What Money Managers Expect In 2007

Seven stock market experts, Ramesh Damani, Rakesh Jhunjhunwala, Sanjoy Bhattacharyya, Raamdeo Agarwal, Madhu Kela, Prashant Jain and Anoop Bhaskar, discuss the prospects for Indian stocks in the annual roundtable organised by Capitalideasonline.com.

Ramesh Damani: To start the discussion we turn to the king of the panel first – so I’ll start with you, Rakesh, as always. Well, what do you think of the market?

Rakesh Jhunjhunwala: The bullish market is not the index, it is the bullishness of the Indian economy. And as long as I don’t come to a conclusion that India’s growth is not going to accelerate or we are not going to maintain 8-9 per cent economic growth constantly – this bull market is always going to remain alive whether the index is 12,000 or 20,000. The bull market is in the Indian economy and not in the stock market.

Although you could have the economy growing but you could have very high interest rates which is a big factor in the valuation of the market. That could temporarily disturb the market.

As long as India’s economy is doing well and I see no reason why it shouldn’t – the bull market is very much alive and kicking for me.

Ramesh Damani: Sometime they say stock prices are slave to corporate profits over the long term. What is your outlook for corporate profits or the Sensex in 2007?

Rakesh Jhunjhunwala: Well, to be very frank, I don’t do too much mathematical research. I don’t say that India is going to have consistent profit growth of 25-30 per cent y-o-y.

But I do believe that you have the biggest market and the biggest opportunity for all companies is the economy. Look at any sector, everything is at such an early stage of growth.

Ramesh Damani: I now have a question for you. We have had four years of solid gains in the Sensex. Do you make it five years in a row for 2007?

Rakesh Jhunjhunwala: Well, seeing the apprehensions that people have, I don’t see any reason why it shouldn’t be. Because if you have 15 to 18 per cent earnings growth, unless P/Es dip or those earnings dip, I don’t see any reason why there should not be a positive year.

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