Tag: Quantum Securities

Why Quantum’s Dutt likes insurance better than pharma

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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While there is long-term opportunity in pharmaceutical sector, most stocks have got expensive in the short-term, Sanjay Dutt of Quantum Securities said in an interview to CNBC-TV18.

“One needs to wait to let some froth settle down (in pharma). Insurance sector is a big opportunity and I would allocate money there,” Dutt said.

According to Dutt, banking and NBFC stocks have not been hurt by the COVID pandemic, as badly as the market was fearing.

Investors right now are shuffling their money between index stocks, and there is not much activity in second line stocks. Dutt feels this is the time to be looking for opportunities in the midcap space.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market sell-off continues: Here’s what market veterans have to say

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The mayhem across global markets continue. In such a scenario what should be the right strategy to approach markets is the big question.

Gautam Shah, founder & chief strategist at Goldilocks Premium Research, Andrew Holland, CEO of Avendus Capital Alternate Strategies, Sunil Singhania, founder of Abbakkus Asset Management, S Naren, ED & CIO-Equity at ICICI Prudential AMC and Sanjay Dutt, director of Quantum Securities spoke at length about the way forward in an interview with CNBC-TV18.

Shah said, “This is a first, historic, unprecedented down move; 2008 was a financial crisis and 2020 is an existential crisis and that’s the reason the market is trying to discount the worst very quickly.”

“It almost seems as if the market knows a lot more than we all do because the kind of weakness that we have seen and the manner in which some support levels have been broken in the last one week, it’s quite baffling,” he added.

In such a scenario, Holland said staying on the sideline is a safe bet given that its news flows that’s pushing market and fear. He further said that companies will have a cash flow and payment problem due to COVID-19 disruption.

Die hard optimists like me are finding it difficult to invest until stability returns, said Singhania. “These are unprecedented times and even in my 25-30 years of being the market, we have not seen the kind of market which we have seen now. Right now the question is to keep your family and yourself safe and then try to bottomfish,” he added.

“We are also in that camp where we do not want to put too much of money to work because there is not much left. At the same time, keep on evaluating the stock, keep on talking to companies, keep on looking at the environment. We are looking at India but the world is also falling as rapidly and from a global investors’ perspective, they have a choice which is outside of India too. So we have to take everything into consideration before we say it’s the bottom,” added Singhania.

According to Naren, “Whether markets go lower or not, every investment guru says you have to buy in panic and we have panic and how does it matter whether the market goes down another 1-2 percent or it goes up another 5 percent.”

“I think we are in panic, valuations are comfortable and if you have got comfortable panic and valuations then why do you have to worry what happens to the market in the next one or two days,” said Naren

“From a macro point of view there is a lot of scope for India, to do a lot of things at this point of time. There is clear requirement for bringing down risk-free rates temporary by making very big rate cuts, oil is at USD 25 per bbl, we have a situation where everywhere else in the world rates have been brought down very significantly and overnight. The fact is that India is sitting on USD 480 billion because of brilliant action by the RBI and the government,” added Naren.

According to him, India has enough foreign reserves to make use of right now and the entire macro environment is extremely favoruable for India.

Dutt said that today it’s not about equity markets; today, it’s about the forex markets, CP bond markets, there is complete dislocation there. “This is not the time to redeem mutual funds etc., in fact this is the time to allocate some more to SIP if you have some spare cash, but it’s important to continue SIP even if you don’t want to allocate more,” he added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amidst fear and sell-off, one can look at these opportunities to invest in, says Sanjay Dutt of Quantum Securities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Matthews of Bank Julius Baer & Co when asked if investors should be prepared for two quarters of gross domestic product (GDP) cuts and earnings cut, said, “That depends on the progression of the virus and the response of government and central banks but at least Q1 is a wipe out and that was largely expected anyways.”

“Chinese markets are the best performing markets in Asia this year notwithstanding this morning’s sell off – it is showing you that Chinese, where this thing started, they are already seeing through,” he added.

Speaking about Indian market, Matthews said, “There is no reason why India is any less immune to coronavirus than anyone else. It would be bad for a country like India. If you have adequate healthcare, serious cases can recover but if you don’t, unfortunately they will probably die. So that is why I would be concerned for India because obviously across the country, there are a lot of people who don’t have access to the kind of healthcare that you would need to treat a serious coronavirus case.”

Talking about investing opportunities Sanjay Dutt, director of Quantum Securities said, “A lot of India-centric plays – companies depending on Indian demand and supply situation, there will be an opportunity to buy in there if you haven’t bought earlier. Lot of local infrastructure plays because irrespective of how this whole thing pans out, the aggressive government spend on infrastructure etc is not going to stop.”

“Similarly, some of the consumption plays, which were expensive earlier, you are getting them cheaper. So, start gradually building positions,” Dutt said.

On coronavirus issue, Dutt said, “My broader point is that it is something that none of us can game as to where exactly what is going to happen but I can say that companies like Larsen and Toubro (L&T), Asian Paints, Dabur India, Reliance Industries Ltd (RIL) are not going to shut down. So if you have got spare cash, you can start deploying it but deploy it  gradually and not in one go. Keep watching because this virus is something which is going to have an impact for a quarter or two.”

According to Dutt, “All the governments worldwide are cognisant of correcting this, no amount of monetary or fiscal stimulus will solve this problem. The only way this problem can be solved is to prevent it and to cure it and all the governments are now concerned about it and are at it. So it is a matter of few days that stock prices, markets will be pricing it in.”

“I think no amount of stimulus or fiscal or monetary is going to do much at this point of time till the panic and fear settles down in the financial market,” Dutt added.

In terms of sectoral analysis, Matthews said, “Consumption space would be the most obvious place where there is vulnerability and then there is healthcare because India is a big producer of generics and generally, drugs will become more interesting around the world as a result of virus.”

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Expect 2020 to be a better year for equities; cyclicals are the best bet, says Quantum Securities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sanjay Dutt, director at Quantum Securities said there are clear indications that 2020 would be a better year for equities, which is evident from the fact that despite the Iran crisis blowing out, the Nifty did not go below 11,800-11,900  and the midcaps continued to show strength. In fact, the day before yesterday, midcaps outperformed everything else, he added.

According to him, the cyclicals are going to be the best bets. “Investors must note that all those people who survived this carnage – relating to governance issues, debt, insolvency – over the last two-three years in the corporate sector, are going to make a lot of money in the next five-ten years.”

So, it would be prudent to pick up good names, good managements and just have patience and not worry about these geopolitical tensions. It is not going to change the fundamentals of the market. You could see price damage but one will have to live with the volatility,” he said in an interview with CNBC-TV18.

When asked what was the biggest risk in 2020, he replied, “Ultimately it has all got to do with growth. If we do not have growth pick up, if we do not have things starting to look good over the next two-three quarters, we are going to be in bigger problems. That is the only risk that we are dealing with.”

However,  it is comforting to know that contrary to what the position was last year in July-August, government is on the levers at this point in time and it is very clear about what it needs to do and everything is focused on growth, said Dutt, adding that basically, the government is ensuring that there is adequate liquidity in the system, is focusing on infrastructure projects and is trying to go to industry to do things.

“A very clear pointer has been that in the last few weeks, the credit market is  looking better, companies are able to raise money and things are definitely stabilising. So, the risk definitely remains but it is being mitigated slowly. The last quarter of this calendar year is going to be pretty positive for the markets,” he said.

“The only thing the current government now needs to tackle is the economy because it is linked to jobs and people have been losing jobs over the last few months in various industries,” he added.

Giving his sector preferences, he said it would be a  mix of cyclicals. “Steel is something I like. Construction, select cement stocks are looking pretty good. So it is a wide basket amongst the BSE-500 to pick up and ride out for the next two-three years,” said Dutt.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sanjay Dutt of Quantum Securities believes PSUs will be the next big theme over couple of years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sanjay Dutt, director at Quantum Securities is of the view that there is phenomenal opportunity in the market and that investors need to look at that rather than be obsessed by these 5-10 stocks, which take the index up or down.

Sharing further details on where this opportunity lies, he said, “ For the entire B group and the smallcap (excluding the A group), the marketcap at this point of time is Rs 9.2 lakh crore and the marketcap of Reliance Industries Ltd (RIL) alone is Rs 9.9 lakh crore. So it clearly shows that we have a problem somewhere. Markets are totally disconnected from realities.”

“Therefore, it is impossible to believe that 8,000-9,000 or 5,000 companies, all doing business in the same country total up to a marketcap of Rs 9.2 lakh crore versus one company on one side, which is Rs 9.9 lakh crore. So it shows that there is phenomenal opportunity in the market,” he said in an interview with CNBC-TV18.

According to him, the big theme over the next two years  is going to be public sector enterprises. PSUs have been beaten down to nothing but it is matter of time before they will get re-rated. There is immense value there, he said.

When asked about the auto space, he said, “The feedback that I get from the channels is that the excess inventory has been pushed out, it has come down substantially but one cannot say that demand is going to come up and things are going to be gung-ho from next month onwards.” It is possible that there are early green-shoots but would still prefer to wait a month or two or maybe a quarter to see auto stabilising, he added.

“Early signs are there so for people who want to take a risk and be bold and catch it early, maybe they could take a call. I won’t be surprised if the numbers are down next month again,” said Dutt.

According to him, one can find opportunities across the sectors – there are good quality companies in consumption, in pharmaceuticals, in infrastructure construction, banking and financial services.

On telecom space, he said, “Reliance standalone is an excellent company, excellent investment but till one doesn’t get clarity on how to take a telecom exposure on Reliance, I think the only option left is Bharti Airtel right now or for some real brave people there is Vodafone and i am one of those.”

On the financial side, he is not upbeat on Yes Bank, he said.

When asked about the possibility of the goods and services tax (GST) rates going up, Dutt said, “The fact is that when the corporate tax rates went down, we rallied for two days and we forgot about it. We never realised that that was the seminal change that happened in Indian macro and corporate history but the market forgot about it and we moved on. Yes, economy has a problem, we do have a problem, GST rate tinkering happens, go up 2 percent here, 3 percent there but is that going to change consumption anywhere? It is not. It is going to change for about a month or two or three months, we will absorb it and move on. I am not going re-balance my portfolio based on GST rates but would look at much deeper fundamentals and other important issues that are going to reflect on my portfolio for the next two-ten years.”

“My view is going to change when I see some fundamental shifts happening. If the GST rates goes up 2 percent on something, goes down on something, it is not going to impact me in my portfolio as such. It will have a short-term impact,” he said, adding that fundamentally, if we have a problem in the economy, we need to sort that out.

“More than the economy, we have a problem in the financial system today. The single-most problem that we are all living with is trust issue. There is no trust in the financial system. Till that is not restored, no amount of work can be done,” he further mentioned.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow