It’s time to add risk appetite to your portfolio
Anish Jhaveri, CEO, Antique Finance Having weathered the global economic slump, corporate India could not have asked for better help from the electorate. A government without Left interference is a dream for any stock market in the world. Year-to-date (YTD), India has been the worst-performing market amongst BRIC (Brazil, Russia, India and China) markets. The markets are always ahead of the curve, and in the run-up to the election results, it has been proved yet again. We have had a good 19% YTD run in India, and an encouraging 30% bounce-back from March 9 lows. But have no doubt on the maturity of the Indian capital markets. All that is set to change. Already, despite recent uncertainties, the markets have been holding firm and there is fair amount of cash in the portfolios of all classes of investors.
Suddenly the new government will find its hands freed from Left compulsions and worrying about a resurgent BJP to fight the next state elections. India can now look forward to the new government for some practical, forward looking and tough economic decisions.
If the Left have been shown the door, the other big shift we have seen is the emergence of Gen-Next in Indian politics. The new Cabinet is likely to have younger and more modern leaders being inducted and both these factors should be immensely positive for India. The risk appetite in Indian markets was building up for the past couple of months as we could see large stakes changing hands in both mid caps as well as large caps. This was the biggest indication that India has bottomed out, but most investors saw the election outcome as the biggest risk. To simply put, far too many were waiting on the sidelines to allow this market to go down. Now, the liquidity - both domestic and foreign - waiting on the sidelines will have to come in.
The Indian citizen has given the biggest reason for a thumbs up to the Indian capital markets. The government will have to work too hard to throw away this opportunity. Is it a blue sky investment climate for India? No, it’s not, but there are few clouds of fiscal deficit that will need to clear out but we have elected a team which can take us to the next level of governance and prosperity. Let the risk appetite be added in your portfolio. It’s beginning of a new level of run.
