Samir Arora, Helios Capital Management - Weekend Reading

Samir Arora, Helios Capital Management - Weekend  Reading

Source: CNBC

See new bull mkt in 2014-15; RBI move disappointing 

I am deeply disappointed" by the RBI's stance of not cutting interest rates and I believe that the RBI ought to have aided sentiments by cutting repo rate.

Despite the pressure tactics of finance minister P Chidambaram over the last six weeks, the central bank has chosen to keep its eye on inflation even as it subtly asked the government to go beyond lip service in terms of fiscal reforms. 

Look at it form the finance ministerⳠpoint of view; a major part of that fiscal deficit reduction does involve the stock markets in it. It does involve the fact that foreigners will come in and buy IPOs or FPOs. By the way we are disappointed on a separate level with the government in some sense of saying that we will not sell Specified Undertaking of UTI (SUUTI) shares or that there is not proposal. But in some sense all these things are integrated with each other - to say you do it separately; if it is so literal, you donⴠneed a RBI, you just need a formula.

The stock market now is back in the finance ministerⳠcourt, but I donⴠthink as much on fiscal deficit, but they have to do these things which they havenⴠdone. For example, at least accept the Shome Committee and show that the tax thing is being handled. I though they should do the SUUTI shares first because not only are these shares easiest to sell, but they will also get lot of real foreign money and these wonⴠbe shares that you will have to dump on LICⳠhead.

Obviously the US election is a big deal. For India, after the sort of spate of announcements that came from the ministry on government in general on various things, suddenly we havenⴠhad any new things for about maybe two-three weeks. In between this rate policy yesterday was a big event which has been disappointing. From an India point of view, we have to wait.

The market will not fall because in any way you look at the government strategy, the fact that government came so far in terms of doing whatever it did and risking its tenure on the line, it would make no sense to stop suddenly. But because of new corruption issues that came up everybodyⳠeye was off the ball. They will have to continue with this strategy.

If the world was ceteris paribus ("all other things being equal") then I would say that India will have a very big return over the next two years, without knowing in which year it comes. Either Congress does a lot next year and therefore that sort of gives you 25 percent or something or there are more polls related to Gujarat that King Modi has so many seats and he is the best runner candidate for PM, if four more polls do it next year at the time when Congress is not doing something in terms of the economy, then people will build that.

I will enjoy the next bull market and that is my goal. I think I will enjoy in 2014 or 2015, one way or the other. You can create a story as to how it will happen, but there is one more bull market for me.