"Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue," says Sachin Shah, Emkay Investment Managers.
Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market?
Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there.
Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue.
So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters’ time frame that you just mentioned?
Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years.
So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets, but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement.
Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th.
What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting.
Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market?
Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there.
Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue.
So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters’ time frame that you just mentioned?
Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years.
So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets, but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement.
Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th.
What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting.
