Market outlook 2022 by astute fund manager – Samir Arora
In coming years he is bullish on Financials, and QSR theme but not on metals, diagnostic labs and healthcare companies.
In the recent interview, Samir Arora mentioned 2021 is good for equity investors but not a blown out year because in the past 4 to 5 years equity market has not performed well, and this year has made a huge return which has made long term 5-year CAGR return to 15%.
Themes Samir Arora is bullish on
1. It was assumed that the financial sector has been under threat by Fintech startups but traditional banks are restructuring their business model and equally competing with them. He is overweighting on HDFC bank, ICICI bank and SBI.
2. If you think diagnostic labs and healthcare companies are a good pick during covid, your approach is wrong because this situation will come to an end in a couple of quarters and we can’t expect this momentum for the long term.
3. He is bullish on the QSR theme because there is an under penetration of the middle class in this segment. Stocks like Jubilant Foodworks has made a lot of money for him. He is not fascinated by under penetration in India in general because the population is 1.3 billion and people are categorized in several ways. Seeing the QSR segment, 30 to 40 lakh people are there in the denominator in the QSR category.
4. Metal companies are generally out of control for fund managers to bet on due to global conditions, it is very cyclical. Tata Steel and Hindalco are two steel companies which he holds for hedging purposes.
Overall, the Indian market in 2022 looks bright, 10% to 15% can be expected in 2022, which would be in line with long term expected return.
Samir Arora is the main founder & fund manager at Helios Capital. From 1998 to 2003, he was the Head of Asian Emerging Markets at Alliance Capital Management in Singapore (both fund management and research, covering 9 markets). In 2002, he was voted as the most astute equity investor in Singapore (rank: 1st) in a poll conducted by The Asset magazine. More recently Helios Strategic Fund has been nominated for the Best India Fund by Eurekehedge in 2006, 2007, 2008, 2010, 2011, 2013, 2015, 2016, 2018 & 2020 and has won the award four times. Helios Strategic Fund has also received the Asia Hedge Award 2018 for its long-term (five years) performance.
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