Market Guru in talk with RJ Salil Acharya of Radio City: People should try to protect their money in this volatile market

Try to protect your money in this volatile money instead of making any attempt to earn from the market. Invest once the clouds of global tensions are over and the market provides an opportunity to invest in it, says Anil Singhvi, Managing Editor, Zee Business. During a candid radio podcast, 'Kadak Currency’, with RJ Salil Acharya, Radio City, 91.1 FM, Mumbai, Mr Singhvi said investors should stay away from IT and Banking stocks if there is a war between Russia and Ukraine as the war will have a bad impact on these sectors.

RJ Salil started the podcast, 'Kadak Currency' by talking about the Russia-Ukraine issue and the possibility of explosions and said the matter of war is over and above natural issues. So, what do you think and are we doing to have problems in the coming near term? To which Mr Singhvi said, it is that one should not fight and those who have to fight will never say that I will see you, in fact, they come straight and fight directly. So they are showing their eyes to each other for the last 15-20 days. If seen deeply then they have been showing eyes to each other for many months. Now, Ukraine can't do much as it is small and weak compared to Russia. Russia has to show grandeur and America has to jump in the middle. So, these little things will go on and on. First of all, it is less likely that there will be a complete war if it happens, it will be for a day or two and I would say that whatever has to happen, should happen and even if it doesn't have to happen, then it should be made clear. So, I think, the complete situation will turn clear in the next two weeks. There is a possibility that there will be no war because Ukraine is sending signs that hint that it doesn't want a war and is also ready to step back. Thus, Russia's work is done allowing Mr Putin to praise himself saying I have made it happen, while America would also like to see that the two do not fight, which means it can say with pride that our interference has saved both from fighting, thus we are the most powerful nation. So, I think, going without a war is in favour of the three, so, the talks and threatens will make them agree and in a week or 10 days, things will get back to normal.

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In his next question, RJ Salil said that the upward revisions in the interest rates on home loans almost everywhere have discontinued the happy or discount days for people and the interest on home loans have gone up to 6.90% and 7.35% from 6.40%. Do you think that this increase in the home loan rates will be a deterrent or it will excite people to buy? Mr Singhvi said, the interest rates are no more at the lifetime lows and has to increase further from here and there are some signs of an increase in the interest rates and it will increase a little more. So, I think, that interest rates are good for those who have to buy and they should buy as you can't always buy everything at the bottom and sell it at the top. The same is the situation in the case of home loans. However, the rates are near the bottom and it is best for those for whom there is a need to buy a house. Generally, people think that if there is an increase in the home loan rates then the demand for real estate will reduce or the prices will go down. It will not happen so fast because you can raise the prices only when the demand is strong and it is quite strong at present. So, I think, those who want to buy a house for consumption purposes have a golden chance as the rates are good and you are getting good properties in ready conditions then you must buy those.

Continuing the podcast, 'Kadak Currency' further, RJ Salil talked about the Q3FY22 results of the public sector banks, which is strong and their books are also quite strong. He said, in our conversation two years back we talked that banks are the institution on which all the lending and borrowing can happen. So, is it so that India's banking situation is very strong now due to which liquidity will be very high in the country? Mr Singhvi in his reply said that companies are posting strong results. The economy is clearly giving signals of a slight uptick and you can directly term banks as its barometer. If the economy will do well then only the banks can do well, if the economy is back then the results of the banks cannot be good. Ultimately, the bank is in the business of depositing and lending money. There are just two conditions under which someone will take a loan either the person is very sad or the person thinks that money can be earned from the borrowed money. So, sad people are less in the ongoing situation and more people are those who want to borrow and invest in the industry or business and want to grow from it and make big money. So, this situation is good for the bank and I think that the results are quite strong.

The second thing that is happening good for the banks - the last three to five years were quite bad for the banks, as their loans turned into bad loans and NPAs - now, as the economic situation is improving, there are many loans, which turned zero or bad debt in the past, are slowly recovering, When there is a recovery, it gets added directly to your pocket. So, for both the reasons, due to the recovery as well as the economic recovery, the banks are posting strong results and it will continue to happen the same. The public sector banks (PSBs) are likely to post strong results for at least a year from here.

After this, RJ Salil asked about the sectors that will not have an impact on the rising tensions of the world or rate cuts talk by the Fed among others like the technology stocks that have behaved bullishly across the world. Can you name a few sectors from which we should stay away for the next two to three months? To which Mr Singhvi said, if you want to stay away due to the tensions in the global markets or the fear of war between Russia and Ukraine then you should stay away from IT and banks, both the sectors will remain bad if such a thing occurs. But, one thing has to be kept in mind that the mood and atmosphere can change any day, suddenly someday both of them will say that we will not fight, let's join the hands. After this, the global markets will be at a buzz. The point is that for the next one to two weeks, there will be huge fluctuations in the market, there will be no one-sided bullishness or one-sided fall. Possibly, there will be a day when you will wake up with the news that the mood and atmosphere of the market have changed drastically. So, there will be slight volatility. In such a situation, I will just suggest you not to make attempts to earn money at all, just think about the ways to save money, as the one that is saved is your own and you can invest it in the market when it allows doing so. You can invest the money once after these clouds of global tensions comes to an end.