In chat with Anil Singhvi, Anand Rathi Group Chairman says short-term investment risky; Pharma, IT likely to give good returns

As the Nifty scaled 12,000-mark on Tuesday, Zee Business Managing Editor Anil Singhvi had a candid conversation with Anand Rathi, Chairman of Anand Rathi Group regarding stock markets and what the investors should do now. The Market Guru set the conversation rolling by asking Rathi about how this time the Nifty's gains (1200-level) are different from the previous one. Responding to the question, Rathi said last time the situation was normal and there was good assessment about how the Indian and world economies would respond to change. 

However, this time there is uncertainty but, on the brighter side, there is good liquidity in the US market and the other markets around the world, including in India to some extent. He also underlined the importance of reduced interest rates and said when either of the two (good liquidity and reduced interest rate) or both of them exist in the market, the people’s ability to take risk becomes higher.  

The Market Guru agreed to the points made by Rathi and put up a pertinent question that is on many people's mind. Singhvi said that on the one side there is uncertainty regarding economic growth, on the other side everything appears normal on the stock market. Why this contrast, asked Singhvi. And what will change now — will the market come down or will the economy improve? 

To this, Rathi said there are chances that both could happen as there is over assessment about the economy’s performance. 

“There are several sectors such as hotel, airlines and SMEs that have suffered during the lockdown. However, there are also many sectors that have outperformed like Pharma and IT. FMCG, cement and steel have also started doing well. It is anticipated that GDP will turn positive in the first quarter of the next year,” Rathi Group chairman said.

See detail conversation below:

छोटी अवधि में निवेश को लेकर रहे सतर्क... ज़ी बिज़नेस के साथ एक्सक्लूसिव बातचीत में आनंद राठी ग्रूप के चेयरमैन आनंद राठी ने कहा, लंबी अवधि में IT, फार्मा और FMCG से अच्छे रिटर्न की उम्मीद#ZBizExclusive @AnilSinghvi_ @rathi_online #AnandRathi pic.twitter.com/wRKSsk51KY

— Zee Business (@ZeeBusiness) October 12, 2020

On what should investors do, Rathi advised them to invest considering risk-reward ratio. He said looking at the current economy, it’s time to adopt cautious optimism sentiment as there is good chance that market could swing both ways. The risk-reward ratio has come down in comparison to when Nifty had tanked to 8,000 level, hence short-term investment has to be properly weighed in while long-term is a good bait, Rathi said.   

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On which sector would be the right one to invest in the next 3 to 5 years, he said IT, Pharma and FMCG are very much likely to perform. He also suggested to keep a watch on banking stocks and advised to purchase them when there is clarity on NPA status.