We see increased interest of Indian investors in US markets in sectors like AI and Robotics: Sitashwa Srivastava of Stockal

For 2022, we foresee an increased interest in sectors like AI and Robotics, which will include companies like Fanuc, C3 AI, Intuitive Surgical and TuSimple Holdings, Sitashwa Srivastava - Co-Founder & Co-CEO - Stockal – said in an interview with Zeebiz’s Kshitij Anand.

Sitashwa has a background in crowdsourcing platforms, fintech, business consulting, and consumer marketing. After starting his career building clearing platform technology for 14 large UK-based banks at Perot Systems, Sitashwa went on to work with Cognizant in the areas of consulting and technology-oriented marketing for large. Edited Excerpts:

Q) What a year it has been for the Indian equity markets, especially when it comes to investing in international equities. How do you sum up the trend in 2021?

A) 2021 has been a great year for investors in general. Global, as well as the Indian market, did well overall. With the pandemic, not letting up, investors continued to enter the stock markets.

There were enough short-term opportunities and trends that kept investors hooked. Indian investors, more so the millennials have increasingly scaled up their investments in the US markets in order to globally diversify their portfolios.

More awareness, seamless access and hassle-free account opening processes with players like Stockal have expedited the process.
 
Q) What should be the strategy of investors amid the potential rise in interest rates by US Fed in 2022?

A) Rise in interest rates is likely to be more favourable to cyclical sectors/consumption and recovery sectors post the pandemic overgrowth and technology stocks.

Large corporates would likely see their margins being impacted due to a rise in borrowing costs. Higher interest rates are also favourable for banking stocks like Citi, Bank of America apart from the regional banks.

Q) What is the kind of money riding on different markets?

A) I will look at it in terms of market cap growth seen over the year which eventually shows the increased participation of investors. When you look at data from Bloomberg as of the end of 2021, in terms of market cap, the United States had a 44% share of the aggregate global stock market cap; topping the next largest country, China, by a factor of over four.

As shown below, the US has seen its share of the world market cap increase by 2.84 percentage points so far in 2021, which is a huge gain.

This shouldn't come as too much of a surprise though, given that the US has outperformed nearly every major country stock market this year.
 
Q) What is the trend that you see from India – ETFs or stocks? What does the trend suggest for the year 2021?

A) Indian investors are most comfortable with ETFs since they are mostly passive funds with low-risk exposure apart from investing in FAANG stocks.

However, some investors have gained experience on the trending themes and stocks in the U.S. and want to look at disruptive themes like AI Robotics, SAAS, and other sub-segments of technology outside FAANG.

For 2022, we foresee an increased interest in sectors like AI and Robotics which will include companies like Fanuc, C3 AI, Intuitive Surgical, and TuSimple Holdings.

Another sector to look out for will be Digital Economy and we suggest investors keep an eye on companies like Shopify, Coinbase, SentinelOne and Unity Technologies.
 
Q) Which are the new stocks apart from FAANG, which the Indian investors are putting their money into?

A) Indian investors are increasingly participating in sectors and stocks outside FAANG.  Some of the popular ones include semiconductor stocks, software-as-a-service (SAAS) companies, electric vehicle space, e-commerce, healthcare, and vaccine stocks.

Additionally, video streaming companies are also witnessing some great traction, given the continuance of consumption of content in absence of large social events.

They are also aware of the trends on Reddit bets and do pick up ques from there for trading, for example, trading in Meme stocks like Gamestop and AMC in the first half of the year which caught the attention of Indian investors.

Q) What is the kind of IPOs/new companies that are likely to hit US markets in 2022?

A) We have seen major interest towards popular IPOs like Coinbase, Robinhood and more recently the EV major Rivian’s IPO post the listing in the secondary market.

In 2022 we have some large IPOs scheduled for the first half of the year. Stripe in the BNPL space (technology sector) is expected to go public with a valuation of $100 billion.

We also have an Insta cart with a valuation of $40 billion scheduled for early next year. These are the 2 big IPOs expected in early 2022 apart from many other smaller ones.

Q) Any new products which you plan to start or have started recently?

A) In the near term, we plan to bring in more themes on the stacks as we see increased participation in stacks (Curated portfolios). We currently have 6-8 themes in stacks in the ESG, EVs. Technology, Healthcare, and the likes.

We may also open up to investing in global mutual funds on our platform in the future as a step ahead after seeing good attention in global stocks and ETFs.

Q) What is the trend that you see for sectors like EV, tech as well as blockchain? What is the kind of money that is rising in these sectors? And, any top companies?

A) Technology and EVs have been the trending themes among investors in the recent past. Cloud, digital life, Robotics & AI are all the disruptive technology themes for investors.

EV majors like Tesla and now the recently IPOed Rivian is set to take over the growth potential of the EV segment, along with several other battery and EV charging companies operating in this space.

Coming to Blockchain, which is relatively new for Indian investors, Indians are slowly getting into understanding blockchains as a whole.

Crytos have always been highly volatile and mostly accessed by high-risk traders who are willing to take the risk for high returns.

In order to mitigate the risks involved in the Crypto market, SEC has now made it regulatory by listing some of the Bitcoin futures ETFs on the exchange.

The first is BITO, which was listed in October followed by 2-3 more players. 2021 was also a year for NFTs (Non-fungible tokens) which is relatively new in the blockchain space. We have seen several new players in this space apart from the most popular OpenSea.

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