Motilal Oswal: Risk appetite creeping back in market; bullish on capital goods, cement

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In an interview with Bloomberg UTV, Nitin Rakesh, CEO, Motilal Oswal AMC said risk appetite among investors is finally coming back globally.

In an interview with Bloomberg UTV, Nitin Rakesh, CEO, Motilal Oswal AMC said risk appetite among investors is finally coming back globally. He is of the view that liquidity is finally returning to the system, and market is poised in a good place at present.

Sector-wise, he is bullish on capital goods and cement stock over the next few quarters. “Furthermore, metals space is benefitting from the return of risk appetite, and PSU banks’ earnings too has been better than private sector banks,” Rakesh elaborated.

He also gave an outlook on rupee, India’s policy paralysis. Below are the key highlights:

Market outlook:

• See risk appetite coming back globally
• Liquidity returning back to system
• Markets in a good place currently

Lack of policy reforms, and widening fiscal deficit situation:

• Need to see govt reforms, expect currency to stabilize at present
• Need to see more on fiscal deficit front

Rupee movement:

• Rupee had fallen very sharply
• Expect rupee to stabilise around 50/$ level
• Interest rate cycle peaked in end-2011

Sector-wise:

• PSU banks’ earnings are not as bad as private sector banks
• Have an overweight rating on banking space
• Capital goods, cement have surprised markets
• Expect capital goods to gain strength for next few quarters
• Don't have an overweight rating on RIL
• Metals space benefiting from return of risk appetite