 Gs

#3Gs

#longterm

#foreigninvestments

India bets on 3 Gs to attract long-term foreign investments, says Nilesh Shah of Kotak Mahindra AMC.

Nilesh Shah, Managing Director at Kotak Mahindra Asset Management Company is bullish on the manufacturing sector in India.

He mentions that China+1 is pushing global sourcing to other countries including India.

Competitive companies catering to local and global markets will do well in the days, months, quarters and years to come, he feels.

India provides three Gs - better earnings growth, governance and green transformation which is likely to attract long-term FPIs, says Shah with more than 26 years of experience in the mutual fund industry.

*_Do you think US Federal Reserve is done with its rate hike cycle?_*

In our opinion, the rate hike cycle isn’t over in the US. There is a tug-of-war going on between US Fed and the market. Fed Chairman has indicated that there is a high probability of two more rate hikes in the rest of 2023.

The market is expecting one rate hike of 25 bps. Undoubtedly there is a consensus between US Fed and the market that the rate hike cycle isn’t over.

*_One sector where you have a super bullish view for the rest of the financial year, and why?_*

We are bullish on the manufacturing sector in India. China+1 is pushing global sourcing to other countries including India.

Companies which are competitive and cater to local and global markets will do well in the days, months, quarters and years to come. 

*_Do you think the foreign investors will turn out to be big net buyers in India this year?_*

In our opinion, FPIs are likely to be the best buyers of Indian equity. The three Gs are likely to attract long-term FPIs.

*_Can India surprise with 7 percent growth numbers in FY24?_*

In our opinion, it is a tall task. With a below-average monsoon staring at us, 7 percent for FY24 is likely to be a very difficult target. It will be nothing sort of a big miracle if we get that growth number.

*_Do you see any possibility of one more rate hike from the RBI in the rest of the calendar year?_*

In our opinion, the RBI is unlikely to raise interest rates in this cycle. They have been proactive in raising rates and taking out liquidity. Their well-timed action is likely to give them elbow room not to raise rates.

*_Is it time to be cautious while picking stocks, considering the market is fairly valued?_*

Caution is always important while investing as is courage. One always has to be cautious while Investing. Caution doesn’t mean not playing the game. Caution means you go to play with appropriate protection like pads, gloves, helmet etc.

*_Any big domestic or global factors that can bring volatility in the equity markets in the next year?_*

There are many factors which are likely to impact the market in the next year. Some of the factors which will have an impact are US Fed Pivot, The RBI Pivot, Central Election 2024, Corporate Results, Ukraine conflict, Energy Prices, Liquidity etc.