Nilesh Shah, Deputy MD, ICICI Prudential Asset Management Co Ltd talks to Gopal Modi the sidelines of launch of company's new fund 'Focused Equity Fund'. Shah shares his views on Indian stock markets and India's growth rate.
Where is the Indian market heading in the FY2008-09?
Indian markets are fairly priced at 16,000 mark and we expect a growth of around 15-20% for the FY 2008-09 and the same can be expected for the next three to five years. In FY09 earnings along with strong fundamentals, increase in direct tax collections leading to GDP growth, domestic savings of around $350 billion and seventh largest foreign exchange reserves will drive the markets in spite of odds like higher fiscal deficit and inflations.
Which important events will affect Indian market in next six months to a year?
Indian stock market may remain volatile for next six months to a year as many important events are likely to come by. Events such as credit policy announcement by RBI may lead to hike in interest rates, which may affect stock markets. In the monsoon report which will be announced in May, it is estimated that global banks will further write off around USD $150-200 bn in coming quarters result of sub prime. With elections to follow, it will necessarily affect market and movement will be more sideways rather than one way.
Which sectors are likely to outperform and underperform market returns?
Indian markets are expected to be a consumption driven market and with disposable incomes on rise it will help outperform sectors like infrastructure, power, FMCG, while sectors like financial sector and export oriented sectors such as information technology, textile are likely to underperform.
What per cent of GDP growth rate is expected in current and coming financial years?
India also will be impacted as developed economies are going through bad phase. India is expected to manage a growth rate of around 7% to 7.5%. Global research houses have also lowered estimates for growth of Indian economy to 7% to 8.5% from earlier 9% to 9.5%.
Tell us more about your new fund offering and scheme objective.
'ICICI Prudential focused equity fund' is an open ended equity scheme which aims to invest in large cap stocks. Up to Rs 1,000 crore of total asset under management under this scheme will be invested in top 20 market capitalisation companies picked from all over the world from National Stock Exchange (NSE). When market bounce back after correction, it is the large cap stocks who lead the market so our scheme objective is restricted to large cap companies. If company manages over Rs 1,000 crore it may increase number of companies from 20.
Performance of company's schemes vis-à-vis markets and other schemes in the FY 2007-08?
The Company has underperformed market returns of 30% in FY2007-08 as company's growth and power sector schemes did not perform well. We expect to give our investors 15-20% returns at least for the next three to five years. Company manages around Rs 54,321 crore of asset under management.
Where is the Indian market heading in the FY2008-09?
Indian markets are fairly priced at 16,000 mark and we expect a growth of around 15-20% for the FY 2008-09 and the same can be expected for the next three to five years. In FY09 earnings along with strong fundamentals, increase in direct tax collections leading to GDP growth, domestic savings of around $350 billion and seventh largest foreign exchange reserves will drive the markets in spite of odds like higher fiscal deficit and inflations.
Which important events will affect Indian market in next six months to a year?
Indian stock market may remain volatile for next six months to a year as many important events are likely to come by. Events such as credit policy announcement by RBI may lead to hike in interest rates, which may affect stock markets. In the monsoon report which will be announced in May, it is estimated that global banks will further write off around USD $150-200 bn in coming quarters result of sub prime. With elections to follow, it will necessarily affect market and movement will be more sideways rather than one way.
Which sectors are likely to outperform and underperform market returns?
Indian markets are expected to be a consumption driven market and with disposable incomes on rise it will help outperform sectors like infrastructure, power, FMCG, while sectors like financial sector and export oriented sectors such as information technology, textile are likely to underperform.
What per cent of GDP growth rate is expected in current and coming financial years?
India also will be impacted as developed economies are going through bad phase. India is expected to manage a growth rate of around 7% to 7.5%. Global research houses have also lowered estimates for growth of Indian economy to 7% to 8.5% from earlier 9% to 9.5%.
Tell us more about your new fund offering and scheme objective.
'ICICI Prudential focused equity fund' is an open ended equity scheme which aims to invest in large cap stocks. Up to Rs 1,000 crore of total asset under management under this scheme will be invested in top 20 market capitalisation companies picked from all over the world from National Stock Exchange (NSE). When market bounce back after correction, it is the large cap stocks who lead the market so our scheme objective is restricted to large cap companies. If company manages over Rs 1,000 crore it may increase number of companies from 20.
Performance of company's schemes vis-à-vis markets and other schemes in the FY 2007-08?
The Company has underperformed market returns of 30% in FY2007-08 as company's growth and power sector schemes did not perform well. We expect to give our investors 15-20% returns at least for the next three to five years. Company manages around Rs 54,321 crore of asset under management.
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