Current consolidation phase to create space for future market rallies: Vikas Khemani

economictimes.indiatimes.com:

Vikas Khemani, Founder, Carnelian Capital Advisors, says: “I am fully convinced that India will see disproportionately large flows in times to come. In the last two years, we lost close to $40 billion as the interest rates were rising in US and emerging markets and so there was the outflow. But that is all set to reverse.

We will see much more than $40 billion coming through in the next couple of years as the interest rates and environment settles down.”Do you think the summer rally of 2023 has hit a pause button?We had a very sharp rally in the recent past, post-SVB crisis and in this kind of market, it is very natural for a consolidation to happen. That is what is going through. Also, we have a lot of concerns coming up on the horizon in terms of inflationary pressure, especially the developed markets.

These are the very natural processes of consolidation in the market. Markets never go one way. But I feel that this nice consolidation phase is good and makes a nice space for further future rallies in times to come.What could be the trigger from here till December or let us settle the Budget because most of the triggers in terms of liquidity, earnings, valuation mismatch, have been played out?We always underestimate that.

If you see six months ago, I do not think anybody expected this kind of liquidity coming in. And that did come in. What we have seen is a very small amount of liquidity hitting.

India is significantly underrepresented in the global portfolio, while our cloud, our GDP, our growth is far better placed than any other markets around. As you see this bridging of the gap of India getting represented well in most global portfolios, you will see more and more flow coming. I am fully convinced that India will