Page 116 - Volatility News Today

Nitin Raheja says: “There is a lot of visible froth that we see in the IPO markets presently. But there is just so much domestic liquidity today and that is prevailing and chasing. Also, if you see promoters selling, the way PE and VCs have been selling, point to froth in the market and one has to be careful.”

One of the much talked about interesting trends for the year is a significant reduction in the Foreign Institutional Investors (FIIs) holding in our markets. At present, of the total Indian market cap of US$~4.33trillion, FII holding is US$~656billion or ~15%. This will be one of the lowest FII holdings in our stock markets in the last 10 years plus. To put it in context, in 2012 the FII holding was ~25%.

Sanjiv Bhasin says: “In capital goods basket, we have a basket of ABB, L&T and Cummins. Siemens was our top pick sometime back but it has gone way beyond the price performance. There was uncertainty due to lack of clarity. I think they are trying to come to that. ”

With a little luck, the dividend portfolios tracked here will continue to generate good returns over the long term with reasonable to modest levels of volatility

Looking for ways to prepare for future uncertainties? A solution for some may be investing in precious metals, such as Gold and Silver, strategists at Morgan Stanley report.

“When the FIIs come back into India, see, they are coming from a super safe market like the US to an emerging country risk oriented market. They will always tend to buy the safety aspects of the market, that is number one. Number two, if you see the composition of FII flows, passive flows are dominating. So, passive flows tend to buy the index.”

“Take some profits off on companies where price to earnings multiples are beyond 50-60 times trailing 12 months could be private sector defence contractors. It could be some of the newly listed stocks as well which are engaged in different businesses trading at very rich multiples. You could even consider adding specialty chemicals to that list where trading multiples are quite rich.”

“Hospitals are a wonderful business. In fact, I do not think many people in the investing Street understand that barring FMCG, the only other sector that has negative working capital is hospitals. So the negative working capital indicates that when your profits grow by Rs 100, your cash flow grows by Rs 120 or Rs 110. And that is a fantastic business to be in as an investor. ”

Zoi Fletcher speaks to Stewart Webster, director of credit and risk at S&P Global Market Intelligence, about how his team is providing transparency in this

This seasonal rally is aiming for new all-time stock market records.