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00:00I want to get a sense of what the governor Tom Keene has been saying about inflation above 6 percent. He seems to think that it might be transitory. That isn't a view shared by everybody else is it. It's sort of a long transitory phase of what we are Don't believe you were discussing the other day was that again coming to a close quote or phenomena for the last two years and then this year going in. We have high cost pressures creeping in. Businesses are going to feel that Finch especially but all that's going on with Claude et cetera and the impact that will have on the Indian economy. What the IBM governor is definitely trying to push through is that you know certain sectors and businesses especially rural we can see that through various high frequency indicators like the wheeler sales FTSE volume growth is still impacted and agriculture will be obviously even more impacted the cost fishers. So I think the governor needs to be mindful of different sectors that haven't really recovered yet from Covid. The other part of that is people looking for havens and they've been taking money out of India. Foreigners have been certainly doing that and that's not exactly engendering confidence. How do you repair investor sentiment. That's going to be the key question here. And meanwhile the retail side of things is going strong. What does this all mean for the sort of market moves you're projecting for the year. We've had almost thirty four billion dollars of if I outflow this financial FII twenty two that's it. That's an amazing amount of outflows that have happened. Despite that the indexes have on a one year basis still trade at around 18 to 19 percent year on year. So obviously the retail investors and domestic institutional investors are know covering for that outflow now. Global investors as I had earlier said in the few other interviews are going to look at the Fed rates. They're going to see safe havens and dollar bonds. Such equity from emerging markets will feel that pressure essentially from a domestic point of view though we are quite bullish because of the fact that gold has now been the third of all grown wave and wasn't that brutal. And in fact as the second one was and businesses are now gathering pace and we're seeing a lot of high frequency indicators suggesting that our domestic economy is opening up. It's just the oil. So feed this war that's bringing that uncertainty that is playing on investors minds. But last time we saw last week a couple of days of FII inflows if things kind of cool off funds and resolve this war issue. I think if ISE from definitely come back. Or as a positive on the thought of some inflows coming through. Amidst all of those headwinds you talked about because it's not just the oil prices it's that weak rupee as well. I wanted to get your thoughts too about the IPO frenzy. You're one that's being a little cautious about that. And we have seen you know pay him of course failing to meet expectations. What's your outlook for IPO is in India. I mean the IPO market has been quite subdued over the last three months. After the December frenzy then the markets kind of especially did that if I kind of gain more confidence and bringing in money in the Indian markets. I think I feel the markets will be under a little bit of pressure. There are more than 30 companies that have received SEBI comments and ready to launch when markets seem the biggest one obviously is. I see. So yeah I'm not seeing any activity yet. But in terms of even as investors when one of the pressure that we were feeling last quartile in terms of evaluating IPO I'm not see that pressure. I don't know. Whereas some of the best sectors that you are seeing opportunity particularly as we look at businesses particularly perhaps I should say picking up some CapEx investment here. So we let capitalism be to see focus fund. So essentially we look at all the consumer sectors across the board whether it's the FSI Auto F C.G. consumer debt as well. And I think those are the sectors which have been beaten down the most have underperformed also in these last few months. And considering that people are still spooked about cost pressures one should look at businesses that have pricing pressure pricing power and essentially be ISE starting to see businesses and stocks that are becoming reasonable and valuation for us to invest from a long term perspective. Whether it's FMC or it'll be FSI especially. And if you want to take a bet on consumer debt. I think so. Now is a good time to deep dive and really evaluate these businesses from a four to five year perspective. Rocky. Just one last one for me. We've seen the retail investor really come to the fore in India last year. You know any any big moves to the downside has been witnessed. Are they scaring off these people. Or does it make them double down. I think the common theme of wealth managers across the board is to invest alongside the dips. Keep some cash throughout the years. The markets considering that earnings for nifty earnings will not be as great as High Flyers when need to earnings growth of 30 percent plus maybe it might be in the 18 to 20 percent range next year. So the markets will also be a little bit subdued considering that we may see some correction in the near term. As I said about the first quarter phenomenal pressure on margins etc. for businesses. So I believe we are just telling investors to be patient and invest alongside throughout the year from a long term perspective.

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Alder Capital Rakhi Prasad on Indian Markets

Alder Capital Investment Manager Rakhi Prasad discusses the outlook for Indian equities and impact of rising oil prices and the Russia-Ukraine war on investors' sentiment in India. She was speaking with Juliette Saly and Rishaad Salamat on "Bloomberg Markets: Asia". (Source: Bloomberg)

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