Rahul Chadha’s strategy for next phase of market
«Because there is growth slowdown and I have been in India for the last couple of days and there are visible signs of slowdown, whether it is real estate in northern India or consumption part of the economy,» says Rahul Chadha, Shikhara Investment.
What is it that you are making of the market right now? I mean, all the valuation concerns aside, markets and not just us, globally, they do not want to stop.
Rahul Chadha: I think what markets are looking is what Fed would do tomorrow. So, September 18th is when Fed comes for a meet and clearly, we are seeing globally economic data being soft but the hope is that policymakers, particularly here, the central banks come quickly, act quickly, and cut rates quickly, so which is where 50 bps cut from Fed would be reassuring and we have had some statements from the Fed members saying that Fed should go to neutral rates very quickly.
So, should that happen in the US, that would give room to the policymakers here in Asia, particularly RBI to cut rates. Because there is growth slowdown and I have been in India for the last couple of days and there are visible signs of slowdown, whether it is real estate in northern India or consumption part of the economy.
Do you think if there is a 50 basis point cut, do you think that spells deeper worries because the slowdown that you are talking about, that would just raise the red flags or are you expecting that 50 basis point from Fed is the base case scenario right now?
Rahul Chadha: So, that 50 basis point cut, historically, markets
