The interim Budget 2024 is unlikely to be about any major announcement but the government could showcase what it has achieved in the past 10 years, believes Abhijit Bhave, CEO & MD of Equirus Wealth in a telephonic interview with Livemint.
He also shares his views on the sectors and fund categories that could do well in the Calendar Year 2024. About the broader market index, he asserts that there are grim chances of the repeat of the ongoing bull run of 2023.
Mr Bhave also shares the reasons as to why this is the right time to invest in long term debt securities at this time, his views on crypto as an asset class, and more.
Edited Excerpts
What are your expectations from the interim Budget 2024?
The interim Budget 2024 would be a non-event. The FM could showcase what the government has done in the past 10 years but there would be no major announcements, as they would be kept for the main budget.
But there could be some minor changes in personal taxation for the middle class, not for others.
What are the sectors/ themes which you think would surprise investors in 2024? and why?
The CY 2024 would be about large caps. As far as sectors are concerned, large cap banks would do well and the large IT firms would do well.
In the IT sector, it is the top IT firms which are likely to do well. This is because of 2-3 reasons. Interest rates are cooling off, corporate spending would go well and their order books would move up. Our view is against the standard market view.
Nifty 50 gave 20 percent return in CY 2023 while Sensex rose 18%, do you expect the bull run to continue at least until after general elections this year?
The chances are that the market would give 12 percent return. But we don’t just buy the index, we buy sectors and stocks in order to beat the index.
But whether the market gives 18-20 percent return, the chances are not high.
This is a strong decadal growth story where the economy would do well leading to higher consumption. This means companies would do well, earnings would grow. And when earnings grow, stocks grow, more people would buy stocks, thus triggering an upward spiral.
Debt mutual funds were seen as unattractive after March 2023 when indexation benefit was removed for computing tax. What are your views on debt mutual funds as an investment instrument? Have investors, now, found favour with debt schemes?
Debt is an important part of the overall portfolio. Investors who want regular returns can invest in debt funds as this is a good time. The interest rates would go down in the second half of the year and therefore, this is the time to buy debt funds for long term.
To be able to get an exposure to debt, investors can invest in hybrid funds such as balanced advantage funds.
Small & mid-caps have become overpriced. What should be the right strategy for investors who are heavily invested in these categories?
When an investment moves up, investors don’t really know as to when to book the profit since we tend to get greedy and don’t want to miss out on the rally.
However, it is the time to partially book profit in small and mid-cap, and use the proceeds to buy large caps, or perhaps debt.
What is your take on the future of cryptocurrencies as an investment class? Do you think they will get legitimacy as an asset class this year?
We don’t recommend cryptos. RBI has gone on record to say that they are negative on cryptos and we also tell investors not to invest in something you don’t understand.
Moreover, cryptos are not for the light-hearted. There are a lot of upswings and downswings. Some HNIs do invest in them on their own but we don’t recommend it. Even if cryptos have delivered massive returns in the past, the historical returns are not a guarantee to the future returns.
How is your experience of working with HNI and UHNI clients? What are the learnings from them which retail investors can apply while curating their portfolio?
HNIs are the one who have ‘been there and done that’. They have already created wealth, some are technocrats, they ask questions. Many of them are ready to take extra risk and do angel or start-up investing.
It is important to remember that in order to earn higher than 12 percent a year, one has to opt for non-traditional investing avenues.
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Published: 11 Jan 2024, 11:11 AM IST