In this episode of The Lead from DH Radio, Member of Prime Minister's Economic Advisory Committee and MD of Kotak Mahindra Asset Management company, Nilesh Shah tells us all about the market and more.
Excerpts:
Furquan Moharkan: Nilesh, before we on to sector-specific queries, I want to ask you a particular thing: Stock market and macros seems to be moving in two different directions, what is exactly happening?
Nilesh Shah: If you look at broad market Sensex, it is about 5-6 % below the all-time high and the GDP is likely to be 5-6% contracting. It will be first weak growth after the 1980s. So one can legitimately say that how can GDP growth and Sensex are not linked. But if you go in detail, there are multiple trends which are visible. A bulk of the Sensex and Nifty movement happened with 15 or 20 stocks. These are the companies which were able to raise capital, which had string balance sheet and where every investor wanted to move during the turmoil. So in some sense, these 15-20 stocks took the lead and moved the Nifty up. We looked at this data on 31st of July about 11,300 was the Nifty level at that point of time and these 15 stocks were trading at 4,500 Nifty, whereas the bottom 30 stocks were trading at 8,000 Nifty. So there was a very wide polarisation between companies and which is where one can see the pain of the economy is reflected in the bottom 35 stocks of Nifty whereas the index is lifted by the top 15 stocks...
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