Stay invested for the long-term

A post graduate in civil engineering and an MBA in finance from the University of Pittsburgh (USA), Rahul Agarwal, director of Wealth Discovery, has a penchant for numbers. He is responsible for keeping the company in sync with the latest development in technology pertaining to the Financial Services Industry. A thorough technocrat in his own rights, Agarwal has brought with him more than 12 years of international experience into his company, having led many multi-ethnic teams that worked on multi-billion dollar projects.

Agarwal, who heads new initiatives at Wealth Discovery and is tasked with steering Wealth Discovery into new product domains, thinks that after bank recapitalisation, both public sector and private banks should do well. The RBI has been very aggressive in forcing both PSBs and private banks in realisation of non-performing assets (NPAs). This helps the effective cleaning of balance sheets and removes the uncertainty overhang, he said. Private banks are more professionally managed and do react to market conditions with alacrity. Given the size of the Indian economy, both PSBs and private banks have enough room to contribute to the credit growth cycle that the economy needs, he believes.

Extremely passionate about ‘value investing and algorithmic trading, Agarwal believes the market is unlikely to break out in a hurry and sectors which did well so far could under-perform in the next one year, while the beaten-down sectors such as PSU bank, metals and industrials will remain in demand in the next six-nine months. “After recapitalisation, both PSB and private banks look especially good to us followed by cements and steel, as we see them as a direct beneficiary of major infrastructural push by the government.”

He has some worries at this point in time as well. He feels that the rising crude prices, strengthening of the dollar and rising commodity prices could put inflationary pressure on the Indian economy, reducing thereby, any chances of further lowering of interest rates. The fiscal deficit targets that the Narendra Modi government has in mind could also come under stress, thereby impacting the overall market sentiments, he believes.