Ajay Tyagi on why valuation can be the biggest trigger in market
Ajay Tyagi, Head — Equities, UTI AMC, says “sometimes things which are overdone on the other side by which I mean, let us say, highly undervalued may just have no other trigger but that trigger of being extremely cheap. For those investors who are viewing these businesses over a 3-5-year perspective in the future rather than just the next three months would just start to buy into them because they find them extremely attractive on valuation. I cannot say which trigger would work, what event would work but suffice to say, we have seen this multiple times over multiple decades that valuations itself is the biggest trigger more often than not.”
The liking or the craving for Indian equity is surging. Indian people, believed to be savers, are pulling out money out of their fixed deposits and are participating in the market. And if indeed it is happening. Nilesh Shah, of Kotak believes that MTM gains are not the right way to look at it. But is that the craving for equity? When you talk to your distributors across the country and look at flows in your own funds, what exactly is the situation on ground?
Ajay Tyagi: Liquidity usually chases the asset class which is delivering. So in this particular case as well. I am not surprised that people are taking money out of fixed deposits and putting it into equities because it is the most performing asset class and therefore it will have followers. So quite frankly, it is not as if there is a sudden awakening or reckoning that equity as an asset class makes money in the long run.
