Ace investor Rakesh Jhunjhunwala expects a fresh bull market despite the ongoing economic slowdown caused by the coronavirus pandemic. The big bull is pinning his hopes on a series of reforms such as RERA, GST and IBC, whose benefits will start reflecting in the economy now.
"The typical conditions for the birth of a bull market are here: you have a changed country, you have a deep fall in growth and everybody is perplexed by the rise of stocks,"said Jhunjhunwala during an interaction with NDTV.
Sensex and Nifty have climbed over 50 per cent from their March lows despite growth entering negative territory as all economic activities came to a halt during coronavirus pandemic. June quarter GDP growth crashed to a multi-decade low at - 24 per cent.
"The market is looking into the future," Jhunjhunwala said referring to the recent recovery in Indian market. "The drop in interest rates is also one of the reasons for the bullishness in stocks," he said.
Jhunjhunwala said revival in the realty sector was imminent, after which it has been in shambles ever since the Modi government announced demonetisation to curb flow of black money in the economy.
"The real estate sector has bottomed out and is showing early signs of picking up," he said.
The BSE Realty index has climbed 35 per cent in FY21 so far, with Sobha Ltd gaining the most at 74 per cent, followed by Godrej Properties (up 53 per cent), Indiabulls Real Estate (up 52 per cent) and Sunteck Realty (up 40 per cent). Other index components too have risen over 20 per cent.
Jhunjhunwala said he was bullish on infrastructure, pharmaceutical, technology and IT in equity and on gold in commodities.
"There is a digital revolution going on around the world and India is in better placed to tap the opportunity," he said.
Listing out a series of reforms India should aim at, Jhunjhunwala said steps should be taken for improving ease of doing business though land and labour reforms. He also advocated selling of public sector enterprises.
The ace investor said India's GST collections should grow at 2-3 per cent annually. "It will take some time. In other nations, it took six years for GST to stabilise," he said.