Latest news with #GeorgeThomas
Economic Times
2 days ago
- Business
- Economic Times
Mid and smallcaps expensive, selectivity crucial for investors: George Thomas
"Investors should be selective in their stock picks because broader market valuations are not cheap. Compared to the strong returns of the past three to five years, returns over the next couple of years might be lower, although still reasonably healthy," says George Thomas, Quantum AMC. ADVERTISEMENT If you look at the six-month trajectory, the market is still up by 6%. How do you see the market moving in the near term and the long term with respect to the Nifty and Sensex? More importantly, which sectors should investors consider if they want to allocate capital now? George Thomas: If you look at the recent market performance, it's driven by a few key factors. Firstly, the earnings profile of companies has been somewhat muted. For the March quarter, aggregate revenue growth was in single digits—around 6-7% for the BSE 500—while margins remained steady. In such an environment, valuations weren't supportive enough to generate high returns. However, looking ahead, we believe a few positive triggers are emerging. For one, the higher-than-expected rate cuts could eventually boost consumption and support some capex projects that may materialize in the coming quarters. The monsoon has also been reasonably good, which should benefit the rural economy. Irrigation activity and kharif sowing have shown healthy trends. With these factors, along with a relatively low base for FY25, we expect things to improve from here. That said, investors should be selective in their stock picks because broader market valuations are not cheap. Compared to the strong returns of the past three to five years, returns over the next couple of years might be lower, although still reasonably healthy. Let's elaborate further on the broader markets—specifically midcaps and smallcaps. It doesn't seem appropriate to talk about both market caps in the same breath anymore. Let's discuss them separately. There was a time when investors earned good profits from these segments. Valuations had cooled off a bit, but are we now looking at a time correction in certain pockets? And how are you positioned from a sector-specific valuation standpoint in midcaps and smallcaps? George Thomas: For mid- and small-cap investors, selectivity is crucial because there is froth in many areas. In our Quantum Smallcap Fund, for instance, we are holding about 13% in cash—which is higher than usual—reflecting our caution about valuations in that space. Some of our recent additions have been in the auto ancillary sector and a company catering to the FMCG space. However, investors need to adopt a bottom-up approach—you can't generalize. One must be mindful of valuations and evaluate each company's story individually. ADVERTISEMENT From a broader perspective, mid- and small-caps continue to be expensive compared to their historical averages. Not so much on a P/E basis, but if you look at price-to-book—an indicator of how profits compare to historical trends—there's clear evidence of froth. Hence, selectivity is companies we've added in the auto ancillary space are gaining new clients, including both domestic and foreign auto OEMs, and are increasing their components per vehicle. So, investors need to be very selective in this pocket. ADVERTISEMENT Let's shift focus to PSU banks. Indian Overseas Bank, for example, just reported a 75% rise in net profit to ₹1,111 crore, and the stock is up 2%. There's been a lot of action in PSU banks lately, especially with a 50-bps rate cut already in place and clarity emerging on the rate trajectory. How do you view this space going forward? George Thomas: We have been extremely selective in the PSU banking space. We currently hold just one PSU bank that has a large franchise and one of the lowest costs of funds. However, when you move further down the ladder, we believe that management and underwriting quality in many PSU banks do not match the best players in the sector. ADVERTISEMENT We are constructive on the banking sector overall. Even though there could be some near-term margin pressure due to rate cuts, we believe the market has largely factored this in. The asset quality concerns we saw in segments like personal loans, credit cards, and MFIs seem to be behind ahead, we expect asset quality to remain stable, and current valuations have already priced in some of the expected margin compression. Compared to their historical averages, some banking names—particularly in the private sector—continue to offer attractive upside. ADVERTISEMENT I'd like to bring your attention to the chemicals and fertiliser sector. With NITI Aayog recently releasing a roadmap to boost India's chemical industry, does this sector feature in your portfolio? What's your outlook considering the structural changes being proposed? George Thomas: We currently have no exposure to the chemical sector, primarily due to concerns around supply-side dependencies. Many of these companies are significantly influenced by how major Chinese suppliers behave, which adds it's hard to identify a sustainable moat in many specialty chemical companies. Their performance often hinges on regional dynamics, and given the scale of their operations, we don't see consistent structural advantages such as cost leadership. While there could be selective opportunities, from a broader sector perspective, we have not found an attractive combination of valuations and fundamental strength. Hence, we have stayed away from this space in our portfolio.
Time of India
2 days ago
- Business
- Time of India
Mid and smallcaps expensive, selectivity crucial for investors: George Thomas
"Investors should be selective in their stock picks because broader market valuations are not cheap. Compared to the strong returns of the past three to five years, returns over the next couple of years might be lower, although still reasonably healthy," says George Thomas, Quantum AMC. If you look at the six-month trajectory, the market is still up by 6%. How do you see the market moving in the near term and the long term with respect to the Nifty and Sensex? More importantly, which sectors should investors consider if they want to allocate capital now? George Thomas: If you look at the recent market performance, it's driven by a few key factors. Firstly, the earnings profile of companies has been somewhat muted. For the March quarter, aggregate revenue growth was in single digits—around 6-7% for the BSE 500—while margins remained steady. In such an environment, valuations weren't supportive enough to generate high returns. Explore courses from Top Institutes in Select a Course Category healthcare Data Science Public Policy Data Analytics PGDM Finance Cybersecurity Healthcare Data Science Leadership Management Degree Design Thinking MBA others MCA Others Operations Management Project Management Technology CXO Digital Marketing Product Management Artificial Intelligence Skills you'll gain: Duration: 11 Months IIM Lucknow CERT-IIML Healthcare Management India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Top 20 Most Expensive Cars Undo However, looking ahead, we believe a few positive triggers are emerging. For one, the higher-than-expected rate cuts could eventually boost consumption and support some capex projects that may materialize in the coming quarters. The monsoon has also been reasonably good, which should benefit the rural economy. Irrigation activity and kharif sowing have shown healthy trends. With these factors, along with a relatively low base for FY25, we expect things to improve from here. That said, investors should be selective in their stock picks because broader market valuations are not cheap. Compared to the strong returns of the past three to five years, returns over the next couple of years might be lower, although still reasonably healthy. Let's elaborate further on the broader markets—specifically midcaps and smallcaps. It doesn't seem appropriate to talk about both market caps in the same breath anymore. Let's discuss them separately. There was a time when investors earned good profits from these segments. Valuations had cooled off a bit, but are we now looking at a time correction in certain pockets? And how are you positioned from a sector-specific valuation standpoint in midcaps and smallcaps? George Thomas: For mid- and small-cap investors, selectivity is crucial because there is froth in many areas. In our Quantum Smallcap Fund, for instance, we are holding about 13% in cash—which is higher than usual—reflecting our caution about valuations in that space. Live Events Some of our recent additions have been in the auto ancillary sector and a company catering to the FMCG space. However, investors need to adopt a bottom-up approach—you can't generalize. One must be mindful of valuations and evaluate each company's story individually. From a broader perspective, mid- and small-caps continue to be expensive compared to their historical averages. Not so much on a P/E basis, but if you look at price-to-book—an indicator of how profits compare to historical trends—there's clear evidence of froth. Hence, selectivity is essential. The companies we've added in the auto ancillary space are gaining new clients, including both domestic and foreign auto OEMs, and are increasing their components per vehicle. So, investors need to be very selective in this pocket. Let's shift focus to PSU banks. Indian Overseas Bank , for example, just reported a 75% rise in net profit to ₹1,111 crore, and the stock is up 2%. There's been a lot of action in PSU banks lately, especially with a 50-bps rate cut already in place and clarity emerging on the rate trajectory. How do you view this space going forward? George Thomas: We have been extremely selective in the PSU banking space. We currently hold just one PSU bank that has a large franchise and one of the lowest costs of funds. However, when you move further down the ladder, we believe that management and underwriting quality in many PSU banks do not match the best players in the sector. We are constructive on the banking sector overall. Even though there could be some near-term margin pressure due to rate cuts, we believe the market has largely factored this in. The asset quality concerns we saw in segments like personal loans, credit cards, and MFIs seem to be behind us. Looking ahead, we expect asset quality to remain stable, and current valuations have already priced in some of the expected margin compression. Compared to their historical averages, some banking names—particularly in the private sector—continue to offer attractive upside. I'd like to bring your attention to the chemicals and fertiliser sector. With NITI Aayog recently releasing a roadmap to boost India's chemical industry, does this sector feature in your portfolio? What's your outlook considering the structural changes being proposed? George Thomas: We currently have no exposure to the chemical sector, primarily due to concerns around supply-side dependencies. Many of these companies are significantly influenced by how major Chinese suppliers behave, which adds unpredictability. Moreover, it's hard to identify a sustainable moat in many specialty chemical companies. Their performance often hinges on regional dynamics, and given the scale of their operations, we don't see consistent structural advantages such as cost leadership. While there could be selective opportunities, from a broader sector perspective, we have not found an attractive combination of valuations and fundamental strength. Hence, we have stayed away from this space in our portfolio.
Wall Street Journal
08-06-2025
- General
- Wall Street Journal
Skip DEI and Deploy ‘Y'all'
Ben Butler worries about the use of 'guys' to include women and suggests that waiters who use it undergo DEI training (Letters, June 3). Nonsense. They simply need to embrace the southern way and use 'y'all.' It's simple, charming and includes men, women and other primates. George Thomas
The Guardian
06-06-2025
- Politics
- The Guardian
The most pointless role in UK politics? The secretary of state for Wales
In the space of one week, Labour-run Wales has been short-changed by Labour-run Westminster on projects from rail funding to national insurance contributions. The poorest nation in the UK is being let down. Repeatedly. But what is to be done? What we need is a hero. Someone whose job is to speak up for Wales in cabinet, to be Cymru's voice in Westminster's corridors of power. Luckily for Wales, there is such a person – the secretary of state for Wales. Unluckily for Wales, this role has long been utterly obsolete. Rather than being the voice of Wales in cabinet, it far more often represents the voice of the cabinet in Wales. It needs to go. Wales didn't have its own secretary of state until 1964. The Scots, meanwhile, were given that voice more than 250 years before in 1707, though it was subsequently abolished three decades later and then recreated in 1926. When Wales did finally get one, it was a real cause for celebration and the culmination of much campaigning. The first two people in the post were Jim Griffiths and Cledwyn Hughes, who were highly respected and had great credentials within the Labour movement. The new role paid dividends and within the space of three years the Welsh Language Act was passed, giving Welsh legal status in Wales (amazing what happens when you give people a voice). But in the following decades there were some absolute stinkers in the job. The next one was George Thomas, who was anti Welsh language and described the setting up of the Welsh Office as the 'greatest mistake'. The low point of his tenure came after the Aberfan disaster, in which a coal tip collapsed on to a school killing 116 children and 28 adults. Subsequent inquiries found that the National Coal Board was squarely responsible for these deaths after refusing to pay for the removal of the tips. After the disaster, 88,000 individual contributions were received for the victim fund but the Labour UK government decided to take money from that fund and use it to clear the remaining tips. Thomas put pressure on the fund to give in. Over the subsequent decades, many of the people holding the role were not even Welsh or in a Welsh constituency. (Imagine if they had tried to do that to the Scots.) The worst of these was the Conservative John Redwood, who was born in Kent and was MP for Wokingham in Berkshire. (If you want a treat, dig out the video of him failing to mime the Welsh national anthem.) Redwood refused to sign documents that were written in Welsh, and didn't like to stay overnight in Wales, instead driving back to his constituency in England. But perhaps most damning was that, in a country with significant levels of poverty, he took great pride in returning £100m of the Welsh Office's budget to the Treasury unspent. What an effective voice for Wales in cabinet. More recently, Wales has been blessed with some equally diligent secretaries of state. One was Alun Cairns, who resigned from the post after it emerged that one of his staff was accused by a judge of deliberately sabotaging a rape trial. His best-known contribution was a supreme act of brown nosing when he got the Severn Bridge renamed the 'Prince of Wales Bridge' – a decision that only 17% of people in Wales supported. Another was Simon Hart, who admits in his just-published diaries that, at the official opening of the new Welsh parliament in 2020: 'I skip the Senedd bit – partly in protest, and partly to have lunch with Adam.' He doesn't say what he was protesting about. Another recent office holder was Robert Buckland who was, err, the MP for South Swindon … While Wales has had some shocking secretaries of state, this isn't why the role should be ditched. It needs to be gone because, however principled, competent and driven the holder of the office, there is no way they can realistically do the job of being Wales's voice. They have no power, barely any staff, are appointed by the prime minister and bound by collective responsibility. The current situation represents the worst of both worlds: it gives the illusion of Wales having a voice when it comes with a pre-installed mute button. The current holder of the office is Jo Stevens. Speaking to people in other departments as well as the Wales Office, I get the impression that she is at least proactive in making Wales's needs part of the conversation. I am told she has been focused in trying to get the historic injustices on rail funding remedied ahead of next week's spending review. Whether it works remains to be seen – and she sadly failed this week to prevent the new rail project between Oxford and Cambridge being classed as an 'England and Wales' scheme, meaning that Wales will not receive Barnett consequentials from it. But at least she isn't openly contemptuous of Welsh democracy like many of her predecessors. The fact remains, however, that whether or not Welsh issues are raised in Whitehall is totally dependent on the whims of a cabinet member who is appointed and often living outside Wales. That's a terrible status quo. Wales should appoint its advocates, not the prime minister, who has only once in the history of the UK been Welsh. The role of secretary of state for Wales needs to be replaced by a representative of the Welsh government, which is directly elected by the people of Wales. Better still, we need to properly reform the UK so the UK government doesn't double as the English government. Devolution gave Wales and Scotland a voice, and that voice should reverberate around the cabinet table. It is long past the time that Whitehall needs to acknowledge that the UK is made up of distinct countries. Giving these nations a real voice doesn't weaken the union, it strengthens it. Will Hayward is a Guardian columnist. He publishes a regular newsletter on Welsh politics and is the author of Independent Nation: Should Wales Leave the UK?
Kiwiblog
29-05-2025
- Politics
- Kiwiblog
Prebble on Labour and TPM
Richard Prebble writes: Claims standards of parliamentary behaviour have fallen are nonsense. Except for Te Pāti Māori, this is a well-behaved House. The Speaker's referral of the floor protest to the Privileges Committee was not discretionary. It was required by Standing Orders. The Speaker was lenient. He could have ordered the Sergeant-at-Arms to end the Māori Party haka. Any MP who resisted is automatically suspended for the rest of this Parliament. No Parliament can tolerate its proceedings being disrupted by protest. In 1981, British Speaker George Thomas suspended Labour MP Ron Brown for 20 days for nothing more than placing a protest flag on the Commons table. In 2023, the Tennessee House of Representatives expelled two Democratic lawmakers for leading a protest on the House floor. Yes, there have been incidents of disorder in the House before, but all admitted their actions were wrong. No MP has ever refused a summons to the Privileges Committee. This is spot on. There is no general problem. Just a problem with one party. And indeed a three week suspension is lenient for the nature of what they did. Across Europe, there are MMP parliaments with extremist parties that reject parliamentary norms. Europeans know it is a mistake to appease democracy's enemies. The democratic parties establish a 'cordon sanitaire'. They refuse to form coalitions or alliances with parties that oppose democracy. Here's what is also unprecedented: the New Zealand Labour Party, long a champion of parliamentary democracy, has not set a cordon sanitaire and ruled out working with Te Pāti Māori. Labour leader Chris Hipkins told Parliament that Labour wants no penalty on the MP who instigated the protest and just 24 hours for the party leaders – no real sanction in my view. Parliamentary democracy is not safe with Labour. TPM are proudly an anti-democracy party. They do not believe in one person, one vote. They want one person, six votes.
