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Tuesday, December 25, 2007

Robust mkts to pave way for next 2-3 mnts: Amit Dalal

Amit Dalal of Amit Nalin Securities believes markets are looking very robust. However, he said valuations are extended, secondary market movements are not healthy, there is going to be more volatility, but markets are good for at least two-three months more.

 

Excerpts from CNBC-TV18's exclusive interview with Amit Dalal:

 

Q: How are you feeling about the market, Ramesh (Damani) sees the markets going up for the next couple of months after that storm clouds gathering? What do you feel?

 

A: I am very much with what Ramesh says; the markets are definitely looking very robust and if you read the news today, GMR was able to raise USD 1 billion in QIB, Sterlite is on the card to raise another QIB. All this definitely tells us that there is a lot of money, which is still going to chase Indian stocks. Valuations are extended, secondary market movements are not healthy, there is going to be more volatility, but our markets are good for at least two-three months more.  

 

Q: Is there anything you would buy in power now?

 

A: It's a difficult question considering the fact that these power stocks will do better in the next two-months, even though they are very much on the higher end of the valuations spectrum. But you still have a further run ahead for most of the power stocks mainly because whenever you have a leading momentum sector, which does not have any negatives ahead of it, in a good market it tends to participate even further.

 

So if you were to ask me, power sector will give you positive returns, but it's definitely a dangerous place to be.   

 

Q: Do you think a different set of leaders might emerge in 2008 to take the markets higher? Or do you think the same set of leaders for this bull market will continue to propel momentum and sentiment?

 

A: It never happens, every year we have a different set of leaders, which give us the final spurts in the markets, though of course, I doubt we will be able to take it away from very large marketcaps like Reliance Industries and the NTPCs - they will remain the very large players of this market. 

 

But I do see a whole new sector coming around, which will perhaps become far more robust and give you more and more reason to look at; the financial services sector. The way the economy is growing, the way the need for money is growing, the new products that are required for growth; that sector to me spells like a very promising sector as a leader for the next two-three years; you will have insurance divestments, you will have insurance company listings, the opportunities over there will be very good for investors