India has always been a bottom-up market. Local fund managers have outperformed the benchmark in the past with a comfortable margin as stock picking opportunities were plentiful. Barring 2008, when only a handful of stocks ended in positive territory, every single year — including all the negative years — you will find a whole bunch of gainers. The sheer diversity in the listed space in India makes this dispersion in return possible. So, irrespective of the macro situation, whether GDP grows by 8% or 6%, inflation remains at 5% or zooms to 10%, interest rates comes down or stay right where they are, there will be stocks that will surge. That’s why we dedicate an entire edition at the end of the year to pick stocks that can fetch a superior return. This year, we have 13 stock picks for the year by analysts and portfolio managers.
Buckle up for 2016
India has always been a bottom-up market. Local fund managers have outperformed the benchmark in the past with a comfortable margin as stock picking opportunities were plentiful.
Shankar Sharma and Chaitanya Dalmia lead the issue with their individual perspectives on the market. While Sharma feels that this year will be the one where you simply put your head down and wait for the next year, Dalmia is unnerved by the increasing disconnect between asset prices and underlying financials.
As we look back at 2015, it seems like a rather uneventful year as far as the stock market goes. The local economy has done nothing remarkable and slowly everyone is coming to terms with the fact that Modi or no Modi, the economy will grow at its own pace. The government has very little room to spur growth, given its limited finances and the complex economy that India is.
Besides, today the fact is that larger concerns around global economic growth, sovereign solvency risks, the Chinese slowdown and geopolitical tension continue to simmer, but except for the Fed rate hike, no one seems to be overly concerned about these big risks. Essentially, global investors have settled down uncomfortably in a world with all these worries. But as we know, the knockout punch comes when no one is expecting it. While we keep that in mind at all times, it serves us well to remember that macro mishaps throw up good buying opportunities. Here’s wishing Outlook Business readers a profitable 2016.