Sunil Subramaniam on 4 ways Sundaram Mutual changed stance in last 6 months
Sunil Subramaniam, MD & CEO, Sundaram Mutual, says “we are back to being neutral to overweight on cement, so that is one big change in stance. The second stance is that we were heavily underweight in pharma; we moved that to neutral because we see a lot of selective stocks that we can buy there. The third is in terms of the new-age IPOs. We are buying into these IPOs a few months after listing because the IPOs tend to have the prices jacked up a bit.
Markets, a bit of a yes and no here. Bond yields are going higher. FIIs are selling. The logic is that if yields are going higher, FIIs will sell more and that will weigh down Indian markets. Is there logic in assuming that?
No, some amount but I would say that it is more about the trend in future yields rather than the absolute level of the yields.
Why I say this is, interest rates have been high in the US for quite some time and from April onwards we have seen while emerging market flows have been under pressure precisely because of the yields, India had been receiving flows despite the higher yields. So, it is a trend line that matters because for India more than yields it is the oil price trend that is more critical.
As far as FIIs oriented towards India are concerned, the higher yields in the US have more or less been factored in.
