Breakthrough Ideas 2018 Sanchita Mukherji, Co Founder & Private Wealth Manager, Blue Edge

Breakthrough Ideas 2018

Sanchita Mukherji, Co Founder & Private Wealth Manager, Blue Edge

Sanchita has 16 years of experience in managing multi asset class portfolios for ultra-high net-worth individuals and wealthy families.

Prior to Blue Edge, she worked for over 9 years as a Senior Vice President (last designation) with HSBC Private Banking based in New Delhi, managing client portfolios. She also worked with Standard Chartered Bank for 2 years in Investment Advisory roles, before moving to the team formed at the inception of HSBC Private Banking Team in India. She had started her career by joining HDFC Bank as a Management Trainee from campus. She also did a short stint for a year at ICICI Capital Services before going for her Masters in Business Administration.She is a guest speaker on equity markets at ET Now and holds various workshops/panel discussions in wealth management across reputed Indian Universities and industry bodies such as FICCI, Indian School Of Business (ISB) amongst others.

 

Sanchita’s Breakthrough Ideas for 2018

Year 2017, Indian equity market has been one of the best performing asset class fuelled by both
global and domestic factors. Post sharp run in the last 6 months, the overall view turns a little
cautious on this space as valuations are above long-term averages. The risks lie in higher oil prices,
deterioration of both current account and fiscal deficits, geopolitical tensions, US Fed hikes, the
gradual end to an era of quantitative easing and the fact that an asset bubble seems to be emerging
with easy money sploshing around globally, and increased leveraged trades.
Concerns on real economic activity in India and corporate earnings growth have to play catch up
here, as the effects of demonetisation, GST implementation coupled with rationalisation of GST
Rates in over 200 items and the NPA situation in the banks are being aggressively addressed by the
government leading to better recent credit offtake numbers. The Indian Economy should be in
better shape due to initiatives such as Bharat Mala and the government removing many bottlenecks
for other stuck infrastructure projects. Both these initiatives should lead to growth in core areas,
mobilization of resources and creation of jobs. This should augur well for nominal earnings growth
recovery.
 
sanchita mukherji
Expensive valuations of companies with very mediocre business may be an issue here and justifying
the same as a growth stock may no longer be valid but having said that there are definite pockets of
growth in the mid and small cap segments of the market where businesses are creating new
identities and new niches for themselves be in auto ancillaries, specialised chemicals or affordable
housing, finance banks and HFCs where these niche businesses sectors did not even exist a decade
back. Such niche businesses, products, quality management, revenue generation ability can leave a
lot of scope in bottom-up stock picking and researching for newer stock ideas and based on one’s
risk return profile, investors can choose to invest in well researched flexicap diversified equity
mutual funds, PMS and AIFs which specialise in bottom up stock picking, have established fund
manager’s track record and acumen and have delivered risk adjusted returns on a consistent basis
over the longer horizon.
In debt, relatively higher real yields have drawn global investors. The 10-year sovereign
bond yields are one of the highest among major Asian markets. This means in India investors are
getting decent compensation beyond inflation protection. With the demonetisation liquidity
normalising and inflation outlook at a more sustainable 4-6%, the yields have moved higher across
various segments of the bond market. The 1-3 years corporate bond debt funds segment looks
attractive from a carry and valuation perspective. At the same time, general easy liquidity has kept
3-6 months money market yields depressed and hence steepness in 1-3year segment seems to offer
the best opportunities. Recent banking recapitalization, recovery in growth and improved corporate
profitability is improving the credit cycle thus making the corporate bond segment attractive from a
risk reward perspective. Also, Non AAA corporate bonds spreads are trading between 100-200 bps
over AAA segment, which we believe could compress on improved credit environment and offer
opportunities for investors over a period of time.
Introspection, asset-allocation across equity, fixed income, alternatives and a review of one’s
investment portfolio and investment objectives, yet once again, would be a great start for investors
in 2018.
Disclaimers: The views and statements expressed here pertain to the individual in her personal capacity. Certain information contained in
this document is compiled from third party sources. Whilst I have done my best in my endeavour to ensure that all information is accurate,
complete and up-to- date, it shall have no responsibility or liability whatsoever for the accuracy of such information or any use or reliance
thereof.

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