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Northern Champions
Rajul Kothari , Capital League, Gurgaon
Relatively Positive vis a vis 2013. QE taper has been discounted, globally improved outlook. State elections have given some directions for Lok Sabha elections - the electorate is clearly favouring growth and development and not free hand-outs - indicates pressure to end policy
Paralysis. Corporate outlook- worst seems to be over- improved operating margins on back of tight cost control, Rupee is stabilised. Positive on export led sectors, as market sentiment improves expect valuation gap between large cap and mid - cap to reduce.
Dhiraj Mittal, CFP, Prime Capital Services Pvt Ltd, Delhi
Moderately positive on equities. Sector / theme preferences : Indian Pharma/IT, US Equities.
Mukesh Gupta, Wealthcare Securities Pvt Ltd, Delhi
Very positive on equities. B) Focusing more on Mid cap funds and asset allocation funds
Major Ashish Chadha, Chadha Investment, Delhi
Super- equities. Buy something for God's sake!!
Kapil Khurana, Amritsar
Equity will be very volatile with start of opinion polls for India's general election or even after its results.Like to add or overweight on banking financial & infra segment with a hope that Indians will poll for a stable government.
Ashwani Tiwari, CFP, MaxGrowth Capital, Jalandhar
Equities should outperform other asset classes. Broadly the outperformance will heavily weigh on stock selection. Among the market capitalisation, mid caps offer the most value but if we have to take a sectoral view then selective IT, Pharma,Auto and Infrastructure sectors look to be promising. Of course we will have to keep track of sector rotation as and when this market gathers more sustainable momentum.
SS Chilana, Your Wealth Advisor, Chandigarh
Diversified equity funds. Large to midcap. Some part in IT sector looks better in 2014
Ashish Modani, SLA Investment Centre, Jaipur
I believe markets should do well. I do not understand sectors and wish to allocate money in plain vanilla funds only.
Eastern Champions
Anindya Mandal, Ruby Financial Services Pvt. Ltd., Kolkata
2014 doesn't look very bullish but some consolidation may happen, so would suggest to take position at every fall of the equity market. Investment in Small and Mid Cap segment will be our call but should take position through STP (Systematic Transfer Plan) by putting one time investment in Liquid Fund.
Bharat Bagla, Bees Network, Kolkata
The outlook for equities looks decent… while we would prefer our clients to be over weight on large caps only.... some exposure to Technology, Pharma, US would be advisable.
Pallav Bagaria, Brand New Day, Guwahati
2014 will be very volatile. Will not be the run away types as the hype is getting build up. In case of an unexpected outcome of the general election results, markets will take it very harshly. Currently overweight Cyclicals, Export Promotion and Import Substitution Industries.
Vikash Agarwal, DNS Wealth, Rourkela
As far as the Equity Markets are concerned, I don't feel much bullishness on the Indian equity Markets for next 1-2 years. The International Equity markets are on booming path & continue to be on this road for next 3-5 years but as far as Indian Markets are concerned they will still struggle hard in the years to come.
There may be a blip up during election results but that will decide the future & sentiments of Indian equities. If the UPA Govt. is back or any other non-BJP led govt., then I expect equities to crash irrespective of boom in the global markets & we would like to remain invested in debt markets.
But if its a BJP led Govt., then we can expect a rally in Indian equities after Mid to End 2015 as policies of the Govt. will take a time of 1-1½ years to bloom. So I believe a major bull rally to take place between April - December 2015. So one can start investing in equities only after the election results are out.
I don't feel any of the segment to be overweight as Telecom, Pharma & FMCG still continue to grow better in coming years due to consumption factors. E-commerce and other innovations can continue supporting IT sector growth.
Southern Champions
K Arun Kumar, AK Associates, Bangalore
Looks better compared to the year 2013, the risk reward looks quite favorable for the MID & SMALL CAP.
Shrikant Bhagavat, Hexagon Capital Advisors, Bangalore
There are reasonable grounds to believe that India is poised for a large change socially and politically. While economically the change may take more time, sentimentally there could be a lead. The slight underweight position is likely to move to a full weight position during the year. Would prefer a diversified portfolio with a slight overweight on midcap.
Shyam Sundar, Peak Alpha, Bangalore
I believe 2014 will be a fascinating year for equity investing. I believe that the general elections is going to be a big deal. I also believe that the mandate has a better than average likelihood of being clear. Markets have a long trend of good returns. Further market direction is made in a few days of the year rather than steadily throughout the year. Given these two observations , I believe in the months leading up to the elections, it is riskier to stay out of the market and miss out on Big moments than to stay invested and see capital erosion. We are recommending to all our clients, where asset allocation is appropriate to get into equities.
Although opportunities are attractive in smaller companies, and in the left behind sectors like Infrastructure, I believe the broad trend this year will be large cap, momentum oriented as FII money tends to flow first into this space and then gradually percolate into other sectors
Deepak Chhabria, Axiom Financial Services Pvt Ltd, Bangalore
Last 5-6 years have posed serious challenges to equity investors. Even die hard equity fans have seen their faith in this asset class having been shaken, during this period. However, last few months seem to be bringing in some positivity, uncertainty is ebbing and it appears hope will pervade in 2014. My outlook on equity is positive for coming year, agreed, we are going to face general elections during Mid 2014, but there is enough evidence that tells us that markets do well during run up to the elections. Since, we are completely dependent on FII's flows, performance of US economy is the key, any slow down or negative impact of taper will bring down flows, may even lead to FII's withdrawing some funds. This needs to be taken into consideration and keenly watched.
Large cap segment still has some room, but it is Mid cap that will give returns, there is great value available in this category. I am advising my clients to increase allocation now to enjoy the run.
E Chandrasekaran, ECS Financial Services, Hyderabad
We expect market to be overall positive in 2014 and foreseeing 15% growth. However we are cautious due to volatility till elections, out come of the results, Fed clarity on QE tapering etc. We are overweight on IT, Pharma, Banking sectors.
AK Narayan, A.K.Narayan Associates, Chennai
Equity outlook in our opinion is going to be very positive in the current year as I see that the economy should pick up from now onwards. We should ideally look at stocks of IT-oriented cos, exports -oriented cos as those segments should perform very well because the rupee will depreciate further. We would like clients to be overweight in IT, Pharma and also Export-oriented companies
V K Sudarshan, Veekay Enterprises, Chennai
I expect the market to be range bound between 20k and 23k.
Maxie Jose, CFP, Affluenz Financial Services, Kochi
We believe that 2014 will be good for Indian equity markets. Though we are not likely to see a huge change in GDP growth, Indian economy is around the bend and would see it beating all other asset classes. The government had initiated a series of reform measures that were aimed at accelerating economic growth and dispelling the negative investor sentiment clouding the market. Other measures like direct subsidy transfer and Aadhar can be pivotal in improving efficiency. New Government (irrespective of alliances and party) is likely to take reforms forward and actions already taken are irreversible. GST is one of the steps which could become a game changer over the next couple of years. Having said that, political uncertainty, inflation and QE tapering (to limited extent) would remain a concern. Despite these concerns, strong domestic consumption (particularly rural), is likely to augur well for Indian Equity.
With regard to segments which are likely to outperform, it is an unanimous agreement that export oriented stories are there to stay, in the light of likely weaker Rupee. Pharma, Consumer and FMCG provide great opportunity in the backdrop of increasing Indian incomes. Banking/Financials (Private and some public sector) can be the drivers due to increasing need for penetration. Within these sectors, we would like to focus on midcaps and select small caps to provide better alpha to our investors.
Western Champions
Hemant Rustagi, Wiseinvest Advisors, Mumbai
I believe that equities will do well in 2014 and beyond. The macro-economic environment is expected to improve and the growth is likely to accelerate going forward. Of course, the outcome of general elections is likely to play a major role in the stability as well as the level of performance of the markets and removal of uncertainties. However, it is becoming quite evident that whoever comes into power will have to push reforms and perform as the electorate's mindset is changing. The economic growth can be expected to be better than what we have been witnessing in the recent years. The rupee is likely to remain range bound. Besides, equity as an asset class is under-owned. All these factors should contribute to equity market's good show in 2014.
Within equity, I would recommend a portfolio that has a bias towards large cap (exposure of 60 percent or more). In other words, the bread and butter of the equity portfolio should be large cap stocks or funds investing in these stocks. A combination of funds following different philosophies like taking concentrated bets and having a well diversified portfolio would be ideal. Out of the remaining 40 percent, a major part can be allocated to mid-cap funds. Since stock picking is crucial specifically for small and mid-cap segments, investors need to select funds that have a consistent performance track record.
Nikhil Naik, Naik Wealth, Mumbai
We are extremely bullish on equities at this point of time. . We do not follow a sectoral outlook- we do not get our clients into sectoral funds as such. Instead of Top-down we follow a bottoms-up strategy - and identify the scrips and recommend them to clients
Mona Faikh, Allegiance Advisors Pvt Ltd, Mumbai
We see volatility in the 1st few months, and that we see as an opportunity for investment. Overall very bullish. We would be overweight on mid cap and small cap and flexi.
Roopa Venkatakrishnan, Mumbai
My view on equities for the next 4-5 years is positive, investors can create huge wealth for themselves. As equities don't give returns in one specific year its better to look at 4-5 yrs.
It's important to have an asset allocation at any point of time as per the investors risk return profile, rather than overweight on a particular segment.
The mid-cap and small cap funds and also the infrastructure sector will indeed add a lot of alpha in the clients portfolio for the next few years, but for that the horizon should be 4-5 years.
Mukesh Dedhia, Ghalla & Bhansali Securities Pvt. Ltd, Mumbai
I am positive for equities for 2014. I would prefer I.T in particular, and Pharma and FMCG selectively. Also Auto can be accumulated. MNCs to be preferred .
Sangeeta S. Jhaveri, Prescient Financial Solutions, Mumbai
Even though the Sensex has made an all-time high recently, it does not have the force of a classical bull market. Gains are likely to be moderate in 2014. It has strong support at 18000. Further, the disparity between the Sensex and the broader market is pronounced with a large number of stocks close to multiyear lows. A positive political outcome should see strong gains in the beaten down sectors like infrastructure and PSU banks.
Gajendra Kothari, Etica Wealth, Mumbai
I guess 2014 should be a good year for equities. Elections will play a major role in setting the trend followed by strong corporate results. We are bullish on Banks, Infrastructure and other cyclicals.
Milind Chitnis, Chitnis Financial Planners, Mumbai
After 6 lack luster years, over next 3 years, we expect equities to do substantially better than debt. Currently we are positive about thematic funds which are focussing on export related industries (e.g. ICICI's Pharma and Export Services Fund) and to those of our clients who understand the risk, we are recommending it.
Hari Kamat, Hari G. Kamat's Investment Avenue, Panjim
Difficult to predict being an election year but still I will remain overweight in sectors like pharma , IT.
Rajesh Chheda, Registered Investment Advisor, Finance Factory, Panjim Goa
Equities per se are always good. In a bad market or good market, select equities whether in India or USA have multiplied or given handsome returns. Multibaggers do happen. The herculean task is in selecting the stocks. As far as segments are concerned, I personally look at individual stocks, their merits, management view and most important being corporate ethics. One slight doubt in that area, and I would prefer to stay away from that stock, however promising it may appear.
Bharat Phatak, Wealth Managers India Pvt Ltd, Pune
2014 is not easy to call. Globally, the QE taper has begun. One sees the US 10-Year treasury bonds inching close to 3%, while the inflation still remains tepid. This means positive real interest rates for US investors. Hence, debt flows to emerging markets can get severely constrained.
Locally, we face General Elections. A positive outcome can benefit Equities. Today, everyone seems to be optimistic about this. However, a hung parliament with a lame duck government can lead to a credit rating downgrade and pressure on the currency. In this situation, equities can tank.
Hence, one will need to position for a longer term exposure of at least 3 years and not look at just 2014. This has to be balance between secular growth sectors and policy sensitive sectors. A backup plan to add more in case of the equity price erosion will also be necessary.
Rashmin Avinash Deshpande, Insynch Wealth Management LLP, Pune
Very Positive in the first quarter and subsequent to that election will drive the direction.
Banking space looks very attractively priced.
Amit Bivalkar, Sapient Wealth Advisors and Brokers Pvt Ltd, Pune
Elections are the biggest event that everybody is looking forward to in 2014. It can be quite a major game changer. For the last five years, the braod market has not gone anywhere. Only 40% of Sensex stocks have seen a good run, 60% are undervalued as earnings have risen but prices have remained flat. There is definite value in the market today. Hence we have a very optimistic view on Equities in the year 2014. If markets go down 10-15% in the coming months due to any uncertainties, one should add to equity holdings in such corrections, especially if you are still underweight equities. Maintaining your asset allocation is going to be key to success - don't go overboard on either direction based on any news flow.
I think we have deep value in mid-caps as well as in small-caps so in that segment, you clearly have a lot of unlocking of value which is possible. I think once the interest rates come down, then you will have the banking sector, especially PSU banks, which will do well in the next couple of years.
You could look at going into the oil sector also- oil and gas- because you will have diesel Deregulation - we have stocks like HPCL, Reliance etc., which will benefit a lot from this move.
V. Vijayarangan, Vijay Financial Consultants Pvt Ltd, Pune
Markets will continue to be volatile ahead of Election - big risk for equities in short erm. Having said this, investing in equity is the best bet over a long period of time. We believe in Time spent in the market is more important than timing the market. We all know that sensex and nifty are close to their all time high, but midcap and small cap index are still below their previous highs. We are now experiencing a more volatile market and because of this there are opportunities to make money in equity, a long term view and systematic investment approach will help investors to achieve their financial goals.
Jignesh V. Shah, Surat
We are bullish in Equities for 2014. We expect the returns to be better than the last 5 years. I strongly believe that diversified equity funds will eventually be a best bet than any particular segment.
Raj Talati, CFP, ABM Investment, Vadodara
Equity seems very attractive at this point in time for investor with a time horizon of 2 to 3 years. I feel midcap is very much beaten down, there is big opportunity in that segment on selective basis.
Bhadresh J. Jhaveri, Jhaveri Securities Ltd, Vadodara
Indian Equity Markets look more promising in 2014 compared to the roller coaster ride of 2013. Silver linings have started emerging in these dark times. With the improvements in few Macro Economic factors and the hope of getting a stable government in the coming General elections, 2014 looks more promising.
In terms of segments, we are positive on Export Oriented Companies esp. in Pharma and IT sector. We are also positive on Capital Goods segment.
Sandeep Gandhi, Mega, Rajkot
I am clearly bullish about the market, as all the bad things that can happen has happened and equities being a lead indicator should perform as an asset class. Banking sector again being the lead indicator of the economy. IT & Software as a hedge against the currency depreciation and infra as a contra bet.
Siddharth Shah, Master Investment Broker, Shalibhadra, Ahmedabad
2014 will be good. General fear for the equity will disappear. We will like to allocate 50/50 in Largecap and Midcap
Killol Ringwala, Safe Assets, Ahmedabad
We are cautiously optimistic on equities purely from valuation angle and improving macro environment. The risk to the outlook remains political uncertainty and sudden result of global liquidity. Looking at very low equity allocation in the client's portfolio we would seek client money in well diversified funds, having 5 years plus track record
Aasit Shah, S&A Wealth Managers, Ahmedabad
Very positive outlook, equities will outperform major asset classes in the year, should remain overweight on mid caps within equity as a segment.
Pramod Saraf, Swan Finance Ltd, Indore
After the recent run up in Indian equities, we expect the market to consolidate over the next couple of months. We believe that the equity market will continue to follow the earnings trajectory and will continue to closely look out for both global as well as domestic cues. Sector rotation may well continue in 2014 as there is no clear outlook till the parliamentary elections and even after that it will take some time before growth and earnings bounce back.
The global and domestic market environment still has lot of uncertainty. Inflation, slowdown in capital expenditure, stress in corporate balance sheets due to leverage and looming elections are factors which will play on market sentiment. We are still some time away from a strong buy signal for equities.
Just to give you some specifics in terms of the Indian markets, we do think that there are great opportunities within the markets, in particular in sectors like technology, industrials and healthcare, but we are a little bit concerned in terms of the impact of tapering. We are expecting tapering to take place sometime in Q1 and on the back of that, we are expecting yields to pick up in the US and also the US dollar strengthening against, aside from other currencies, the Indian rupee.
We prefer to participate in the market via export oriented sectors such as IT and health care, which benefit from a weak rupee. We are cautious on consumer discretionary, real estate and state owned banks.
What do you think?
There is clearly optimism in the air, tinged with a hint of nervousness about the election outcome. We haven't seen this level of optimism on equity markets in a while - it sure is a most welcome sign! A majority of these leading advisors are quite bullish on equity markets, and the more favoured themes seem to be the ones that have performed in the last 3-4 months : IT and mid caps. Pure large caps seem to find less favour as compared to their more diversified counterparts and other thematic counterparts. Amidst all the optimism, there is also some wise counsel on the need to be wary of potential setbacks.
What do you think? Are you optimistic on equity markets as we begin 2014? Is this year going to be the year of equities as an asset class? Which segments of equity markets and which themes will you recommend to your clients now? Share your thoughts, just as some of the leading advisors have, for the benefit of the wider distribution fraternity, by posting your views in the box below - its YOUR forum!
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Wealth Forum wishes you a very happy, healthy and prosperous 2014! The beginning of the year is when you read up market and business outlooks from fund managers and industry captains that help you shape your own outlook for the year ahead. This year, we decided to kick-start the 2014 outlook series a little differently. In this 3-part article series, we carry equity, debt and business outlooks from over 40 of India's leading IFAs across 20 cities. What better way to sharpen your own perspectives, than to understand the outlooks of over 40 champions from your own fraternity? We are very grateful to these leading advisors who spared their time in the last week of December, through their holidays, to share their thoughts for the benefit of the wider distribution fraternity
