Stay away from metals: Vivek Mavani

Vivek Mavani, VP-Institutional Equities, Brics Securities, talks to ET Now on metal space.

What's your view on Hindalco and Tata Steel and given the kind of volatility that we are seeing in the global commodity prices, would it be a prudent call to perhaps stay away from metals for a while?

Absolutely. Let me split it up in 2-3 constituents. From trading perspective, a short call may definitely makes a sense as far as some of these commodity names are concerned but shorting is something, which always fraught with risk because the intermediate bounce back rallies can be fairly sharp.

So one has got to be swift there but on a medium term, I would sense that as far as the entire commodities pack is concerned, Sterlite, a Hindalco, a Tata Steel, if we were to talk few weeks or few months later, I am not sure but I am pretty certain that they are going to be trading definitely at lower levels than what they are today, that's as far as short-term traders are concerned. From an investment point of view, definitely they do not make sense.

In fact those who have it in their portfolios, it make sense to even exit and move to something, which is less volatile in nature, which has something more going in favour for its own performances, earnings, etc., where in terms of commodities, we have nothing in favour of them either from earnings or from the market point of view, so there is actually no trading or investment rationale for that.