Markets are flat: Satish Betadpur

In this market what are the sectors you find attractive?

For this market right now we are not trading for the current moment we are looking at setting our portfolio for next year and therefore we are looking at trades that will be profitable for the next year. So we are not really focussing too much on any great placement at this point because markets are flat and we are waiting for things to settle down before we do a trade.

What weightage would you give to the pharma space for your next year’s portfolio?

Pharma will continue to be overweight for us. I think the thing that we are talking to our clients about is to start moving into real estate because that was a space we were underweight in the recent past and we think that over the next year, especially second half of next year, real estate will start driving the market up. We have always been positive within infrastructure so that’s the space we will continue to hold on to but as a change we are looking at real estate and a second point here is with banking space. I think we are little concerned about banking results in the first quarter because we have not had a very good credit growth. Funding side has been kind of expensive for the bank. Net interest margins on the banks will be a little low, so earnings may be a concern. So we were waiting for a correction in the banking stocks and already there has been a correction and we expect that to continue going into first quarter results and after that I think banking would be another driver for the market in India.

The general view is that the real estate sectors are a little bloated, property prices have run up a little too fast too soon and there is some sort of correction expected in property prices. So at this point in time why are you betting on real estate stocks?

It was for the second half of next year. So we are looking at stocks that are correcting right now and if we get Unitech back at the level as we had a couple of weeks ago, we tell our clients to book buy at and if the Unitech is back now to 80 or 80 levels and if it corrects again another 10 per cent pick it up now because we may not be able to get certain stock at low prices again. Now one has to realise that we have had a run up in real estate in early part of this year and subsequently these stocks have just done nothing. And then we expect there be a little of correction in next year but then the second half of next year is when we believe real estate is going to do well and earnings are going to start turning around. So we want to put the money in whenever we get an opportunity to benefit from that turnaround in real estate. So start thinking about these stocks right now, have a position and then build on these positions on debt. This is what we are recommending to our clients.

How are you viewing the DAL and DLF merger? Is this restructuring is actually going to benefit or disappoint the market?

We were not happy with the way they did merger in the sense that I think the promoters got a better deal than the shareholders so that’s why the stocks are correcting and any of these types of reverse mergers always seem to be beneficial to the promoter. So I think there is a little bit of hesitancy on part of shareholders or new shareholders to buy in to DLF at these prices. May be, we will see some more correction at 300 on the stock. Below 300 or 300 would be a very good entry point to get into the stock but we are staying on the sidelines with DLF at this point.