10 January 2015

Equity Investment – Risky but Necessary


Mr.Sandip Sabharwal
Mr. Sandip Sabharwal talked about the risks in the market in the past and future areas of concerns, but feels that incrementally things are much better today than six months ago. Indian markets are now integrated with world & prone to global shocks.

He then talked about Wave Theory-Wave1 which was the bull market 2003-07 for a period of 58 months. Then we enter Wave-2 when bubble of real estate, stocks etc. burst, This phase was also of global nature which came to an end in March 2009.

Wave-3 saw strong market recovery in March 2009 as a result of stabilization measures of various central Banks. Wave-4 was The Indian markets moved up in tandem with most of global markets. The first leg of this big change for the economy was when Rajan took over as RBI Governor& the second leg with Formation of politically stable BJP Govt at the centre. In this wave-4 key contribution factors are Political stability, High savings rate, High capital inflows, a strong financial system, & huge investments in Infrastructure.

Mr.Sabharwal feels that wave-4  will be backed by low inflation, low interest rates, reduced crude & metal prices, & resultant reduced CAD to 1.5% should take the Sensex to a level of 75,000 by 2020.