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3 reasons why the rally in metal stocks may not end so soon


3 reasons why the rally in metal stocks may not end so soon
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Last Updated: May 25, 2021, 02:06 PM IST
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Synopsis
​​I think these corrections are healthy. We are still very positive as far as metals are concerned.
ETMarkets.com
As there is a strong demand for metals, the supply chain is not yet fully in place and there is an expectation of a super cycle, the party in metal stocks has just begun, argues Sridhar Sivaram, Investment Director, Enam Holdings, in this interview with ET Now. Edited excerpts:
Do you think that this momentum in the market is here to stay? Has the market already priced in all the negatives? ....

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value stocks: Emam's Sridhar Sivaram on how to avoid falling in value traps


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The best way to participate in the PSU reboot is to buy a PSU bucket. If I am a retail investor, I would buy a PSU mutual fund ., says
Enam Holdings.
In the near term, are there any key concerns that one should be monitoring? We have started to see a little bit of outflows on the back of global developments and some regional lockdowns have started once again.
Yes, near term, those are the real concerns. I was around Nagpur over the weekend and even 60-80 kms outside Nagpur, all restaurants were shut and all shopping malls were shut. This is pre-lockdown because yesterday the lockdown was supposed to start and obviously these are going to have economic impacts. So there is already some bit of impact in and around clusters where the virus cases have gone up. But that would be a short term impact. Also, one has to keep a watch on what is happening to the US bond yields and inflation. ....

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what to buy: We are betting on domestic cyclicals & china plus one story: Sridhar Sivaram


Across the board, a lot of internet companies are going public. Do you like that space?
Some of the valuations for the new IPOs look quite stretched, especially in some of the technology names. There are no comparable plays and they may end up competing with global majors. So I would wait on the sideline and see how they perform. I am not in a hurry to jump in just because it is a fad right now. There are so many opportunities. If you look at comparables of companies which had IPOs and companies in the similar sector which are trading in the market with 20 or 30-year history, there is a significant discount. Today IPOs are in vogue and usually there is a huge pop up post IPO. We are not in a hurry to just get into some of these just because of a short-term gain. We are staying away unless there is something worth investing. ....

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Risk-reward looks good for banks and financials: Shridhar Sivaram


Sivaram remains positive on financials and is of the view that the RBI s assessment of NPA increase is only a short-term worry. “I remain extremely optimistic about private banks and believe that the risk-reward is very good for banks & financials.” When it comes to the government’s privatisation drive, Sivaram believes that the government’s privatisation process will go through.
He is firmly of the view that there is a case to be made for value preference. “Without triggers to earnings, we don t play only on value,” he says. in terms of sectors, he is also focusing on domestic cyclical & china+1 themes and it sector. “Pharma firms with earnings visibility will grow sharply and I see opportunities for Indian pharma to utilise china +1 strategy,” says Sivaram. The competitive intensity in the telecom sector is still very strong and I remain positive on the prospects of the telecom sector,” he says. ....

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