The Present Market Scenario-by Nilesh Shah
According to Nilesh Shah the market is in a very unstable scenario and the earnings are yet not recovered. There are many concerns about the global market, Fed hike uncertainty being one of those. The market is in a range bound scenario.
After the stage of consolidation that has been happening from the last 12-18 months, there is an increase in the earnings and the overall position of the market, Nilesh Shah claimed in one of his interviews with CNBC-TV18. If the same hike continues for the coming quarters as well, then only there will be a better situation and the market will start recovering.
The economy has been growing, hence the interest rates have been lowered and the government has been spending in infra spaces, he added. Moreover, after the 7th Pay commission the consumption related sectors will also enjoy a boon. The bill will also be quite beneficial for the organized sector, he said.
Here is a summarized conversation between Nilesh Shah, Latha Venkatesh and Sonia Shenoy during the interview on CNBC-TV18.
Latha: How do you see the market for the next three-six months?
Nilesh: We are still in the stage where the earnings are not yet recovered as expected and there may be rate hike in US also. Many such global concerns are keeping our market in a range bound state. But we hope that in the near future the situation will be more optimistic and the improvement can be seen after December 2014 quarter and it will be seen that on YOY basis the earnings will be recovered.
Moreover, our economy is climbing high and there has been a deduction in the interest rates and the government is spending more on infrastructure related sectors. All these will positively impact the economy, going forward. After the 7th Pay commission also many sectors related to urban consumption will see improvements. The market has seen a niche and not given much to the investors but in the coming 12-18 months things will settle back in place and there will be a rise in the earnings.
Sonia: Talking about the big cue, the goods and service tax revenue rate which is 15-15.15.5 percent will prove to be a positive game changer to curb the direction of the market?
Nilesh: There could be a reaction from the market initially. We just hope that GST bill looks to be more certain after the announcement of the assured rate. But still it is important to study to study GST in detail and figure the stocks and this will help us.
We believe that the organized sector had faced unfair competition from the unorganized sector and the same will benefit from the GST as the unorganized sectors will fall in the tax net. Hence, now the focus is to find out the details and pick the stocks where there can be growth on volume, which is constrained due to the unfair competition that they have been struggling with.