D-Street Voice: Chinese Evergrande crisis unlikely to cause a major impact on India: Gaurav Misra of Mirae Asset

Gaurav Misra, Co-Head Equity, Mirae Asset Investment Managers (India) Pvt Ltd, said that the Chinese government was any way trying to cool down the property sector and any policy missteps could lead to more prolonged problems. For India, we do not see much of an impact either at this point.

Misra manages Mirae Asset Focused Fund and co-manages Mirae Asset Large Cap Fund. Prior to joining Mirae Asset Mutual Fund, he was associated with ASK Investment Managers Pvt Ltd for 14 years.
 

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In an interview with Zeebiz's Kshitij Anand, Misra said that the broad sense is that there shouldn’t be any contagion on this count. The reserves and fiscal space of the Chinese government would help. Edited Excerpts:

Q) How will the US Fed outlook impact equity, currency markets? Even though the clarity has emerged but can lead to a reversal of funds from FIIs?

A) The expectations are in a way already built-in. While some volatility cannot be ruled out, but the strength of the domestic recovery and domestic flows will be more important.

Indian macros, corporate sector growth, and health are better than in similar situations earlier.

Q) What are your views on the impact of the fallout of Evergrande on the Indian market and sectors in specific?

A) The broad sense is that there shouldn’t be any contagion on this count. The reserves and fiscal space of the Chinese government would help.

While the Chinese government was any way trying to cool down the property sector, any policy missteps could lead to more prolonged problems. For India, we do not see much of an impact either at this point.

Q) How are FIIs looking at India? They have turned net buyers after 5 consecutive months of being net sellers at least in the cash segment of the Indian equity markets?

A) Investors will be assessing the strength of the recovery, absence of a strong third wave so far/strong vaccination rates and structural aspects of the India story in their allocation decisions.

Q) What is your call on markets for the next 6-12 months? Nifty eyes 18000 while the S&P BSE Sensex is on course to hit 60000?

A) It is very difficult to suggest where the market might be in the next 6 months, but for investors, with a longer (+1 year) horizon, equities will give better returns than most alternatives.

Q) The market is rising on the backdrop of expensive valuations when compared to history? How does the number stack up for Nifty as well as for mid, and small cap indices?

A) Yes, markets across market caps are above historical averages. They cannot always be at the average and will overshoot or undershoot.  

Q) Which sectors will take Nifty50 from 18000-20000 in near future?

A) I cannot comment on the index levels but sectors such as BFSI have scope to do well from a combination of earnings growth and potential rerating.

Q) The market is giving plenty of opportunities to investors to make money, but how should one avoid losing money in this market?

A) Volatility is inherent with equities. However, appropriate investment objectives/horizon/asset allocation is a good starting point. Aligning or being comfortable with one’s (or managers) investment style/philosophy is important.
 
Q) What is your investment philosophy? Has your holding in cash increased amid the recent run up in prices?

A) Investment philosophy is to buy strong well run growth businesses at the best possible margin of safety. Additionally, at the portfolio level, we keep space for deep value businesses as well. We do not take cash calls.

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)