'Bottom formation complete, revival in next six months'

'Bottom formation complete, revival in next six months'
The Financial Express, April 17, 2009, Page 3

fe Bureau, Chennai

“The bottom formation is being completed. The fundamentals are in place and every risk factor has been factored into it. It is time for economy as well as markets to revive. Irrespective of whichever party/parties form the next government at the Centre, the growth prospects of the corporate India can be seen from October-December quarter onwards,” said Dinesh Thakkar, Angel Broking firm chairman and managing director.

It is expected that the indices will hover between 10,000 and 12,500 for the next few months. Anything under the book value of Rs 2 is ideal for an investor to make equity investment. If March and the last few days of April are of any indication, one would not rule out the flows from the FIIs in due course of time. “We see more and more FIIs are expected to take part in the markets growth momentum in a big way over a period of time,” he said.

“One cannot even rule out the bad times, at least not for another few months. There will be equally knee-jerking reactions from across all the sections. However, one has to look at the long-term perspective than the short-term crisis, which may last for another six to eight months,” he pointed out.

According to him, whichever political party/ parties form the next government, the reform policies will continue to be there. There may be slight changes but the reforms continue to happen. So the investors should not show any strong reaction to the new government at the Centre. “With its unique model, India is next major country after China to attract $14 trillion funds lying unutilised across the globe,” he said. In March alone, FIIs have pumped in Rs 5,000 crore followed by mutual funds with Rs 2,500 crore,” he said.

“We expect interest rates, both lending as well as deposit, will come down in a few months. RBI will continue to monitor the situation and ensure the credit offtake picks up while ensuring growth retail spending,” he said. This time the revival would be of a long one and will be more structured and robust one, he added.

Sectors such as infrastructure, IT, telecom are expected to see revival in the near future while commodities and capital goods will have to wait for some more time, he said. Having completed their capital expenditure, it is time for corporates to look forward for better P/E as well as increasing EPS, he said.