Ashwini Agarwal, Co-Founder and Partner at Ashmore Investment Management believes the market is fearful concerning the rising COVID-19 circumstances and if it results in one other cycle of non-performing loans (NPLs) formation.
“One has to see how this plays out – whether COVID-19 actually takes a second crack at the formation of NPLs,” he mentioned.
“Some wobble is possible if COVID-19 cases expand to a point where migrants may not be able to come back or maybe they are willing to come back. The COVID-19 numbers especially in Maharashtra and Mumbai are worrying but the virulence this time around is much lower. So one has to see how this plays out,” he added.
He expects to see the next US bond yield and a weak US greenback.
“Both the changes depend upon what the US secretary does. Last week they issued very dovish statements but the action has to follow suit in the sense that it will continue to support the markets by buying treasury yields and treasury bonds more than what their programme is,” he mentioned.
According to him, because the economic system revives, the demand for a four-wheeler will come again fairly strongly. In phrases of demand for autos, he said, “There was a tectonic shift in favour of personal mobility at the start of COVID-19 and I think people continue to look for solutions there. In the four-wheelers market, demand has been tepid for a few years now and with interest rates being where they are, one hopes that one will see a revival. COVID-19 related buying would be probably done but what might encourage people to look at autos is the fact that the replacement cycle has become a lot longer than what it used to be. As the economy revives, my sense is demand for four-wheeler will come back quite strongly.”
He likes each common and life insurance coverage corporations.
“The enterprise outlook for each life and common insurance coverage is sort of robust, the market continues to be comparatively underpenetrated – extra underpenetrated typically and fewer underpenetrated in life. To that extent, these are nice long-term tales and by and enormous, these are nice high quality corporations,” he identified.
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