A lot of big blue-chip companies have taken too much of the pain and we find opportunity there, Andrew Holland, CEO, Avendus Capital Alternate, tells ET Now.
Edited excerpts:
How are you navigating through the volatility? Are we in grips of a bear market?
I do not think we are. I am a little bit more positive than I have been for many months now. Valuations in the markets are coming to levels which we think are taking into account some of the risks that we saw. So, we are more optimistic.
Developed markets have more problem, emerging markets anyway have taken it on the chin for the last kind of six to nine months and we are just doing a bit of catch up there. The developed markets could probably see valuations, particularly in the US, remain quite high. So, we might see that those markets take more of a hit in the shorter term because they are facing quite a number of headwinds and you are seeing it now in results from companies from France and in the US where margins are coming under pressure because of the tariff war that we are seeing among different nations.
Something needs to get resolved there. Otherwise, everyone is going to go back to the drawing board and think about global growth and earnings. All that will affect global markets or developed markets a little bit more than the emerging markets at the moment.
What are you telling your clients? Would you stay in the equity markets? Would you stay with mutual funds and would you think SIPs are still a big bet?
I will probably tell the clients to invest in my funds but that aside, even for the indices it has been a horrible month and not just for the week. But underneath the index, a lot more damage has been done. That is why we are optimistic because we think a lot of the big blue chip companies have taken too much of the pain and that is where the opportunity is.
In some pockets, some of the private banks have been hit quite hard. Some of the large NBFCs have been tarred with the same brush. You got to remember that foreign selling is concentrated. It is concentrated in big well known names and that has impacted pushing that stock a little bit further.
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