Rakesh Jhunjhunwala says market peak far away; sees Nifty doubling in 4-5 years
The Big bull of D-Street says the Indian economy is on the threshold of major growth and the NPA problem is likely to be resolved in 12-14 months.
The big bull of D-Street, Rakesh Jhunjhunwala said investors should not get worried about one day of correction as "we are far away from the peak". Nifty is more likely to double in the next 4-5 years, he said in an exclusive interview with CNBC-TV18.
The bull market will only eclipse when three factors are present — valuation froth, commitment froth and when there is bad news, he explained.
The bull market will only eclipse when three factors are present — valuation froth, commitment froth and when there is bad news, he explained.
Elaborating on them, Jhunjhunwala said just by valuation froth, bull markets will not end. By commitment froth, it means that there is a lot of leverage buying, which is still not there. The third factor is bad news and when investors sell on the bad news, there is no buyer.
“There may be valuation froth right now, but there is no commitment froth. There is bad news and when investors are selling, they are able to find buyers. So, I think, we are far away from a market top,” said Jhunjhunwala.
Congratulating PM Modi-led government on completing three years, Jhunjhunwala said that he (Modi) is preparing India for a big change. “The effect of his policies will take time, but I don’t think it is 2-3 years away and (only) then we would see explosive 10-11 percent growth,” he added.
PM Modi has transferred a lot of money into the states. He is increasing spending and is still able to maintain fiscal discipline, he said. “I don’t think Indian economy has ever seen such a sunny time where you have stable interest rates, and good currency value. We are on the threshold of major growth and the NPA problem is likely to be resolved in next 12-24 months,” said Jhunjhunwala.
The S&P BSE Sensex rose over 27 percent while the Nifty rallied over 30 percent in the last three years. However, investors made money in the broader market as both S&P BSE Mid cap and Smallcap indices nearly doubled in the same period thanks to global and local liquidity.
The big bull is of the view that the flow of money from Indian households has just started, thanks to demonetisation. “Tsunami of local money will come into the local market. Morgan Stanley is predicting that USD 425-825 billion in the next 10 years to flow into markets,” said Jhunjhunwala.
“There may be valuation froth right now, but there is no commitment froth. There is bad news and when investors are selling, they are able to find buyers. So, I think, we are far away from a market top,” said Jhunjhunwala.
Congratulating PM Modi-led government on completing three years, Jhunjhunwala said that he (Modi) is preparing India for a big change. “The effect of his policies will take time, but I don’t think it is 2-3 years away and (only) then we would see explosive 10-11 percent growth,” he added.
PM Modi has transferred a lot of money into the states. He is increasing spending and is still able to maintain fiscal discipline, he said. “I don’t think Indian economy has ever seen such a sunny time where you have stable interest rates, and good currency value. We are on the threshold of major growth and the NPA problem is likely to be resolved in next 12-24 months,” said Jhunjhunwala.
The S&P BSE Sensex rose over 27 percent while the Nifty rallied over 30 percent in the last three years. However, investors made money in the broader market as both S&P BSE Mid cap and Smallcap indices nearly doubled in the same period thanks to global and local liquidity.
The big bull is of the view that the flow of money from Indian households has just started, thanks to demonetisation. “Tsunami of local money will come into the local market. Morgan Stanley is predicting that USD 425-825 billion in the next 10 years to flow into markets,” said Jhunjhunwala.
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