Exclusive: Coronavirus impact on economy more serious than 2008 crisis, says Helios Capitals Samir Arora

The 2008 financial crisis was primarily US driven and the current Coronavirus crisis is different and more serious, Samir Arora of Helios Capital told Zee Business Managing Editor Anil Singhvi.

The economy will take at least six months to recover, he warned.

The Indian markets. which usually take cues from the American markets had a similar impact during the 2008 crisis, Samir Arora said. The US markets had then fallen by about 60%, he said.

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Arora said that even though one-year profits of the companies have been wiped-off, shares should still not have gone down by more than 15%. 

Importantly, he told investors to focus on shares which have fallen by over 30%. However, investors should avoid those shares that have fallen by around 10% or 70%.

He explained that though the current stock valuations are low, there is still no clarity on which way the market will move. He added, "If there are indications in the next 15-20 days as to whether the market has peaked or plateaued or some vaccine is invented that could bring down the scare."
 
Arora added the good thing is that the Covid-19 is a flu related problem, whose cure would be ultimately found. The cure will be found, the question is only about the time taken.

On the economy, Arora indicated that the economy has been closed and the secondary effects are still not known. He said, "In a country like India, the secondary effects are also of sizable proportions. Sectors like micro finance have been impacted adversely. All these things will have to be repaired to bring things to the normal."

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He concluded by saying that the biggest challenge before the government is to see how daily wagers or small businesses are extended help.