ETMarkets Smart Talk- It is a prudent approach to divide the portfolio into two parts - Core and Satellite: Srikanth Subramanian
“The core part of your portfolio should make up for the majority of your portfolio. The mix of core and satellite depends totally on your risk appetite,” says Srikanth Subramanian, CEO, Kotak Cherry. In an interview with ETMarkets, Subramanian said: “We have seen a fair amount of sector rotation in the markets where almost every sector has contributed to markets attaining new highs” Edited excerpts:Market are climbing new peak every day with Sensex at 66000 while Nifty50 is above 19500 levels – is the market running ahead of fundamentals? Markets have surpassed the 19800 mark and are trending higher. On one-year forward EPS levels, Nifty50 is now trading above 20 price-to-earnings (PE) levels.
The yield gap has been negative for some time now and is now trending toward the lowest it has been in the last three years since the pandemic started. The yield gap is a sign of how far the market is underpriced or overpriced. A negative yield gap indicates markets are overheating and maybe overvalued if you go purely by the quants.
The market has run up and as long as there is no PE multiple re-rating that happens, the earnings growth will have to live up to the expectations. The street expects the Nifty50 earnings per share (EPS) growth to be somewhere around the 15% mark for FY2024 and 25% year-on-year (Y-o-Y) for the June quarter.We may call this a global rally as most of the global markets have done much better so far in 2023 and India is just catching up now. What is fuelling optimism? In the calendar year 2022, most of the major global indices had witnessed significant declines.
NASDAQ corrected over 30%, S&P witnessed over 18% correction. European markets also registered double-digit losses in 2022. India witnessed
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