Prateek Agarwal Views on the Current Market Scenario


Prateek Agarwal Suggests to Avoids Commodity and PSU Stocks for Now, Jan 2020

Prateek Agarwal is an engineering graduate and holds an MBA from XIM Bhubaneswar- India. Engage in the capital market for more than 22 years; begin his journey in 1994 with SBI capital markets where he spent around 10 years.

In the earlier phrase from 1994 to 2001, he was with the research department at SBI capital markets Ltd.Then he was head - Research and the tenure were from January 2001 to December 2004.

Afterward, he joined the ABN Amro Asset management company with whom he worked for around 1.2 years (2006-2007) as Head- Equities.

This last assignment was at Bharati Axa IM as head of equity (2007- 20011).

Currently, he has joined the ASK group in April 2011. His current position is that of a chief investment officer. ASK investment managers Limited to provide investment management services focusing on real estate and equity investments. Also, the company renders portfolio management investment advisory services to customers worldwide

Prateek Agarwal Views on the Current Market Scenario

  • According to him, the New Year has seen you and the change in sentiments after that text cut declaration has been quite sharp. Please suggest that the reforms are in favor of equity markets and this is there to stay .

  • To quote him," India is places were given the low equity penetration, you expect the flows from Indian population funds to get stronger as we go forward. When sentiments revive and FIIs also end Aberdeen, you get the kind of market we are looking adjust now."

  • His outlook on stocks like ok Yes Bank, Essel group, RBL Bank, Indiabulls.

  • He states that there are structural problems in India where the housing finance business has inherent ALM (asset-liability management) mismatch. Too much lending to the builders who are having large inventory has given rise to bigger issues. Housing finance business seems very lucrative on the papers and can have strong growth but it is accompanied by various weaknesses. ASK has not ventured to any of these businesses in the last 8 years and has no plans for venturing as the company is undergoing a very strong reform phase.

  • ASK is currently more formalized, organized that is why many housing finance businesses would have a tough time with ASK. Also, the list from which they are refraining includes Mid-cap and Small-cap stocks. According to him, Small-cap and Mid-cap can do well in a stable rule region, a good growth backdrop, etc. Staying away is the rule to save your assets with slow growth.

Commodity Prices

  • He states that currently, they are looking at uses of a commodity with pricing power. And ASK is investing at businesses that benefit from the softness in commodity prices. Soft economy offers improvement in gross margins even if f sales increase is in a small amount leading to PBT increases.

  • In durables, FMCG has shown improvement in gross margins and small sales increase. ASK is staying invested with them for the time being.

The PSU Theme:

  • He states, ASK want to stick to businesses that can compound earnings over a long period of time and increase valuation gradually. So PSU is not on cards currently, but yes it will be there sometime soon

How Hyderabad Has All Advantages to Establish Any Business And Grow:

Hyderabad is undoubtedly becoming the startup capital of the country where lot of factors are contributing towards the same namely

  • 1) Vision and Foresight in the Governance:
  • The political stability after the emergence of Telangana state is providing very business friendliest environment

  • 2) Infrastructural Advantages:
  • City of Hyderabad has best infrastructure compared to other cities like Bangalore along with the huge talent pool of IT, BT and R&D resources