What is Nilesh Shah’s vision of investors’ approach to the markets?


Q: Do you think that policy makers, in an effort to catch up with reality and soaring inflation, might overdo it and cause far more damage to the economy and markets than is necessary?

Answer :

>The political action will be done in two parts. Part 1 – liquidity management, controlling inflation and demand; Part 2 – supporting growth

> Hope and pray that regulators know when to lift the pedal

Q: In other words, can the selloff we’ve seen in the stock markets take place in two phases? Or will the second phase see a relief rally that the first phase ended?


>Equity markets are reacting in anticipation; they react to the first part of the movie now

>Pricing liquidity crunch, rising rates, slowing growth, demand side issues, recession

>Markets will react to the possibility of increased liquidity, lower interest rates and pro-growth measures

Q: On a scale of 1-10, with 1 being the biggest problem, how would you rate India’s economy: 6 months ago and now? Do you think the next six months will be even more painful for the Indian economy and markets?

Answer :

> We look at an oasis in the desert

> Our rahu kaalam (Indian economy) has started; rising oil prices will hurt growth

>Growth is going to be hit right now due to triple-digit oil prices, rising inflation and REIT outflows

> In six months we may be in a better situation if we have a scenario where the Russian-Ukrainian dispute is settled, oil prices are in double digits, the world’s central banks have inflation under control

> If the situation continues to deteriorate in six months, we could be in a worse situation than the one we find ourselves in today

Q: There was a time when diversifying into other geographies and markets was advocated to investors to catch rising stars globally. Yet Kotak’s Global Innovation Fund has had a dismal comeback over the past year. What was wrong here?
Answer :

>Link with Wellington Asset Management for this fund

>The Fund faced a period of turbulence that no one had anticipated

>After fund launch, China cracked down on tech stocks, inflation and US interest rates rose

>Investors should treat Kotak’s Global Innovation Fund as a high-risk, high-return offering

>Those with a risk appetite can average (this fund) at current levels

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