Private sector banks, fixed income could outshine in a volatile market: Rajeev Thakkar
«I think fixed income will be a tough competitor to equity is my guess. Again, no one knows, but my guess is fixed income also has a reasonable chance,» says Rajeev Thakkar, CIO, PPFAS.
Expecting it to be a better year?
Rajeev Thakkar: Hopefully, yes. Better year, I am not so sure because last year returns have been one of a kind and it is very-very difficult to better that. If we eke out a reasonably positive year in the 12 months ahead, I think that would be good.
So, low single digit, high single digit?
Rajeev Thakkar: Difficult to say. It is a coin flip, but somewhere in that range. I think fixed income will be a tough competitor to equity is my guess. Again, no one knows, but my guess is fixed income also has a reasonable chance.
So, then, why you are expecting such a less return, other than valuation and earnings being a concern at this point of time, anything else that is worrying about the equity markets?
Rajeev Thakkar: Typically, it is valuations. So, my favourite example is things like Infosys and Wipro, if you bought them in early 2000, let us say Jan 2000, in a decade Infosys probably increased its profits from 250 crores to six-and-a-half thousand crores, but the stock gave barely National Savings Certificate returns over 10 years. So, if starting valuations are very-very high, then it becomes difficult to generate returns. So, if we really look at our portfolios and the stocks that are there, all the themes that are running, how many triple digit earnings multiple stocks are there and these are
