Zee Business Managing Editor Anil Singhvi said that last one year has been a rough ride for stock market participants. It has been a year now when markets hit their bottom. Nifty had plunged to 7500-level, but now has recovered back to levels of over 15000! Today, Anil Singhvi spoke to Sunil Singhania, Fund Manager at Abakkus Fund Management, to guide investors as well as to show where opportunities lie going forward.

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Sunil Singhania said that last year at this time, the economy had shut down and everyone was working from home. Uncertainty was the key issue. Now, Singhania said that investors should invest in markets when there is a good value opportunity. It yields them good returns over a period of time. That also means, investing when markets are soaring, will not give the best returns. He added that investors should invest in equity with a view of 3 to 5 years. 

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Singhania warned that investors will face a lot of obstacles in their journey and that they should learn from their mistakes and experiences and grow through this journey of investment. Markets will remain volatile but investors should have a long-term horizon while investing in equities. 

What is significant, he said that long term investors will eventually get returns in equity markets.

Sunil Singhania said it had been shocking to see the world economy collapsing so fast. Investors knew they would make a lot of money if they invest in the fall, but the issue was uncertainty.  Very survival was at stake for everyone. It was only after 3 to 6 months of the lockdown that Sales, Consumption and spending resumed. Eventually, pent up demand, low interest rates and excess liquidity gave a boost to global markets.

As things stand today, Singhania said that the composition of Nifty has changed. PE ratio has improved to 18-18.5 from 16-16.5. Nifty is not very expensive nor is it cheap, it is fairly valued at current levels. Investing in sector specific stocks will yield good returns from here on as well. Government has taken action which has given a boost to many sectors in the economy. Privatisation and spending on capital expenditure has improved. There are many schemes which will improve spending on Indian economy. GDP of India could improve back to 7%-8% going forward.

Sunil Singhania says that in the US the 10 year interest rates have moved up a little. He said that interest rates returning to pre covid levels should not be a matter of worry. Economic growth has not returned to normalcy as yet, and the stimulus measures are not going away as of now. Interest rates will remain low for the next 3-4 years. Corrections of 5%-7% will keep coming and it is normal correction. Investors should use the dips as a good buying opportunity.

Singhania says that it is important to balance Greed and Fear. Covid Vaccination is easing the worries regarding health and slowly things will stabilize.  Investors should stay positive on India as they will make good money here. He said that when the economy does well, Mid sized and small sized companies grow much faster than Large cap companies. Digital companies and local brand companies are relatively small. Valuations of these companies are extremely attractive with huge growth potential.

Singhania says that the Digital economy has huge growth potential from here as well. Pharma sector will also outshine going forward. Corporate lending and Credit Growth will improve growth of financials and the NPA situation seems to be resolved. Retail focused and consumer centric focussed companies will do well as economy returns to normalcy. Companies in this segment which have survived the pandemic will also do well. Sunil Singhania says that the Make in India theme will also do wonders for many companies.  

Singhania says that Fixed Income assets are good for safety purposes but not good in terms of wealth creation. Gold has consolidated for a while and looks good from here on the upside. 
Singhania said he is not confident in Real Estate Investment. He said it is a great time to buy a home for for yourself as it's a dream to have your own house to live in. Interest rates are low which is highly attractive.