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well a very special guest India's most loved and most respected investor raak junjun Wala joins us on ETR Mr junjun Wala good morning thank you for joining us what do you make of the SM FM announcements do you think there is enough in the announcement which will fix the sentiment and the economy see there is no one thing which can revive sentiment and economy it has to be a series of things but surely it is an expression of you know that the government is concerned and is going to take all steps which are necessary in order to revive the economy do you think that itself is a very good feeling and I think the steps that they they have taken are good and they will help in Revival of the economy do you think there is just too much of pessimism on the street when I stay Street I'm just not just refering to market I'm refering to entrepreneurs I'm referring to Consumers everybody is just talking about slowdown but do you think the reality is far for different than what everybody is narrating see n it is very fashionable to do what is F in markets and what is fashionable Talk of the slow down and how sever it is but exib tells me that it's not very profitable right so I think the pism I don't know I've never seen that pism is a market uh when we spoke last you said that we must we must remember that the way India did business in last couple of decades versus how India will do business in next coming decades would change and the transition is coming at a cost when do you think the benefits of the transition will start you know reflecting in economy and also at you know various points well it's not that they are not reflecting right it's not that you know uh the benefits of benefits of uh GST are not reflecting but a series of measures have to be taken and they combined together will really I mean you know boost things do you think the government has done the right thing by not compromising on the fiscal because the easy thing would have been them to you know bust the fiscal and start spending but they've been very careful of not busting the fiscal see I wouldn't I mean if I were to decide I wouldn't mind you know compromising some part on the fiscal but with the poor tax Collections and the ambitious targets I think we will have to have some kind of Correction in the fiscal naturally itself CU I don't think tax collections are going to match what the government is estimated so therefore I feel there is not much space of fiscal lency but nevertheless I would I mean 25 30 basis points is not going to mean much and with inflation under control and the world under a trade War I would Advocate some leniency in the fiscal deficits leniency okay that's that's a that's a headline takeaway there Mr Jala when do you see sentiment turning around when you said you've you've never seen such negative sentiment sentiment turning around is not an event it's a process sure sure it will take time and see therefore I think the street today is negative in spite of what the government has announced maybe it's because of the international Fallen markets or you know a series of I mean if people don't get too excited then things will stabilize and I I feel it's too much for us to expect that the market will bounce back in a big way immediately markets are going to go circular they're going to take time but I think the bottoming out process will start but Mr janala don't you think uh that the measures will put a floor at least to this falling Market just last week we've had a rough patch and Friday then we rebounded from those lows of 10,750 thereabouts do you sense that a flow could be near at least I personally feel anything between 10,500 10,750 is a flow for the market okay and you don't think the previous lows would be tested again well they could be tested but I don't think they'll be very effectively broken you know last time when we spoke Mr junjun Wala you also mentioned that watch out midcap stocks were due for a sharpish correction in your mind do you think the price wise correction is over in mid and small cap stocks I don't know where correction over but I can see a lot of opport mid midcap stocks I person broadly a buyer of midcap stocks at this level will gain anom in time to come so you think that pessimism in the stock prices is overdone and fundamentals are not that bad can I get I mean I don't want to get this one wrong just for the benefit of no I missed your point sir I said pism is over done okay uh given that we are in a very low interest rate regime locally and globally what kind of scenario in coming years do you think we could be staring at I think low low interest scenario is here to stayes the inter worldwide are not going to reverse easily because there is no inflation on the horizon how big is the trade War how disruptive that could be for the world it could disrup for the world but I don't think it's disruptive for India so you are making a case that India will gain because of trade War because India is not a large player lose because see a lot of manufacturing shift and also exports are not such a very important part of the Indian until Americans start targeting services I don't think India I India positively affected so the biggest silver lining for India or Indian markets has been the Sip flows the prediction which you made on this forum in one of our interviews three years ago and the word you us that you know India May uh domestic flows tsunami and I think it is visible now do you think the Sip flows and domestic investment will only pick up I think I think I mean see ultimately savings have to go somewhere and I think they will find their home in in financial markets and within financial markets LGE part in equity rakes you talked about the word fashionable what's fashionable all also has been you know this entire liquidity crisis and I don't think it's about liquidity it's about Banks not willing to lend to corporates now with the PSU Bank Rec capitalization coming in all the steps being taken do you think lending can come back to the system because part of the Slowdown or the kickstar of the Slowdown was pretty much this ma'am lending will have to come back what will the banks do with the money but they were resisting sir they were resisting but I don't think they'll resist I mean ultimately they'll have to lend uh you know you've always been very bullish on the banking sector and you know in a recent interview you also talked about the fact that you feel that the peak of the NPA cycle has passed is it time to look away from corporate Banks and look at PSU Banks as well from an investment angle ma'am that you make your own choices I would like to comment on it Mr janala you know it in terms of opportunity and you said there is definitely opportunity in the broader markets I just want to get a sense from you on whether so you stud I don't want to make you know comments about any specific sector any stock okay uh Mr junjala I don't want to get this one wrong but I guess what people want to hear from you is that do you think if we look back and analyze the month of August 2019 2 years from now 3 years from now four years from now in hindsight that would turned out to be one of the biggest buying opportunity like it did in 2018 and 2009 I mean I won't say that decisively but I think there is buying there is buying opportunity in the market that that things will not get worse at all I can't say with 100% short maybe you buy something you may not be able to get it cheaper but broadly I think there is opportunity there is value and the pessimism according to you is excessively done is very high absolutely I okay Mr Juna appreciate your time thank you very much for commmentating this intervie interview so there you go you heard from the big man yeah the pessimism is overdone midium small cap stocks and you know by the way in August 2007 18 yeah 18 yeah 18 18 when we met uh he said look Market Bo multiple that is an indication that a bubble in the mid in the small cap stocks wasn't making and now his view is that the selling in mid and small cap stocks is overdone and the pessimism I guess it's a done sure yeah and he also said that there is a chance for the broader Market Revival he doesn't see the market go go down below the index that is beyond the 10,500 10,750 which pretty much we're close to around right now and U I think what he liked is what he said about lending will have to come back into the system and I think part of the solution is in that because we all know that it wasn't like there was a liquidity crisis but the fact that Banks were shying away from lending to corporates that he says after the corrective measures we'll get back into the system you know sentiment can change you know andha it could change you ask anybody frankly if I if you ask anybody in the month of Jan how are you feeling about the economy great because we on a Revival how are you feeling ahead of election nervous because we don't know what would happen how are you feeling on the election day great because I have visibility how are you feeling 60 days after that very nervous because oh my God this has gone wrong that has gone wrong that's what markets do you know it's in the short term it's Behavior it is sentiment it is noise it is a sum total of what we hear imagine all three of us we start talking about slowdown everybody will start feeling the Slowdown and then the market will always be you it go through a cycle sometimes fundamentals ahead of valuations and sometimes sentiment is much ahead of uh you know far ahead of valuations right now I think fundamentals are ahead of prices and valuation so I think prices will have to catch up to fundamental I would have reacted if he would have not heard something from the government you know if markets if if now markets know that now markets know that attitude is not going to be more like a big brother attitude who only wants to give advice and does not want to help I think that's that's my sumission as to what I make up the market and we're still expecting more announcements so so so let's see what more is to come from uh from NOS block as well
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