Market Guru in talk with RJ Salil Acharya of Radio City: Huge demand is expected in hotel stocks
In his next question, RJ Salil talked about inflation and said that RBI has had a lot of discussions about this inflation and some discussions were also made in the past few weeks.
Anil Singhvi, Managing Editor, Zee Business, says, the market will turn bearish or weak only when Nifty will close below the 17,300-mark. During a candid radio podcast, “Kadak Currency’, with RJ Salil Acharya, Radio City, 91.1 FM, Mumbai, Mr Singhvi said hotel stocks have performed a bit but some bullishness is left in it. At the same time, In addition, the stocks related to tour & travels and food will remain strong if there are no problems associated with CORONA.
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RJ Salil at the start of the podcast, ‘Kadak Currency’ said, are you now the only person with such thoughts who feel that this is more power and steam is there in the market and a lot of doubters are there or everyone has reached to your level? Mr Singhvi replied to the question by saying when the markets trade at the lifetime high, and no one has any idea of how high it can go, the sky is open, fly as much you can, but if you have an idea of how much you can fall, then you get the complete upside, i.e., you should know how high you can go. My formula is simple and that is to be careful when the market trades below a certain level and that level is around 17,300. Until the Nifty doesn't close below 17,300-mark, there is no need to think about bearishness or weakness. Nifty at any point can fluctuate by 400-500 points in either direction and it should be happening. A correction of 2-3% is termed as running correction. So, my point is simple, we are trading around 18,000, if there is a fall of 500-600 points you must not be afraid but be alert when it closes below the 17,300-level expecting that the weakness may increase from here. Don't worry till then.
Continuing the podcast further, RJ Salil said, big players are playing well - the heavyweight stocks - but if we have a close look on the market then you will get to know that portfolio of many people is running but the stocks they have do not run at times. Do you see that the medium and small caps are running strongly or the market is running just because big players are playing well? To which Mr Singhvi (smiled) and said, when you buy shares then your horoscope also moves along with the share orders, it is known that Salil has bought this, it should not work. But for your information, let me tell you that the MiCap index has also created a new record high. So, there was some sluggishness in the middle but the MidCap and SmallCap shares are also strengthening themselves now. As you know and it happens that the same shares do not work every time. It is a mix in which some shares are new, which didn't perform in the previous bullishness has started moving and some are those good shares, which declined due the mood and atmosphere of the market have started moving. So, it is a mix. It may happen that if our shares selection is wrong but then we will have to wait as not all stocks run at the same time. So, don't worry, if the quality is good and the company is also good then your share will also work.
In his next question, RJ Salil talked about inflation and said that RBI has had a lot of discussions about this inflation and some discussions were also made in the past few weeks. Do you think that it can be a big problem as many stocks market Gurus who have contrary views are saying that it is not getting as much attention as it should? To which Mr Singhvi said, 100% it can happen and there is no doubt. And, sayings that it is not getting as much attention as it should get is also true. But who are we to decide that when the market should focus, either at 9:15 am or 3:30 pm, today or tomorrow, or next week or next month. In the collective decision of the market, when it will feel that it has to react, it will be given but it will definitely react to it. Wait for it because this is imported inflation, i.e., the crude it is not in our hands; the price hike in soft commodities like sugar, rice, cotton among others is global; prices of metals from steel to copper and zinc among others have grown globally. What do you have in your hands? There is only one thing that RBI can do. It should bring under control the increased prices of food items and reduce the prices of edible oils a bit. So, you can control the local inflation by improving the supply side but we do not have any control - after an extent - on the global inflation that is coming being imported. If I will tell you today - many people want to listen to it as it will please their ears - if there is a correction in the markets across the world, there is a correction in the Indian markets, then rising inflation will be the only cause for it, which will have an impact on everything, inflation will increase, the interest rates will increase, some amount of money will move out from the equities to fixed income, globally, and it will impact our market and the markets around the world. So, if there is a correction then inflation will be the sole reason for it.
In his next question of the podcast, ‘Kadak Currency’, RJ Salil said, issues related to China is coming one after the other. Earlier, there was a big real estate company and now there is a new real estate company. Few of my friends sitting in America are saying that now attractive investments can be made in India because there is an alternative to China. But there is a slight change in India's rating as countries like Thailand among others are being considered above India. The rating agency has not changed the ratings but has changed its outlook from negative to stable. Will it benefit us? Replying to the question, Mr Singhvi talked about the film in which Asrani, was a police inspector, who reaches to a sight of the incident after the hero has already killed the villain and touches the nerves of the person and says he is dead, but he should be arrested and this is a situation of the rating agencies. They wake up after everything happens. They will not wake up now but will come into play when our economy will turn stronger as they do not foresee the future but they peep into the past. They drive by looking at the rear mirror. If Moody's has not increased our rating and just changed the outlook from negative to stable, it is their choice. India is just not strong; it is very strong. Our economy in the last two years, forget that two years, talk with the corporate, I interview them every day. A lot of companies are there who say that they haven't seen such a strong demand in their life, which they are seeing right now. Stocks are not available with people, orders are huge. I don't know, what is that Moody's want to see. I was hoping for a rating upgrade.
To which RJ Salil said, would a rating upgrade have made a big difference and the market could have taken a big leap? Mr Singhvi in his reply said, if there is a designation upgrade in Mr Salil's designation then will it make any difference or not? RJ Salil smiled and said, of course, it will happen. Continuing the talk Mr Singhvi said, it does make a difference. It is a matter of sentiment as there is an increase in our respect. But more than this, when you take a foreign loan, the interest rates on that foreign loan goes down. You raise money from the international market based on your ratings. There is a rating upgrade for our companies, which means, we get more money at lower interest rates. Respect towards us increases financially. This is why, I feel that the rating should be increased, we don't need their certificate, we are strong and Moody's along with us knows it. You have named certain countries like Thailand and Vietnam; they are quite ahead in increasing their ratings. In fact, if any European country fails or even defaults then they will think 10 times before downgrading their rating. But they think 10 times before upgrading the rating for our Elephant, giant India. They are quite biased, so, we don't care whether Moody's increases it or not, let it go.
Seeking stocks recommendation from Mr Singhvi, RJ Salil said two industries were eagerly waiting for this month and they are Cinema - there are listed companies with Cinemas - and tourism, it was making slight recovery for a long time. Do you think that in the next three months - as there is a season and people want to move out and theatres are opening - we can see some bullishness in these stocks? Mr Singhvi said, the last flight from Delhi to Mumbai is at 9:55 pm and there is no place, there is no place to set foot, i.e., almost packed. This is the situation, which means people are getting out for business as well as for holidaying. Undoubtedly, the next six months - may God not do so and we all should maintain safe and there is no other threat of Corona due to which we will have to sit at the homes - the industry will come to the fore with such fanfare as it there was a demand for cement, real estate companies and clothes. You will get a chance to see similar demand here as well. Of course, these stocks have performed a bit but I think some bullishness is still left in the hotel stocks. In addition, the stocks related to tour and travels as well as food will remain strong.
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12:58 PM IST