Sumary of ‘Markets may not be able to meet FY22 earnings estimate’:
- Markets are at risk of not being able to meet earnings expectations for FY22 and downgrade of earnings, Satish Ramanathan, managing director and chief investment officer, equity, JM Financial Asset Management Ltd, said in an interview.
- If there is a third covid wave, the most vulnerable sectors will be tourism, and hospitality and travel, while manufacturing has learned to cope with it.
- Edited excerpts: Which sectors are vulnerable to a further shock if covid’s third wave hits India?
- The vaccination drive continues, albeit with bottlenecks, and 31% of India’s vulnerable population have had at least one shot.
- The most vulnerable sectors remain tourism and hospitality and travel, while manufacturing has generally learned to cope with the disease.
- Investing in equities will continue to operate in cycles, but as an asset class it is still one of the most attractive with regard to ease of opening accounts, ease of buying and selling, liquidity, and increase in reach.
- The number of dematerialized accounts, as well as steady inflows into mutual funds point to the fact that retail investors are becoming a bigger force to reckon with.
- In terms of comparable assets, equities are still attractive, but on a valuation basis, they are expensive relative to historic trends.