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Fear is overdone, exit of FIIs gives an opportunity to buy: Sanjiv Bhasin

"11,400 ideal level to start SIPs in Nifty, Bank Nifty and select largecaps and midcaps"

ET Now|
Updated: Jul 19, 2019, 08.32 PM IST
There is an extremely good opportunity to buy in the next 10-12 weeks through SIP in select midcaps and large caps, says Sanjiv Bhasin, Executive Vice President, IIFL Securities. Excerpts from an interview with ETNOW.

What should one do with the midcaps that are cracking?
The fear is overdone. Market is very despondent and that has more to do with some of the FIIs exiting because of the tax. A large part of the imponderables are on the positive side and we are calling it the 12-week factor, from here till middle of October. October onwards we are very bullish on the market and we think that in this fear, you should do a SIP for the next 10-12 weeks in select midcaps and select largecaps, because we think midcaps maybe on the way to the bottom. This is a very good selloff in the broader market and the largecaps.

It tells you that inherently over ownership or the exit of some of the FIIs are giving you an opportunity. The cement numbers are a clear indicator for an economy and it says the economy is only going to get better from here. So, there is an extremely good opportunity to buy in the next 10-12 weeks through a SIP in select midcaps and large caps.

Though the sentiment has turned really sour currently and we have been getting some really dire predictions on liquidity, growth, no one is seeing the light around the corner. We are now hearing an outlook which is a little bit more long term -- four to six quarters -- as opposed to a pick up as early as the festive season or the end of the year? Would you disagree?
It is overdone and it is always the screen which tells you. When I was in Mumbai for many years, the best saying was what a Guajarati bhai told me: Bhav bhagwan che. Bhav is what is telling you that the fear is there. That fear is overblown and I am not saying that there is not macro weakness, but look at the cost of money on the bond yields, look at the rupee and global liquidity. It is just a matter of time, maybe once this expiry is over, you should start to see very good inflows from FIIs.

Wait for the government to start to act on more consumption-led themes. They have already given you a wicket on some of the NBFCs and the recapitalisation of PSBs. Going ahead, they have a good opportunity of instigating growth through a lot of other measures. We are being opposite. We think these 11,400 on the Nifty is an ideal place to start a SIP in both the Nifty, Bank Nifty and select stocks both on largecaps and midcaps.

After October, you will be very happy that you did this because fear is generally the best time to be contrarian and start to buy.

What is your view on Reliance?
Reliance will give a slightly weaker number on the net and we have to see how the GRMs are. But do not miss the wood for the trees. Yesterday, they announced $1 billion capex in the gas basin of KG which is telling you they are putting their money where their mouth is -- whether it is technology in the shape of Jio and the other businesses which are online. They are taking on Netflix in OTT. And on the energy side on gas. In fact, for gas, this participation in new pipeline in partnership with GAIL should see a lot of flows from overseas and Reliance is one of the key players there.

Any fall over here is a very good opportunity. In fact, Reliance, ITC, UltraTech Cement, ICICI Bank and Sun are five names which we are suggesting to very actively have a large SIP for the next 12 weeks. By the end of the year, you will be much happier that you bought this fear and Reliance would be one of the constituents. We think Reliance by the end of the year and maybe March 2020 should be closer to Rs 1,450-1,500.

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