Equities to be bullish this year in Ahmedabad

Elections, new government and new policies would dictate the valuation of all investment avenues in Vikram Samvat 2070. Equity markets, depending on scrip to scrip, are expected to post maximum returns next year.

Bullion, known to be a good hedge against risk, may remain stable while silver may touch a new bottom this year. After seeing two to three consecutive dull years, the real estate industry is eyeing at least a double digit growth in 2070.

Stock market experts believe benchmark indices scaled new heights by the end of Samvat 2069.

Now, small caps and mid-cap stock prices are expected to appreciate next year. On the basis of a long-term view, experts suggest that companies from sectors like infrastructure, capital goods, power, cement and others are expected to see a bull run at stock markets in Samvat 2070.

“It seems September 2013 was the worst quarter Indian Inc has seen. From here, even the mid-cap scrips will grow. Whichever government assumes office, it will have to pump in money into the dead infrastructure sector. Hence I am bullish on infrastructure, power, power equipment, road equipment and toll companies in 2070,” said Yamal Vyas, head of research at Khandwala Integrated Financial Services.

Although Sensex and Nifty may have scaled new peaks, mutual funds are still undervalued, said Sanjay Shah, managing director of Prudent Corporate Advisory Services. “We are expecting better growth in small and mid-cap companies in 2070. But investors have to be choosy and careful. So, I suggest fresh investors to route their money into equity via mutual funds,” said Shah.

Meanwhile, precious metals — gold and silver, which posted negative returns in Samvat 2069 — are likely to see a marginal single-digit growth. The prices of bullion in India depend on international rates and volatility in Indian currency. The gold price is expected to rise from the current level of $1,300 to over $1,500 an ounce. But, at the same time, Indian rupee may appreciate from the current level of 61 to around 57, which will keep gold price stable.

As of now, there is no particular reason for gold and silver prices to ride a bull in 2070, said bullion trader and analyst Girish Chokshi. “The real buying of gold has been seen in April and May 2013. Now, the next buying is expected to take place after a downward correction in prices. From the current level of Rs31,000 per 10 gm, it may slip to around Rs27,000 and then, it may scale a new peak of Rs35,000,” he said.

Similar volatility may be seen in silver next year, claimed Reena Rohit, chief manager of non-agri commodities and currencies, Angel Broking. “Silver may touch bottom of Rs45,000 per kg and go up to Rs58,500 per kg in 2070. In the previous year, investors saw the volatility in gold price from Rs32,000 to Rs26,000 and back to Rs34,000. So, the investors are cautious of buying gold at current levels,” she said.

It has been over two years since the real estate price remained unchanged in Ahmedabad. Realtors believe growth is the only option left for real estate prices from here onwards. “The real estate sector will give 18% to 24% returns in the new year,” said Suresh Patel, chairman of Credai (Gujarat).

As urbanisation was growing at a rapid pace, it would spur growth in the sector. Moreover, the market has bottomed out and developers sold properties at lowest possible rates to avoid liquidity crunch, said Patel. “Construction cost is likely to go up by 15% making new property costly. So, even if the market remains stable, the investors will get 18% appreciation on property bought today,” said Patel.