Market Guru in talk with RJ Salil Acharya of Radio City: People can buy MidCap IT Stocks

Anil Singhvi, Managing Editor, Zee Business, says, the interest rates are going to stay in the same range at least for the next six months. During a candid radio podcast, “Kadak Currency’, with RJ Salil Acharya, Radio City, 91.1 FM, Mumbai, Mr Singhvi said people can buy midcap IT shares amid the ongoing correction in the MidCap and SmallCap stocks. 

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RJ Salil at the start of the podcast ‘Kadak Currency’ said, there was one thing that used to be without any risk in the past, the Fixed Deposits, but nowadays, many people have started withdrawing their money from here and putting them in the equity markets. We had discussed it a few days ago where you said that if you have an intention to buy a house then there is no better time than this. Also, in the next six months or a year, there is a talk in America that interest rates can be changed and increased. So do you think that even the rate of interest in the fixed deposits - which used to be in a range of 7.50-8% two years back even in the private companies like Mahindra and Godrej – will rise or they will be in the 5-6% range only. To which Mr Singhvi replied, it will stay in the same range and there is no sign that the interest rates will increase in the next six months because there is not such a strong demand due to which the interest rates have to be increased and the ongoing inflation is manageable. Yes, there are signs of an increase in the interest rates in the US in 2022 and then perhaps the global interest rates will try to strengthen themselves a bit, but every economy has its challenges, and they grow at its own pace. Looking at our economy, I think, we will be able to pass at least this year and around December, we will think about whether there can be a slight increase in the interest rates. So, I feel, for those who still have an intent to buy a house, this is a golden period as ready to possession, flats of your choice, lock and key along with interest rates historically low are available and prices haven’t gone up yet. This is a golden chance to buy a house. 

In his next question of the podcast, RJ Salil said, for those who want to buy a house needs cash these days. So, there is a possibility of re-mortgage the mortgage with the banks would you recommend such kind of financing because many of my friends are looking forward to such arrangement these days as they don’t want to leave the house but trying to collect money from any source? Is this a suitable method as the rate of interest is a bit high in this arrangement? Mr Singhvi in his reply to the question said you are supposed to pay more interest in the case of loan against property (LAP) as compared to the home loan. If you are supposed to pay the home to live in it then the home loan is workable in that case. But if you have a loan and want to shift into a big house then there is a great deal of confusion that to buy a new home the old should be sold first and if the old is sold then before going into the new one what if it is not bought. So, you will have to manage this confusion to do both things at a time. So, what you can do is that you can get your home loan pre-approved by any bank by saying that I need a big loan, please approve it. These are my financials and service request please approve them After this, you can start the leg work and start looking after the new house and put your house on sale. If you can manage the two things at the same time, then it will be a golden chance for you and a good option as you will be saved from the high interest rates. If you will still have to take it for a short term of 2-6 months like a bridge loan at higher rates for a period by which your house is sold and its money comes, and you have to finalize your second house then it does not hurt as you are taking it for yourself. 

Continuing the chat further, RJ Salil asked for Mr Singhvi’s recommendations that people can buy? Mr Singhvi said still there are opportunities to buy and midcap IT stocks still look very strong to me. This year is very strong for the IT companies. The results of the first quarter are very good and these companies are going to perform well this year. So, a correction is coming in the mid-cap and small-cap stocks, and you should buy the midcap IT shares.