Good time to enter market from a long-term perspective: Kapil Bali, Yes Invest

In an interview with ET Now, Kapil Bali, CEO, Yes Invest, says that it is the right time for long-term buyers to start considering stocks in a staggered manner. Excerpts:

ET Now: There is a massive correction underway in the market and we almost tested the 200-day moving average on the benchmark indices. What is happening in the market and what is the road ahead?

Kapil Bali: We feel that the market had risen last year largely on account of upbeat sentiment. The market moved up significantly between January and May 2014. It continued to move up post the general election results.

The sentiment was upbeat as a pro-business government came to the power at the Centre. The market has risen tremendously in the last one year. Now what the market is expecting is a turnaround. The market seeks output on the policy front. In a nutshell, this is what is happening in the market now. So, quarter by quarter that will play a huge part in deciding the direction of the market. That said, global cues are also influencing the market. There is a lot of flux going around in the global environment.

ET Now: How long do you see this sort of correction last then? How should one really approach the market right now?

Kapil Bali: If you compare the Nifty from its recent high of 9,000 levels, it has already corrected 7-8 per cent. The market is now is a range-bound movement. So from a short-term aspect, there is absolutely bearish thought in the market. But from a long-term perspective, if you look around, the optimism is still there in the market. The longish sentiments are prevailing. Though the market is jittery on a daily basis, we feel that the optimism in the market is very much there and this optimism for a long run is very much visible.

ET Now: But what about the savour mood right now? What is it that you are telling your big HNI clients in terms of portfolio construction because that is something that you folks really do cater to at Yes Securities?

Kapil Bali: If you have a long-term view of two to three years, it is still a good time to enter the market.

The valuations are good enough. We expect the earnings to start coming into the market in the next two to three quarters. Once the numbers start improving, even if we take a conservative view of 18-20 per cent over two years, we feel that the markets are very much positive. Now the next logical question that comes in the mind is when to enter the markets.

We would always say at this point at every dip, you should make an entry with staggered approach. A cautious approach should be adopted.


ET Now: What are the kind of returns on a base case basis, which you think investors should expect within this year?

Kapil Bali: Last year, the earnings growth was around at 7 per cent in the markets. We feel that earnings will start coming into the markets maybe from the second half of this year. Depending on that, the markets should give around 10-odd per cent in this financial year. From our view, it is a 10 per cent kind of movement for FY17. The market should do good. Coupled with this, I would like to add that because of the softening of interest rates, we feel that obviously that has to be transmitted into the markets by the intermediaries. Credit offtake is already around the corner. If good monsoons come in average, post monsoons, we can look at another rate cut. That should again help the market in achieving what we believe is a 10 per cent plus kind of return this year.