저자: CNBC-TV18 · 외국인
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hello and welcome to this special Diwali program it's that time of the year it's festive it's bright it's all colors and of course it's a a period of anticipation as well anticipation for better things as compared to what has just gone by uh at the outside I want to wish all our viewers a very Happy Diwali from the entire cnbv 18 team we are coming to you live by the way you can see the decoration around From The mwal Towers here in the heart of Mumbai uh you know the next year somewhat 2018 is expected to be dominated by two things rates and politics power and politics as some have put it uh and who better to then put some of these questions to in terms of how this will impact your portfolios these big broad themes which will impact your portfolio uh to two real heavy weights how to pack a punch into your portfolio that's the question we're going to focus on and answer in various ways here over the next 20 30 minutes or so so let me welcome in our esteem panel ramal needs no introduction Ram G of course is Chairman of M Financial Services Manish Shani needs no introduction as well he's of course director at enam Holdings uh happy diali to both of you to your families to your teams the entire TV8 team and all the investors thank you very much uh let's just start there at the slightly top level 30,000 ft are these going to be the big talking points as we enter the new someo which is interest rates and the question whether interest rates globally have peaked and we are entering a cutting cycle now and politics because there are State elections and of course the big general elections next year I just want to start with that Ram yeah so interested cycle has picked out I think it's a too biger statement to say uh I mean yes there there looks to be some kind of a pause right now now but to say that it has been picked up I have no view on uh this interested cycle but one thing is for sure that uh what we have seen last 10 15 years of subzero or zero kind of a thing where 12 15 13 trillion of bonds particularly in Europe went below below zero so that era is over you know what started in ' 80s from 15 16% 10 year to zero I think that one phase in pendulum is done and now as uh Howard Mark say is you know pendulum moves all the way up so from zero we have come to 5 5 and a half% whatever happens I don't know but it is definitely not going to go back to zero immediately see the extreme the other end of the pendulum five it can swing more you don't know I that's what I'm saying when you said that we have picked out I don't know okay so what I'm saying is that for sure even 5% is not what the world is designed for you know world is designed for 1 or 2% types so I think uh it is a era of little more expensive money little tighter money and it will have its own reparation like what we are seeing the FIS are continuously selling because they are finding far more attractive opportunity in the Deb side out there I would think that high multiple companies will come down here also okay Manish uh two questions one is there's been no price to be paid so far we've not had a price to pay right I mean last cycle we had a big price to pay in 2008 because uh we had 450 basis points of tiing this cycle we had about that much 475 basis points from where we started to now I'm talking about the FED rates markets are okay I mean right I mean by and large so that is one second if as Rami also said we don't know if rates are at a peak and they start to come down will that unleash a gush of liquidity into uh equities into markets like India go on so let's separate the two out so first fundamentally what you're saying is right that the rate cycle is not yet peaked and in fact J demon is on record to say he expects it to go to 7% 7% uh the fact is this time the p pain has been taken by the central bank because they've subsidized all these fellows where the rate increases have not affected them because people have booked their mortgages and passed on the pain to the effectively the National Housing board in the US and the central banks actually are technically all bankrupt and while they are trying to tighten the fiscal side is as lose as ever so the US government is printing money like no tomorrow they have a interest burden now which is a trillion dollar a year which is 4 5% of GDP for a country whose collection is nine and this is the best economy in the world so how Japan has been bankrupt for the last 30 years and slowly decaying the same thing has happened to UK the same thing has happened to Europe it's happening to us so I call this the japanification of the developed world but they don't have the US dollar none of the other countries have the dollar you know it it we call it the pirate plank when you you know walk off the ship on the plank until that Minsky moment comes and then you suddenly Splash into the whatever you feel things are fine so I think that moment is going to come and there will be massive disruption in my mind in the currency markets which will be sparked by a bond market event in this year in our lifetimes in near term longterm I think it's closer than it ever was okay and the how do you call the canary in the coal mine to me is United Kingdom which has gotten out of brexit that currency has no business to be whatever 100 to the rupe and you see even when Tata goes with a $400 million investment the Prime Minister standing in attendance so it's telling you there's difficulty there the way the Japanese Yan has collapsed is telling you there's trouble coming the good news is you are the only large economy in the world by the way it doesn't have to come if rates have peaked and we start at some point rates start to go down right it doesn't have to happen so well that was one reason why people were selling banks in India as well because if you if you think rates are going up and I'm going to lose on bonds so they were selling financials globally and they just followed that trade over here uh and each time my friends from abroad say India is expensive I say let me show you a menu of my biggest sector is banking which is 30% of the index you can start with a 5p for canara Bank 6p for Bank of Baroda 7p for pnb 8p for SBI which is my largest bank 11p I can give you access bank and indent bank and my best banks are HDFC and ICI which are on less than 15 so if you think this Market is expensive and these guys are all compounding at 1820 % there's something wrong with you post the general election and assuming things are all steady that's what I'm get if we don't get 100 billion a year I would be very very surprised okay and I do think in this decade we will be the bubble Market okay of the world billion per year per no I said fi plus debt plus FDI cumulative inflow so your balance of payment problems and the rupe depreciation is gone okay you are the momentum Market going forward forward in this decade the way the world flipped on Japan with one trade of buffet because everyone's acting like leming there is a single trade single dimensional investing going on I think we are setting ourselves up for that okay it's still a way I mean let's get the May election out of the way and then we see quickly I want to get this election business out of the way is uh is continuity in the price r g i mean everybody is expecting mostly that there will be continuity right and is that a risk in your opinion and how much there's always 0 1% you know somebody said if Modi doesn't come then Market will fall by 25% okay Chris just just you know who said what I'm saying is that that probability is 1% what happens if he comes that is 99% so then Market goes up by 25% so you losing how much 24 and half% so the payoff metrics is more like 25% up rather than 25% off so you know there are lot of ways of the the mind is very difficult to figure out the probabilities of the events you know so the probability of the continuity going away is very low at least the way things look right now so I think but then event is event let the event be over on 7th December one event will be over and then I think the rally could start immediately after 7th December election depending on the outcome or irrespective irrespective irrespective I mean if it is very bad outcome then market May Cur a little bit and then the r will start you think we will have a rally into general elections yes because this is what happened in October 20 2014 okay I mean uh the moment in Goa uh Mr Modi was nominated as the you know prime minister candidate I think the market actually red before the election after that started in October 2014 to 13 oober 13 to 14 so that is a kind of a timeline we have this time okay I don't know what the market does but my sense is that depending on the result and uh the mood uh we could rally man do you agree locals are long the foreigners are short and that's how it's comprising the market so clearly the locals have voted that we we think there's a great outcome ahead of us and if there is something unexpected then obviously you think circumspect I I mean fi is are circum fi money is been still going out even last month we lost $2 billion there we are matched by local flows fi FDI still despite the do you think it's connected directly to to I look if if you don't get the same government or you get it in a different combination the market has to pause and reassess and repic so it's not like the world doesn't end the local macro story is is solid right because that is the bigger thing and then there are businesses you got to pick that remains to your mind solid irrespective of election Solider I would say by the day I mean as the tickle down happens post coid recovery started K recovery the big guys did very well I mean big houses are selling small houses are not selling big cars are selling motorcycles are not selling but I think I think this season we'll get to know in December numbers I think there is a uh there is a recovery at the bottom of the pyramid and government has again extended the free food for next 5 years so I think uh the the pain in the bottom of the Pam is real I was talking to few FMC companies they're saying the pain is real and volume recovery is very slow so clearly the real boom will come when the bottom of the pyramid starts the mass that last that uh the 60 70% of the population when they start feeling comfortable maybe the inflation is hurting them you know so somewhere there is something but starting to sense that is happening or yeah so somewhat it is better than uh what it was 6 months back but it's not still what what you seeing on the upper end you're not seeing on the lower end lower end Manish no I agree with him that that so-called k-shape recovery is is probably a reality and that's why the nervousness on elections that if they lose and then you start having what they called giveaways that's also the fear which has been impacting the banking sector for example that you know then your rate cycle inflation are all pushed out to that extent having said all that look elections and event which will get out of the way and the market will R post that once you digest so you may fall 10% 5% whatever if things don't work out but like he said if events are working out as expected it get you to a point where again it will look expensive correct from where it will get super expensive we have to take a break but before I take a break tell me three or four themes and when we'll take a break come back and we'll ask you we'll discuss those themes so the three themes Ram which you're very bullish on I think the decadal or multi- decadal trend is fossil to non- Fossil okay okay then you have the IC to EV okay then you have the super cycle of your real estate right financialization then financialization of the savings you know I think for us closer Home finalizer saving will have huge effect on the economy also got it so we'll discuss this Manish I I would you wake me up morning night I will say whether it's household sector keg sector infrastructure sector the intersection is all Financial I have to take a quick break so let's do that take a quick commercial break here we are back with you in just a bit with both Ram G and Manish joani in a bit
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