Telecom stocks are back on the radar after a very long time due to a decline in the competition ( operating like a duopoly) and a consistent increase in data services demand. Pharma stocks are also back in vogue after been an underperformer for no. of years amid easing in regulatory oversight in U.S.A and cheaper valuation.
BSE Telecom index is up 12.82 per cent and BSE Healthcare index 13.72 per cent so far this year. While BSE Bankex saw a drop by around 40 per cent. Benchmark SENSEX is down 22.08 per cent for the same time period.
“Pharma and Telecom sectors can not command over 30-40 per cent of total market capitalization that currently enjoys by the financials. Financials themselves need to give away the position which still holds the key to make money,” Raamdeo Agrawal said.
He said India’s chase for a $5 trillion GDP target will lead existing and established businesses for market share, leaving room for new players to emerge. Allocation in an asset is a key and investors in India need to diversify by investing globally in products like US market-linked ETFs for better returns.
“The new diversify globally trend in Nasdaq and other markets through ETF’s,” he said adding Nasdaq ETF to S&P 500 ETF, because of its exposure to high growth companies that don’t exist in India.
In the present time of rising anti-China sentiment all over the world in the wake of the Covid-19 pandemic, everybody is looking for an alternative source. The only country with that much capacity is India.
Quality will be a key in these hard times, that would go way long in the survival of the businesses. Good business will not only survive but will also thrive in the market because of Covid-19 impact on not-so-good business, ” he added.
“The polarised nature of the market will continue, remaining narrow and favoring Quality“, he said.