Porinju Veliyath predicts a long bull market for India

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Pee Vee
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Porinju Veliyath predicts a long bull market for India

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Porinju Veliyath, the ace investor, known for spotting smallcap stock at the right time and right price, thinks 7 per cent is the bottom for India’s GDP growth going forward.

Stock market is slave of earnings and better growth will not go unnoticed.

Veliyath, who is Managing Director and Portfolio Manager at Equity Intelligence, says the Nifty50 will move to new highs this year and the bull market can extend to half-a-century.

While the GDP data baffled many experts, who have started doubting the CSO estimates, Veliyath thinks this surprise-to-many GDP figure is the result of the positive impact of demonetisation, which exceeded the temporary negatives of the cash crunch.

“A Clue for those doubting 7%? Black turning White, compensating the temporary dip in white!” Porinju said in a tweet on March 1. This is not the first time he reacted to GDP growth.

Yes, the journey will not be as smooth as most of you may think, but the long-term trend still remains on the upside. And, the last print on the gross domestic product (GDP) data signals that change, he said.

Veliyath had welcomed the demonetisation drive when Prime Minister Narendra Modi announced the same in November 2016. He called it an “important step towards equal opportunity for every Indian” and “the single biggest economic event in India’s history.” He also expected the move to boost GDP by 2 per cent.

India defied expectations on Tuesday to retain the title of the world's fastest-growing major economy. Annual gross domestic product (GDP) growth for the October-December quarter came in at 7.0 per cent, a tad slower than 7.4 per cent reported for the previous quarter, but faster than the 6-6.4 per cent forecast that most economists had made.

The latest GDP print suggests the Indian economy saw little or no impact from demonetisation. “With GST materialising, the demonetisation and related efforts are going to create a lot of structural changes in the economy – from black to white, from unorganised to organised,” said Porinju.

The fundamentals are improving fast and long-term investors have to hold on to their positions as the Nifty50 could hit fresh new highs this year and go beyond the 12,000 mark in two years.

“Our market has a long way to go. The structural reason for that is the economy itself, which is very small today. It will have to grow. We have no other way but to grow,” Porinju said in an interview with ET NOW last week.

He said the Nifty50 can go to 12,000-13,000 levels in the next two years and investors should stick to quality midcaps.

http://economictimes.indiatimes.com/mar ... 407388.cms
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