MUMBAI (Reuters) - A surge in Indian shares, that halted trade on Monday, has stunned fund managers who said the rise is unjustified and expecting immediate big bang reforms and a revival in the economy would be a mistake.
Following are the reactions from fund managers to a more than 17 percent spike in Indian shares on Monday:
SAMEER NARAYAN, HEAD-EQUITY, FORTIS INVESTMENT MANAGEMENT:
"It is very difficult to say if it's justified. Yes, there is definitely some sort of stability. The outlook has improved at least on the stability aspect... but there are a lot things that need to get fixed in terms of the entire reform agenda.
"Right now, it is only expectations and hope. May be we might be pricing in far to early.
"Now valuations are almost 16 times of consensus earnings and no longer cheap.
TOP BETS: Financial and energy
SANJAY SINHA, CEO, DBS CHOLAMANDALAM ASSET MANAGEMENT:
"A rally like this seems to be suggesting that our fundamentals have improved. (It) is discounting what would be a situation 12-18 months down the line.
"In the private sector it will lead to much better investment climate. In the capital market it will be much more enthusiastic participation by all sections and on the global level the visibility of India as an investment destination will become even more bright and that should attract capital at affordable rate.
"If you are coming into the market please do not come with the perspective of a three-month, six-month."
PANKAJ TIBREWAL, FUND MANAGER, PRINCIPAL PNB MUTUAL FUND:
"Actually, fundamentally speaking, things will take its own sweet time. It's not that the government today is coming to power and tomorrow they will do some big bang reforms.
"Though markets run ahead in anticipation, after today's move, the market will start asking: what next?
"Probably a couple of weeks later you will start looking at what's happening globally.
"Flow will continue may be positively to India but you need to take it with a pinch of salt. Are we running too fast, too soon? I think that's the question you need to ask to yourself."
TOP BETS: Infrastructure, FDI related sectors such as aviation, telecom, insurance.
MANISH BHANDARI, FUND MANAGER, ING INVESTMENT MANAGEMENT:
"What you have to do is to look at all the bills that the Congress wanted to introduce, were debated and (the) Left had shut doors on. And insurance was one. Those are the things we will be watching carefully.
"I am worried about people's expectations, which are very high. We are slowing down. Don't see one month's frame."
TOP BETS: Capital market linked sectors, infrastructure
ANAND SHAH, HEAD-EQUITY, CANARA ROBECO ASSET MANAGEMENT:
"This is a bigger verdict than 1991. We haven't seen such a verdict and with Manmohan Singh at the helm, this much of a reaction is fair.
"Indian consumers continue to remain my bet. With a stable government consumption is only going to pick up.
"I am wary of IT and metals because the rupee has appreciated and when you have your domestic consumption story intact, why will you bet on a recovery in US?"
T.P. RAMAN, MANAGING DIRECTOR, SUNDARAM BNP PARIBAS ASSET MANAGEMENT:
"Now that the mandate is clear and the Congress has emerged as a very, very strong winner that it can have its say.
"Every person who is connected with the capital market will definitely feel bullish."
"Euphoric moments will probably stabilise and settle down. The direction of progress is well known, but then, what is important is the push and pace of progress has to be fast and now I think it can be safely assumed that the pace of the progress will be faster.
TOP BETS: Infrastructure, power
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