Latest news with #SunilSubramaniam
Economic Times
5 days ago
- Business
- Economic Times
Growth data strong, RBI likely to maintain accommodative stance: Sunil Subramaniam
The big trigger that the market is waiting for is the satisfactory conclusion of the bilateral trade agreement between the US and July 9th is when the 90-day pause gets over. "The trigger which will drive the market on the contrary is something international related, that is, India specific international related. I am talking about the BTA. The big trigger that the market is waiting for is the satisfactory conclusion of the bilateral trade agreement between the US and July 9th is when the 90-day pause gets over," says Sunil Subramaniam, Market Expert. I guess the next big trigger is going to be the RBI MPC meet and all chatter is getting louder that it is going to be a 25 bps cut this time around. What do you think is going to please the markets? Sunil Subramaniam: Well, what will please the market is obviously not just 25, but 50. But I am in the minority here where I think RBI may skip a rate cut and I think that they will focus on continuing the accommodative stance. They will focus on transmission. They will make sure that any bottlenecks in for transmission. The last two rate cuts have not been fully passed on yet. So, RBI's focus will be more in terms of ensuring transmission because the growth numbers have come in very well. Other than the GDP numbers, you have the PMI numbers also indicating a very, 62 if I remember the flash PMI overall composite that I saw. So, my own sense is that maybe, like I said, I am in the minority, maybe RBI may skip a rate cut but give a very good guidance in terms of continuing the accommodative stance and perhaps doing some more steps to ensure the liquidity remains strong. So, does that mean now when you go ahead in the markets, do you think that now the entire trend has become more domestic oriented news flow because you have seen the markets actually do absolutely nothing. Over the last almost six months, the only move or only trigger that has been for the markets have been the commentary coming in from global stalwarts. So, what is your take, now you think in the next six months the market will actually focus inwards, look at domestic growth triggers or domestic indicators to actually move upwards and I am talking about next six months as in for the calendar year? Sunil Subramaniam: So, actually speaking, the positive domestic triggers have already been at play in terms of the fact that the DIIs, especially the domestic mutual funds, this month have stepped up the buying. Otherwise, the international uncertainty that you mentioned would have led to a far significant correction in the Indian markets, that has not happened because domestic mutual funds who had built up their cash balances till April, I remember something like 2.5 lakh crores, have started deploying the extra cash in this month and have protected the market. So, the domestic factors coming into play are already there in terms of the DMFs coming through. But to your point that over the next six months do you think it is these domestics? I think the good news is already in the price. The trigger which will drive the market on the contrary is something international related, that is, India specific international related. I am talking about the BTA. The big trigger that the market is waiting for is the satisfactory conclusion of the bilateral trade agreement between the US and July 9th is when the 90-day pause gets over. So, if that comes through, the uncertainty that is prevailing around India from an FII perspective I feel will go away a lot and you should see the next leg up of the rally happening with the BTA more and yes, naturally we can say that the BTA is going to open up domestic sectors for export oriented, the story is domestic, of course, but the cue for FIIs and that is what has got to take the market up because domestic fund managers have now begun deploying their cash balances, so the continuance of the SIP book and everything will continue to give them buying support, but a leg up for the market will come from the return of the FII, which I see as post BTA news flowing out, that is the big trigger.
Time of India
5 days ago
- Business
- Time of India
Growth data strong, RBI likely to maintain accommodative stance: Sunil Subramaniam
"The trigger which will drive the market on the contrary is something international related, that is, India specific international related. I am talking about the BTA. The big trigger that the market is waiting for is the satisfactory conclusion of the bilateral trade agreement between the US and July 9th is when the 90-day pause gets over," says Sunil Subramaniam , Market Expert . I guess the next big trigger is going to be the RBI MPC meet and all chatter is getting louder that it is going to be a 25 bps cut this time around. What do you think is going to please the markets? Sunil Subramaniam: Well, what will please the market is obviously not just 25, but 50. But I am in the minority here where I think RBI may skip a rate cut and I think that they will focus on continuing the accommodative stance. They will focus on transmission. They will make sure that any bottlenecks in for transmission. The last two rate cuts have not been fully passed on yet. So, RBI's focus will be more in terms of ensuring transmission because the growth numbers have come in very well. Other than the GDP numbers, you have the PMI numbers also indicating a very, 62 if I remember the flash PMI overall composite that I saw. So, my own sense is that maybe, like I said, I am in the minority, maybe RBI may skip a rate cut but give a very good guidance in terms of continuing the accommodative stance and perhaps doing some more steps to ensure the liquidity remains strong. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Homeowners can claim a free boiler upgrade if they live in these postcodes Eco Green Tips Apply Now Undo So, does that mean now when you go ahead in the markets, do you think that now the entire trend has become more domestic oriented news flow because you have seen the markets actually do absolutely nothing. Over the last almost six months, the only move or only trigger that has been for the markets have been the commentary coming in from global stalwarts. So, what is your take, now you think in the next six months the market will actually focus inwards, look at domestic growth triggers or domestic indicators to actually move upwards and I am talking about next six months as in for the calendar year? Sunil Subramaniam: So, actually speaking, the positive domestic triggers have already been at play in terms of the fact that the DIIs, especially the domestic mutual funds, this month have stepped up the buying. Otherwise, the international uncertainty that you mentioned would have led to a far significant correction in the Indian markets, that has not happened because domestic mutual funds who had built up their cash balances till April, I remember something like 2.5 lakh crores, have started deploying the extra cash in this month and have protected the market. So, the domestic factors coming into play are already there in terms of the DMFs coming through. But to your point that over the next six months do you think it is these domestics? I think the good news is already in the price. The trigger which will drive the market on the contrary is something international related, that is, India specific international related. I am talking about the BTA. The big trigger that the market is waiting for is the satisfactory conclusion of the bilateral trade agreement between the US and July 9th is when the 90-day pause gets over. Live Events So, if that comes through, the uncertainty that is prevailing around India from an FII perspective I feel will go away a lot and you should see the next leg up of the rally happening with the BTA more and yes, naturally we can say that the BTA is going to open up domestic sectors for export oriented, the story is domestic, of course, but the cue for FIIs and that is what has got to take the market up because domestic fund managers have now begun deploying their cash balances, so the continuance of the SIP book and everything will continue to give them buying support, but a leg up for the market will come from the return of the FII, which I see as post BTA news flowing out, that is the big trigger.
Economic Times
13-05-2025
- Business
- Economic Times
Geo-political easing, global truce to trigger market optimism: Sunil Subramaniam
So, I do not see that we will be actually necessarily suffering because of this and to that extent our inflows are always much less than the Chinese inflows, their market size, their GDP size is much-much larger than ours, so China will get its due share so that is not an issue at all, but India will not lose out is my view. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "A culmination of the two things meant that this remaining uncertainty and it is not just the Indo-Pak ceasefire , it is also the US-China talks in terms of putting a pause on the tariffs for 90 days to a limited extent and also the Russia and Ukraine are now willing to talk to each other," says Sunil Subramaniam So, I see this as a culmination of two things. One is there is a buildup of good news for India over last two to three months starting with oil price reductions, the budgetary giveaway to the middle class, the easing inflation, the 12% rise in the YoY GST collection, the good monsoon, all of these good factors which came out could not be fully FIIs caught on to it and were buying into India, by and large for the last 15-20 days, but DIIs were hesitant because the earning season was on and they were not confident because obviously the Indo-Pak situation was also a concern to the DIIs, but even overall international situation was a concern, earning season was a concern, so DIIs money was a little bit on the sidelines about two, two-and-a-half lakh crores just with the mutual funds was in the cash balance, on top of it there would have been insurance and Aifs and PMSes and all of a culmination of the two things meant that this remaining uncertainty and it is not just the Indo-Pak ceasefire, it is also the US-China talks in terms of putting a pause on the tariffs for 90 days to a limited extent and also the Russia and Ukraine are now willing to talk to each other. So, suddenly, you see this whole black cloud, the dark clouds of uncertainty have got lifted, so which means now it has kind of opens the dam for A) more FIIs flows to come in because probably the ones who are tactically looking at India saying an oil price reduction, a dollar weakening means it is positive for India and were coming, but now we will see that the growth engines will get unleashed from an FII the case with domestic mutual funds. While the earning season was not the best and the greatest and the guidance was also not the best and the greatest, what has now come in because of this lift of uncertainty is the fact that the guidances which were generally not so great will now prove to be outperformed and then actual earnings will you are in a situation where companies are now probably under promising but will overdeliver, so where this whole thing then comes to is that I see that with today's move decisive change has happened in the market, that growth now replaces valuations as a reason to now invest in India because so far what happened was despite the corrections that we suffered since September we continued to be at a premium over our me explain, India has always been at a premium to emerging markets, the long-term average is 62%, but even after the correction, the premium still was 75% before last week. So, the extra 13% premium was a little bit of hindrance saying India is trading above its long-term valuation today that is no longer a concern because like I said the market will now take its efforts away from looking at valuations and purely looking at the growth prospects for India and the situation is very similar to a year ago last April because from last April also the markets were expensive but from April to September they were on a bad bull run because markets ignored valuations and looked at the growth prospects that got punctured to some extent in September and the FII selling started, but that April to September move most probably will get now replicated from now for the next three to four, five or six months, so that is the change in the marketplace which in the previous time this happened post September was when China announced the stimulus if you was this shift to China and that caused the start of the correction. The question you are asking is it going to be similar now? Yes, there will be a shift to China because Chinese markets are very undervalued relative to India and those prospects are looking good. But this time it is not at the cost of India.I would say it will be at the cost of the other markets. Both India and China, China will get a valuation allocation, India will get a growth allocation. So, I do not see that we will be actually necessarily suffering because of this and to that extent our inflows are always much less than the Chinese inflows, their market size, their GDP size is much-much larger than ours, so China will get its due share so that is not an issue at all, but India will not lose out is my view.
Time of India
13-05-2025
- Business
- Time of India
Geo-political easing, global truce to trigger market optimism: Sunil Subramaniam
"A culmination of the two things meant that this remaining uncertainty and it is not just the Indo-Pak ceasefire , it is also the US-China talks in terms of putting a pause on the tariffs for 90 days to a limited extent and also the Russia and Ukraine are now willing to talk to each other," says Sunil Subramaniam , Market Expert . I just wanted to have your thoughts on the market movement. At least for today, what a cheer it has been, what a respite, and what a beautiful move in the benchmark indices and even the broader markets. What do you make of this move? Sunil Subramaniam: So, I see this as a culmination of two things. One is there is a buildup of good news for India over last two to three months starting with oil price reductions, the budgetary giveaway to the middle class, the easing inflation, the 12% rise in the YoY GST collection, the good monsoon, all of these good factors which came out could not be fully implemented. Now FIIs caught on to it and were buying into India, by and large for the last 15-20 days, but DIIs were hesitant because the earning season was on and they were not confident because obviously the Indo-Pak situation was also a concern to the DIIs, but even overall international situation was a concern, earning season was a concern, so DIIs money was a little bit on the sidelines about two, two-and-a-half lakh crores just with the mutual funds was in the cash balance, on top of it there would have been insurance and Aifs and PMSes and all of that. So, a culmination of the two things meant that this remaining uncertainty and it is not just the Indo-Pak ceasefire, it is also the US-China talks in terms of putting a pause on the tariffs for 90 days to a limited extent and also the Russia and Ukraine are now willing to talk to each other. So, suddenly, you see this whole black cloud, the dark clouds of uncertainty have got lifted, so which means now it has kind of opens the dam for A) more FIIs flows to come in because probably the ones who are tactically looking at India saying an oil price reduction, a dollar weakening means it is positive for India and were coming, but now we will see that the growth engines will get unleashed from an FII perspective. Live Events Same the case with domestic mutual funds. While the earning season was not the best and the greatest and the guidance was also not the best and the greatest, what has now come in because of this lift of uncertainty is the fact that the guidances which were generally not so great will now prove to be outperformed and then actual earnings will beat. So you are in a situation where companies are now probably under promising but will overdeliver, so where this whole thing then comes to is that I see that with today's move decisive change has happened in the market, that growth now replaces valuations as a reason to now invest in India because so far what happened was despite the corrections that we suffered since September we continued to be at a premium over our premium. Let me explain, India has always been at a premium to emerging markets, the long-term average is 62%, but even after the correction, the premium still was 75% before last week. So, the extra 13% premium was a little bit of hindrance saying India is trading above its long-term valuation average. Now, today that is no longer a concern because like I said the market will now take its efforts away from looking at valuations and purely looking at the growth prospects for India and the situation is very similar to a year ago last April because from last April also the markets were expensive but from April to September they were on a bad bull run because markets ignored valuations and looked at the growth prospects that got punctured to some extent in September and the FII selling started, but that April to September move most probably will get now replicated from now for the next three to four, five or six months, so that is the change in the marketplace which happened. A significant cut down in the US and China tariffs because both the countries have now decided to slash the tariff rates and within the emerging basket and within the Asian markets, yes, India has been one of those sweet spots. But with respect to this tariff cut announcement, do you believe that now there is a risk then wherein money will once again start flowing into the Chinese market? What is your thoughts? Sunil Subramaniam: So, in the previous time this happened post September was when China announced the stimulus if you recollect. There was this shift to China and that caused the start of the correction. The question you are asking is it going to be similar now? Yes, there will be a shift to China because Chinese markets are very undervalued relative to India and those prospects are looking good. But this time it is not at the cost of India. I would say it will be at the cost of the other markets. Both India and China, China will get a valuation allocation, India will get a growth allocation. So, I do not see that we will be actually necessarily suffering because of this and to that extent our inflows are always much less than the Chinese inflows, their market size, their GDP size is much-much larger than ours, so China will get its due share so that is not an issue at all, but India will not lose out is my view.
Mint
06-05-2025
- Business
- Mint
Should you diversify your portfolio by adding mutual funds focused on quality strategy?
Several mutual funds have filed with the Securities and Exchange Board of India for quality strategy funds. Quality strategy involves investing in companies that have strong fundamentals and robust balance sheets. It prioritises stocks with high profitability, high return on equity and low levels of debt. Should those looking at diversifying their portfolios with a different investment style consider the quality theme now? With the markets going through a phase of uncertainty, past performance suggests that the quality theme tends to do well during such times. In 2013, when the US Federal Reserve started to unwind the huge liquid ity surplus it had maintained to stimulate the economy, the benchmark Nifty 50 Index gained 6%, while the Nifty 200 Quality 30 Index advanced 17%. It outperformed other strategies — with the Nifty 200 Value 30 Index losing 15%, the Nifty 200 Alpha 30 Index adding 14% and the Nifty 200 Momentum 30 Index rising 10%. Value strategy focuses on stocks trading at cheaper valuations than their earnings and intrinsic value. The alpha strategy calls for investing in stocks that have widely outperformed market benchmarks in recent periods, and the momentum strategy looks for stocks with recent price up-moves. In 2018, when the markets faced pressure from the impact of the IL&FS crisis, the Nifty 50 Index was up 4%, while most other strategies yielded negative returns. However, the Nifty 200 Quality 30 Index delivered 7% returns. "In today's environment of economic uncertainty and moderating growth, businesses with sound financials and sustainable profitability stand out," said S Naren, executive director and chief investment officer of ICICI Mutual Fund, which recently launched the ICICI Prudential Quality Fund. 'A quality strategy-oriented fund aims to tap into this potential by selecting high quality companies available at reasonable valuations, thereby aiming to build a resilient portfolio designed to perform across market cycles. With attractive valuations in the quality segment, we believe this is an opportune time for investors to adopt a quality-focused strategy." While most funds in this segment are passively managed – tracking the performance of the quality index – ICICI MF's quality fund is an actively managed fund. Experts expect quality as a theme to do well going ahead, as it has underperformed other strategies from FY21 to FY24. "The volatility induced in the market over the last few months (GDP slowdown, tariffonomics, Indo-Pak situation) has poked the bubble of a pure liquidity and deep value driven rally in stocks and sectors," said Sunil Subramaniam, a market expert and former mutual fund CEO. 'So now companies with sound financials, deep moats and entry barriers, high corporate governance and relative stability and predictability of earnings are the ones which will withstand the test of facing up to the uncertain local and global environment over the next few months. In effect, it's the time for 'quality' to dominate allocations by both foreign institutional investors and domestic institutional investors." Strategy-based investing can be considered more of a tactical allocation than part of one's long-term core portfolio. Investors can complement the quality strategy with other strategies. 'By itself, quality may not always work but combining it with momentum can give a better investor experience," pointed out Kavitha Menon, founder of Probitus Wealth. Quality can also be combined with value because when value does well, quality underperforms and vice-versa. However, investors who are at the beginning of their investment journey should stick to regular diversified equity funds to build up their core investment portfolio before looking at tactical investment calls.
