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||Mr. Krishna Sanghvi, Head of Equities at Kotak Mutual Fund manages several mutual funds like Kotak Opportunities, Kotak Tax Saver, Kotak Balance etc. He shares his extensive experience in the Indian Asset Management Industry and explains how students can make a career in this industry.|
Mr. Krishna Sanghvi, Head of Equities at Kotak Mutual Fund has over 15 years of experience in the Indian capital markets. He joined Kotak Mahindra Group in 1997 and has worked with Kotak Mahindra Primus Ltd., Kotak Mahindra Finance Ltd. and Kotak Mahindra Old Mutual Life Insurance Ltd before joining Kotak Mahindra Asset Management Company. Mr. Sanghvi has significant experience in Credit Appraisal & Credit Risk Management, Dealer Finance, Business Planning and Fund Management. He has been associated with the Asset Management Company since February 2006 where he has been in the Equity Fund Management team managing equity portfolio. The schemes managed by him are Kotak 50, Kotak Opportunities, Kotak Lifestyle, Kotak Tax Saver, Kotak Balance, Kotak Income Plus, Kotak Contra and Kotak Select Focus. Mr. Sanghavi's educational background comprises Bachelor of Commerce, Cost & Works Account from ICWAI, Master of Management Studies (Finance), Mumbai and Chartered Financial Analyst from ICFAI.
Thank you Mr. Sanghvi for speaking to DaulatGuru.com. We are glad that you have taken out time from your busy schedule to speak to us.
What are your expectations from the Indian stock market in 2011 compared to the previous year? Do you think equities will outperform or under perform other key assets classes this year?
The expectations are quite clear; India is on a secular growth track in terms of economy, rising per capita income, positive demography and employment creation. The growth in these variable usually translate into a healthy growth in equities market as the growth is appreciated and rewarded by investors and we believe that the similar trend will be maintained this year also. We had a reasonably good last year and the expectations for 2011 are slightly moderate on account of macro headwinds like oil prices, inflation and interest rates. In terms of absolute numbers however the expectation is positive and outlook for the stock market is good in 2011.
Yes, in comparison to other asset classes, I think equities would outperform this year.
Indian market has witnessed huge foreign fund inflows in the previous year. Going ahead what is the trend you expect in these inflows and how would it impact our equity markets?
Yes, in terms of inflows too there would be some sort of moderation this year. Last year we had inflows of around $30 billion. We are not expecting a similar inflow this year but at the same time, we believe there would be positive inflows for the year due to strong fundamentals of Indian growth story.
The Sensex has declined from 20,500 in December 2010 to 17,500 points in February 2011. Is the market correction over?
Yes, I think market has corrected sharply in a very short time. We would not be much worried about further correction as valuations are again reasonable vis-a-vis the growth.
Do you think the political instability and governance issues affect the markets?
It is difficult to gauge the impact of the political scenario and scams on the markets. We should also consider the positives that have emerged in terms of the actions taken against people suspected. We would rather say that corporate governance would have a bigger role in impacting markets.
Which are the key factors in your opinion that are likely to decide the trend of markets this year?
Essentially there are three factors that would influence and decide the trend of the markets. These are:
1. How Indiaâ€™s current account deficit and fiscal deficit shape up?
2. Impact of rising commodity prices (especially crude prices) and interest rates on Indian economy
3. How the global economy grows with USA, Europe and China being key players?