The Economic Times daily newspaper is available online now.

    We hope it will be a good budget, says Jinesh Gopani, head – equities, Axis Mutual Fund

    Synopsis

    "As of now, we have seen that earnings growth can be in the range of 15% to 18% for the Nifty indices. However, a lot will depend on how the second half goes than the first half of this calendar year. "

    Jinesh GopaniET Online
    “The growing expectation is that the economy is growing slowly and the government will have something to revive it. So be it in the form of taking sentimental steps like abolition of long-term capital gains tax or by giving personal income tax cut to some level of salaried class to boost the economy,” says Jinesh Gopani, head-equities, Axis Mutual Fund in an interview with Avneet Kaur of ETMutualFunds.com .

    The benchmark indices, BSE Sensex and Nifty 50, are at their lifetime highs. The index containing 500 scrips, BSE 500, is also hovering at its lifetime high. Can we say the turnaround of the broader market is around the corner?
    That process is already happening as we see the economy bottoming out and showing signs of some recovery. To that extent, normally markets are 6 to 8 months ahead of the reality and this is what we are seeing. The markets are holding on to the current level and some of the stories are bouncing back again and this is because of the thinking that the economy should recover in the next three to six months.

    What can equity mutual fund investors expect from the equity market in 2020?
    Ideally, it all depends on how the economy revives and how fast it revives because that will decide the earnings growth trajectory of the market. As of now, we have seen that earnings growth can be in the range of 15% to 18% for the Nifty indices. However, a lot will depend on how the second half goes than the first half of this calendar year. Whether the economy recovers in full flow or the economy is recovering slowly but steadily or there is a significant ‘V’ shape kind of recovery if there is a big bang announcement in the budget.

    As of now, we see earnings growth to be in the range of 15 to 18%.

    Can we expect any taxation benefits from the government in the Budget 2020 to boost investments in mutual funds?
    Frankly there is news in the market, I am also seeing the same that you are also seeing. The growing expectation is that the economy is growing slowly and the government will have something to revive it. So be it in the form of taking sentimental steps like abolition of long-term capital gains tax or by giving personal income tax cut to some level of salaried class to boost the economy. But frankly it is all expectations of various participants in the market.

    What are your expectations from the upcoming budget?
    We hope it will be a good budget.

    What is your advice to equity mutual fund investors in 2020?
    Generally speaking, there is so much of volatility in the market. We always advise investors to come in through systematic investment route because that helps you not only to participate in the market but also helps you to buy on the lower level when the stocks are down due to things which are not in control of the company or the sector go bad.

    Are you expecting mid and small caps to perform better this year after a muted performance in the last two calendar years?
    I think if earnings growth comes back, then those companies will recover. If earnings growth doesn’t come for these companies, it will be difficult for them to grow.

    I believe multi cap as a strategy is what we normally like. It has the best of both worlds which is large caps which are compounders and small and mid caps which are adding alpha to the portfolio.
    The Economic Times

    Stories you might be interested in