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Pashupati Advani , Founder, Global Foray , says there is no real trigger to take the market to a new level. FIIs are selling, SIPs are still there which is good, but the actual retailer who has been providing the liquidity and enjoying the market is not being able to make money and will leave the markets and that is not a good sign. Advani says he is still very defensive and looking at cement, a little bit of pharma and a couple of PSUs.
He is being very conservative and still sitting on some cash, waiting for opportunities. What are you buying right now? What is keeping you busy? Pashupati Advani: Trying to stay out of trouble. I bought Reliance last week.
I am crying. But what is your view in general? Do you think markets have corrected enough and now we have that froth and where everybody, in a sense, was just trading and making money and BTST which is buy today, sell tomorrow, had become buy in the morning and sell in the afternoon; is that trend over? Pashupati Advani : No, I will tell you what is happening. If the market is going to float in a range, then retail is not going to make money and then it is going to gradually walk away.
It is going to be losing money, in fact because, as we have seen in the options, if you buy options, they are extremely expensive. So, they eat your money away. I feel that while markets go up and down, 100, 200 points in a day and you are still in the same range, it is going to make the retail investor go away and that is not good.
But again, I do not see any real trigger to take us to a new level. I think we are at a comfortable level. But FIIs are still selling.
There is a lot of excitement pulling money back to the US with Trump coming back into the seat and that is going to have some effect. So, we have to live with it, we have to live around it and that is what it is. Money flows are driving our market and right now money flows are net negative.
Why are you worried about buying Reliance? It is doing okay. There were a lot of people who said that it is now entering the value zone. Pashupati Advani: No, no, absolutely.
I am not unhappy with the purchase, I am just unhappy that I paid a slightly higher price than where it is right now, so that is all. So, I am crying about that. Stock Trading Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading By - Rohit Srivastava, Founder- Indiacharts.
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Pashupati Advani: Yes, it is fundamentally a good stock. There is going to be unlocking of different values as they do the US listing sorted and they are trying to list other bits and pieces here. So, let us see what happens.
I think that it is fundamentally a very strong stock and it has got a lot of businesses and a lot of things good going for it and the core part of the portfolio, I just added to mine. What is the view on HDFC and ICICI Bank? Pashupati Advani: They are doing great. HDFC Bank has got some unlocking because they are coming with a new issue of one of their subsidiaries, so that is obviously going to give some value.
I mean, people do add the values once that gets listed. So, it is up from like the 1600 type level to almost 1800 in the last two weeks and that has been good for the stock. ICICI is there.
It kind of follows. But again, I am not as bullish as others are on Bank Nifty because I think that the banking system has got some issues which are buried and will be buried for a while, but one should not be jumping into the banking sector with both feet. Let us look at Adani Group of stocks and they have come back.
At the same time last week, it was quite gloomy, but now it looks like the sun has started shining again. Pashupati Advani: Well, four of the stocks have been put into F&O, and that has helped a lot. I think that will provide some stability.
Again, the world has changed, I would not say for better or for worse, it is just that it has changed and this kind of stock is benefiting. Big is beautiful. We are seeing it in Reliance.
We are seeing it in Adani. Now I would like to see all four of them, all the Adani stocks and all the Reliance stocks move up and we will be happy and then the market will also be able to get into it and make some money. My current issue is that Adani stocks do not seem to be heavily owned by retail whereas, for example, Reliance stocks are.
So, they need to get some more retail participation into all the Adani stocks and once that happens, we will be much better off. You Might Also Like: Over time, money will flow back to India; go with quality names and you will be rewarded: Santosh Rao We just heard one of the experts from UBS say that one should stay away from the two-wheeler space because it does not look like it is going anywhere. Would you agree? Pashupati Advani: Well, people are looking at the PEs of two-wheelers and seeing that they are down and that is why there is a little bit of a step back if you want to call it.
We have to see a surge in numbers again. Even though there was a bit of hype around Diwali, but before Diwali, running up to Diwali, it was not as robust as people thought it would be. Let us see what happens in the next three months.
Where is Ola headed? We think Ola is only about scooters, but there is a battery business in it also. They are innovating. They want many first to their advantage.
Pashupati Advani: The thing about batteries is that there is some technology change happening and we are seeing that with news coming out of China. I have not seen anything that has shown a new technology that is good, but there is some talk of it happening. Now, obviously, if you are in the battery business and the technology changes and you cannot move with it, you are going to have some issues, I think that is what Ola is suffering from.
The other thing is they are talking about doing battery swapping at stations rather than waiting for people to charge, simply as a way to keep the traffic moving and getting the people coming. Now, whether Ola is able to participate, whether the batteries are standardised for auto as well as the two-wheelers, let us see what happens. It is a huge space, with lots of big players.
Ola is one of them. It is going to be a very interesting space. The OMCs are also sitting there saying, hey, we have got petrol pumps, now what do we do? Toyota has obviously bet on hybrids.
Some of the others like Tata Motors and all are saying and of course Jindals are in talks to take over the majority in MG’s India arm. They are basically saying we are going electric. So, let us see what happens.
There is lots of potential for people to make money and lose money if you are on the wrong side of it. You Might Also Like: Adani shares drew retail investors just before US probe pullback One common theme that I have heard from a lot of consumption companies and experts is that consumption has stagnated and something is needed either from the RBI's end or the government's end to spur consumption. What is your take? Is that something which is very imminent and either the government or the RBI will have to blink first? Pashupati Advani: We have seen retail taking money out of the markets.
Money making seems to have slowed down. A lot of that money was coming into consumption, and that is also slowing down. So, how do we get retail to make money again to spend again? Whether it is the bottom or almost the bottom of the pyramid, that is going to be difficult because the way I am seeing the market, it looks like it is floating and it is going to be very-very difficult to make money at least in the next one or two months.
I think that this trading of even the BTSTs, you will make some, you will lose some, you would not really be taking money out of the market. My concern is that FIIs are selling, SIPs are still there which is good, but the actual retailer who has been providing the liquidity and enjoying the market is not being able to make money and will leave the markets and that is not a good sign. What is driving IT? IT is growing at 7-8%.
You can be charitable and say 9-10% for the big ones. If the sector is growing at 8-9%, why are PE multiples north of 25 holding on? Pashupati Advani: We have to realise what is happening with the dollar and the rupee and the rupee is currently at 84.5 and it seems to be hitting that.
As long as the dollar remains strong versus the rupee, it is going to definitely have some effect on where IT companies go and that is the nervousness which is stopping people from jumping in. However, even 25-30 PE is also expensive for IT stocks, particularly if you compare them to some of the ones that are outside India. I would be very cautious in IT.
I am not as bullish as most of the other people. And I say that the fact that the rupee is having some problems against the dollar and RBI is having to sell dollars to stabilise is something that we need to be cognizant of and that is going to make a big difference to us and our markets over the next months to come. Which segment, sector or stocks are you looking at adding? Pashupati Advani: I am still very defensive and I am looking at good old faithfuls like cement, a little bit of pharma and a couple of PSUs.
I am being very conservative because I think we are going to get opportunities and I am still sitting on some cash. (You can now subscribe to our ETMarkets WhatsApp channel ).
