The Hindu Business Line : 10K to 14,000 rally: Investors waiting for a correction are a missed out lot

Investors who did not enter the market when the Sensex was at 10,000 points or so, waiting for the much-expected correction to happen, have missed out a lot since then, says Mr Sanjay Sinha, Head - Equity, SBI MF.

"It will pay if you just try to select stocks of good, growth-oriented companies. Paying too much attention to market cap or having an unrealistic sectoral prejudice may not always help," he notes.

The much-anticipated heavy correction in stock prices has not actually happened. How do you view this?

We did hear some sections, including a few leading ones, talk seriously about this when the market was at 10,000 points or thereabouts. That did not materialise in the way they had expected. Between then and now, more than 3,500 points have easily been added and investors' wealth has grown. In fact, we saw the Sensex touch the 14,000-points mark last week.

In this backdrop, it can be clearly said that those who had been waiting for the market to correct itself were disappointed. They did have an opportunity to enter then. And now valuations have moved up further.

But there has not been all-round participation...

Right, the large-caps have lately outperformed the rest of the categories. Among large-cap stocks, too, it is a small and select set of names that has been significantly responsible for driving the indices to new highs. This is evident from the trend that has emerged on the exchanges in recent times.

Now, whether or not the mid-cap counters, after their relatively low-key performance, will get to catch up with the bigger heavyweights is not for me to speculate on.

In which sectors are you under-weight?

We are closely keeping an eye on trends that are emerging on certain fronts. In the pharmaceuticals sector, for instance, things seem to be a bit quiet at the moment. However, there are a number of large, well-known names in the pharma space, which have in the past created considerable value for investors. There are a few other areas, which too need to be constantly watched for developments.

If the banking sector can be cited as an example, there have been a number of positive changes, driven by both regulatory action and market conditions. I am not taking specific names here but quite a few PSU players have performed well, marked by growth in their businesses.

This has helped investors change their view on banking stocks. Many of them have made fresh allocations to banking.

Your Emerging Businesses Fund had a lot of exposure to textiles, which was under-performing. How is it now stacked up?

Yes, textiles stocks did not live up to the kind of expectations that had built up around the segment. We did have some textiles stocks in the portfolio, which has been modified in recent times. The underlying theme of Emerging Businesses Fund is clear-cut: It aims to participate in the growth potential exhibited by various companies, which we feel are evolving. These may have outsourcing opportunities to tap or an export orientation to fulfil. Or they may even be distinctly competitive on the international front.

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