The Economic Times daily newspaper is available online now.

    We are almost back to 2018 level and one can find great picks: Vikas Khemani

    Synopsis

    The Carnelian Capital founder says there is a second and third order impact of coronavirus epidemic across the globe and across various asset classes and that can lead to a global slowdown.

    Vikas Khemani-1200ETMarkets.com
    The mid and the small cap indices are showing a whopping 6% gash, ditto for the front liners. What is unnerving is that at a time like this it seems that it is not just equities, some of the other assets classes too are being taken down. Is it the time to take a bet and plunge into the equity markets, pick up some of the lucrative largecap names or are you advising investors to remain a bit cautious as of now?
    This is the aftermath of the second or third order impact of coronavirus and fear is gripping the market right now. Today’s fall across the globe and across most asset classes is also further accentuating the sense of fear. Currently, markets do not know how long the coronavirus issue would last. But I believe that as far as Indian markets are concerned, we have given away a large part of our gains in the recent past. We are almost back to 2018 level and definitely it offers great opportunities in many sort of sectors and companies.

    Great companies are available at lower prices, largely driven by the sense of fear and panic in the market. I believe that this is a good time for picking. Having said that, one should not assume that the recovery would be immediate. It will take time but once the sense of fear and panic settles down, in India we should do well. It is just that the timing is still unknown and unclear and that is spooking everybody.

    Unlock Leadership Excellence with a Range of CXO Courses

    Offering CollegeCourseWebsite
    IIM LucknowIIML Chief Executive Officer ProgrammeVisit
    IIM LucknowIIML Chief Operations Officer ProgrammeVisit
    Indian School of BusinessISB Chief Technology OfficerVisit
    Are you worried about the ripple effect of this crash in crude oil prices? Could that in turn send some of the other commodities spiralling down or do you believe India’s import bill stands to benefit on the back of lower crude oil prices?
    No doubt, India stands to benefit from the lower crude oil price, but we need to keep in mind the second and third order effect of whenever such sharp fall happens in any asset class. It has repercussions in terms of its second or third order effect and it really depends on how long it lasts. If tomorrow, we were to get news from China that the coronavirus issue is settling down, activities are starting, we will see a sharp recovery in the market and in all the assets classes. It really depends on how quickly you get the news of normalcy. But having said that, if it continues like this, you will see commodities remaining under the watch list.

    If it sustains for long, then it can definitely have a ripple effect on the banking sector across the globe and not only on India. There will be second and third order impact across the globe and across various asset classes and that can lead to a global slowdown.

    It really depends on how long this situation lasts. Based on whatever little news flow we hear, this cannot be said for sure that things seem to be settling down and coming back in China. Except probably the epicentre of Wuhan, everywhere else, things seem to be returning to normal. But again, we will need to see wider news flow to see the comfort of markets coming back. So it is a critical situation but I would say if you just take the fear part out right now, lots of value opportunities have emerged. Stocks whose fundamentals continue to remain strong, let us say banking financial services, non- credit based assets, which have not had any kind of deterioration in the fundamentals and look good from long-term perspective. Many of these are available at a 30-40% cheaper price than what they were two weeks ago.

    Now value has not gone in that. Business models are still the same. Management teams are still the same. If somebody can keep the fear aside and say I can overlook what happens over the next one month, these will be great buys at this point in time. There are various pockets like this where one can look to invest.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in