Investing in post pandemic world

Chandigarh: India's economy is fighting off the after-shocks of the Covid-19 pandemic and demonstrating levels of resilience and adaptation much beyond what major economies world over have shown. Enterprises across the board have built over the adrenalin of resilience to create new markets and consolidate old ones, becoming more efficient and at the same time creating fresh jobs and opportunities. India's responses to the pandemic is now a powerful case-study for managing and tackling a national and global health crisis - whether it's political, geo-political, social or economic. These developments also shine fresh light on India's prospects as a strong and sustained investment destination and market opportunity.
 
It is in this backdrop that UTI Mutual Fund hosted a virtual summit 'The Colloquium - Investing in the Post Pandemic World' to put the spotlight on India as an attractive destination for investments in the aftermath of the pandemic.
 
The key note speaker for the event was Mr.M. Damodaran, Chairperson, Excellence enablers Pvt. Ltd., Former Chairman, SEBI, UTI, IDBI and the panel consisted of Industry Veterans like Mr. Mahesh Vyas, Economist , Mr. Marc Faber, Editor & Publisher, The Gloom, Boom & Doom, Mr. Mark Mobius, Founder, Mobius Capital.
 
The veterans shared their views on the Post-Pandemic Investment Strategy.
 
Mr. Imtaiyazur Rahman, CEO, UTI Mutual Fund said, “India is expected to become one of the fastest growing economy of the world in the aftermath of Covid-19. The asset management also played a vital role in the economic growth of the country and capital market in a stable manner.  Stock market registered new heights and the mutual fund industry observed remarkable growth, in Equity and SIPs along with robust influence on Fixed Income Schemes, Mutual Fund Industry has observed the absolute growth of 156% from Feb’2016 to Feb’2021. The industry in response to covid-19 accelerated the innovations for investors to seamlessly access products and services at all times.”

Mr.M Damodaran Chairperson, Excellence enablers Pvt. Ltd., Former Chairman, SEBI, UTI, IDBI, said, “Investing in post-pandemic world, the basics haven’t changed. Investors still looks at Liquidity, Returns and Safety but Covid has induced behavioral pattern that will influence the investment philosophy.  The stereotype models have blown out, as the younger generation likes to play it safe. Today, people have investment advisors because they like to make informed decisions, advisors suggest investment options basis the aspirations, short and long term goal  of the investor and then customize your holding, which is going to be the influence in investment in the post pandemic world.”

Mr. Mahesh Vyas, Economist said, “Economic recovery has been very impressive but still incomplete because economy is still 10-15% less than what it was before Covid-19. But by December 2021, the economy will hit the mark with larger companies doing good again. However, going back to the economic rate pre-covid looks difficult.”
 
 

Dr. V. Anantha Nageshwaram, Member of EAC-PM, India, said, “Dividing the first two decade of this millennium, the first decade was about the conversions in GDP between Developed and Developing countries. The second decade was divergence of GDP which was not peculiar to India.”

Mr. Ananth Narayan, Professor International Banking and Financial Markets Experts at SPJJmr said, “From an RBI Bond Yield and Monetary Policy perspective, when it comes to Bond Yield, RBI has done a good job this year with 30 Lac Crore of borrowings across the central state and PSU borrowings. We’re looking for answers in the Monetary Policy whereas the answer lies in the economic condition of the country which has been highly uneven which does not fall on RBI.”

Mr. Mark Mobius , Partner at Mobius Capital Partners said,  “Markets look good as we enter a good economic growth. The market has moved up and that was anticipated. In early last year, March, we did have a bear market so that was a very big correction. So the bull market started there and continues to run. Commodity prices are also recovering very well. The reforms instituted by Mr. Modi has been having a positive impact on the Indian economy and that I believe will draw more investments. In India, anything related to technology and consumerism shall do very well.”

Mr. Marc Faber, Managing Director at Marc Faber Limited  said “Asia has an exceedingly bright future if it prevents interventions from other countries into future and economic development. The economy are now recovering somewhat but I doubt it will go back to the level of prosperity we had in 2018-2019 with some exceptions. “

Mr. Karan Bhagat, MD & CEO, IIFL Wealth & Asset Management said, “As governments across the world continue to follow easy monetary policy to ensure swift and strong recovery from COVID-19, we will continue moving towards this direction or there will be slightly higher interest rates for at least next 20-24 months. We won’t see ourselves getting into the situation where inflation goes out of control. I think we will end up in a period where we see much more volatility but liquidity will remain friendly.”
 
Mr. Amandeep Singh Chopra, Group President & Head – Fixed Income, UTI Mutual Fund said, “Debt markets are heading in the period of adjustment as the debt markets face the reality of lesser policy support from the central bank. The future of the debt markets will be influenced by the decision taken by the Federal Reserve and that’ll set the tone for rest of the world. I think 2020 saw the coordinated action of following strategies by lowering rates, bond purchases. In India, there has been a fair amount of continuity in terms of policies, assurance and guidance to keep the market volatility low, which is good. “
 
Mr. Amit Bivalkar, MD & CEO, Sapient Wealth Advisors & Brokers Pvt Ltd said, “Instead of looking at maintaining the fiscal deficit in the budget, the government has identified it as off budget items and pushed off the line. When this happens, a higher fiscal deficit is a reflection of past spending rather than the future spending. With the expenditure being flat on Y-O-Y basis, the fiscal impulse for growth is at the margin especially with the budget allocation leaning towards the categorical expenditure instead of the revenue expenditure. This has actually blunt the concerns of the credit rating agencies by coming out boldly through words as well as action.”
 
Mr. Vetri Subramanyam, Group President & Head – Equity, UTI Mutual Fund said, There is a significant difference between the responses for the crisis in the year 2008-09 and this year. US fiscal support to the economy is 24% to 25% of GDP whereas the forecast for GDP in India will be up by just 1% or 2%. But forecast for profits like Nifty 50, it would be higher by almost 40%. We've got the lowest ever tax rates on the corporate side, we've still got a record low interest rates, when it comes to rates either for corporates, or for individuals. And we've got a host of supply side reforms that government has rolled out in recent times, which creates a platform for growth and our macro economic stability this time around is much better, compared to 2012 2013. Just rising profit should not be the benchmark of how well the economy as a whole is doing.

Mr. Nilesh Shah, Founder & CEO, Envision Capital said, “The last one year has been one of the most interesting periods and the recovery has been stupendous in terms of liquidity infusion, central banks acted unreasonably synchronized manner, in a way provided basically the lifeline to the markets. And clearly the priority was first the markets and then the economy. Covid has encouraged the government to take up some of the harder reforms like the labour reforms, the agriculture reforms and the Union Budget and the privatization of state owned banks. The animal spirit from business were missing and to unleashing them with private entrepreneurs and companies in India in a way will revive and propel the investment cycle. The other big change is the ability of investors and businesses to take risks and in the process, Business Law becoming even more capital efficient is a significant catalyst to not just drive growth, but make businesses more capital efficient.
 
Mr. Bharat Shah, Executive Director, ASK Group said, “The country, the government, the businesses, the enterprises and the people have dealt with this sudden challenge in a fantastic way. In some sense we are thankful for a lot of important changes, which are beginning to happen in government and businesses. Where the government’s agenda for the Union Budget was very clear on infrastructure, on privatization, on asserting the worth and the value of the wealth. Next 15 – 20 years will foretell one of the finest stories that is about to meltdown, in terms of not just the rate of growth of the economy but more importantly, sustainability, solidity, predictability, and quality of the growth, these elements put together will reflect the growth of the economy into the performance of quality businesses, in turn their cash flows and profits, their stock price and the market Sensex. So we are truly at a point of time, where we are stating a couple of golden decades ahead of us.”