Experts are unanimous in their view that, in Samvat 2066, the stock market is likely to behave in a volatile manner.
In Samvat 2065 (the year that has just ended), the equity market outperformed all other investment areas. The big question now is, will it continue to deliver as richly in Samvat 2066 or should the investor turn his attention to other investment avenues such as bullion, fixed deposits and real estate?
Experts are unanimous in their view that, in Samvat 2066, the stock market is likely to behave in a volatile manner. They, therefore, suggest that investors will be better off if they spread their investment and put part of their money in banks’ fixed deposits and in bullion.
Samvat 2065 had started poorly for investors. Thanks to the global meltdown, the Sensex fell precipitously and continued to fall till it bottomed out at 8,160 on March 9, 2009. However, in the last quarter of the year, it began to rise again and ended Samvat 2065 at the year-high of over 17,322.
Overall, the year was good for investors in equity as the stock market had given returns of more than 100%. Both the major indices, the Sensex and the Nifty, ended the year with 103% growth.
In 2066, however, the equity market may not be as generous as it was last year. “For safe investment, I will suggest that investors put their money in banks’ fixed deposits and in bullion,” said Nilesh Kotak, analyst and CEO of Dhanvarsha Fincap.
He further said that, currently, of all the investment avenues, fixed deposits give the lowest returns. “But bank rates will increase very soon while the equity market may witness a huge correction,” he said. “Gold prices, however, will not fall by more than 10%, if they fall at all. In fact, gold prices are likely to touch new highs in Samvat 2066.”
Kotak warned that investors should not put more than 40% of their total investment in the equity market. “Investment criteria are based on need and age,” he said. “Yet I will suggest that retail investors be cautious while putting their money in the stock market.”
Real estate as an investment avenue showed good recovery in Samvat 2065. Both investors and genuine retail buyers had shown greater interest in purchasing property. Western Ahmedabad’s three areas — Bodakdev, Satellite and Prahladnagar — have emerged as the most sought after localities for purchase of residential property, say realty experts.
CEO (residential), Space Management Ltd, Hitesh Shah, said that Samvat 2066 will be better than last year for the real estate sector. “Investment in residential property will give good returns but not as high as it did in the last two samvats.”
“Markets have grown faster and now valuation is moving away from the comfort zone,” said Sanjay Shah, MD, Prudent Corporate Advisory Services Ltd. “So people looking for investment avenues should stagger their investment over next six to nine months through STP (systematic transfer plan).”
Shah said Indian equities could do well in Samvat 2066 because of low institutional ownership, strong liquidity, prospects of growth and earnings upgrade, strong corporate balance sheets and a stable political environment.
“We expect the equity market to give a return of around 15% next year,” he said “We might see the Sensex rise to 20,000 plus by next Samvat.” There is no thumb rule for asset allocation. “Much depends on the appetite for risks which differs from investor to investor,” Shah said.
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