New Delhi: Dalal Street heavyweight Rakesh Jhunjhunwala has a special New Year gift for investors: he is predicting a “very very long bull run”. Also, he is placing his bets on pharma stocks, particularly companies that make complex generics.
India’s most closely tracked investor told CNBC-TV18’s Udayan Mukherjee that he is optimistic that financial and household savings will be invested in equity markets, driving the bull run.
A bull market is one where prices of the underlying securities are rising or expected to rise. In this case Jhunjhunwala, the owner of the asset management firm Rare Enterprises, is referring to the Indian stock market.
“I would say the worst is behind us. The rebound will depend a lot on the individual companies,” he said on CNBC TV 18.
“Amazon is going to sell medicines. I think it is very positive because Indian pharma will have one more buyer. The more the buyers, the better it is. Second, at these rates a lot of companies will dropout for investment into generics and the real money should be made in complex generics,” he added.
Although Jhunjhunwala declined to name individual stocks, he said that Indian equity would give returns of 15%.
“I have been shouting that Indian money into the markets is going to come, it is going to be a flood, it is going to be a tsunami. It has not even reached a flood because to my common sense in a growing economy like India with reasonably good corporate governance practices, tax free, I think India will grow nominal gross domestic product (GDP) at 12 percent. I see no way that Indian equity will not give you a return of 15 percent.”
Jhunjhunwala also said he is bullish on metal and steel stocks. “If China keeps cutting capacity and the fact is that world growth is expected to be much better this year and more better next year, consumption of commodities can go up. So there you cannot have these kind of price increases without some shortage being there,” the billionaire investor said.