- 4/7/2025
Indian markets plunged sharply, with Sensex down nearly 4,000 points and Nifty below 21,750, amid global recession fears. Foreign outflows, sector-wide losses, and wealth erosion marked a turbulent start to the week.
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NewsTranscript
00:00Good evening and welcome. You're watching the NewsTrack. I'm Rahul Kamal. It was Manic
00:05Monday on the markets. Are the exchanges now near their near-term bottom? What can happen
00:12from here? Should you buy on the dip? How should you be handling your investments and
00:17your portfolio? Three super sharp money managers will be joining me for a special discussion
00:23on the NewsTrack.
00:54Trump calls it a bitter medicine.
01:02What's going to happen with the market, I can't tell you. But I can tell you, our country
01:06has gotten a lot stronger. And eventually, it will be a country like no other. It will
01:12be the most dominant country economically in the world. I don't want anything to go
01:17down. But sometimes you have to take medicine to fix something.
01:22Trade war and recession loom.
01:25What should investors do? That is a big focus on the NewsTrack.
01:37It was Manic Monday on Dalal Street. The Indian stock market faced one of its biggest falls
01:43since June 2024. The Sensex fell nearly 4000 points while the Nifty 50 slipped below 21,750,
01:52dragging down investor confidence. The fall was triggered by fears of a recession in the
01:56United States sparked by a global trade war because of reciprocal tariffs by American
02:01President Donald Trump.
02:08It's been a day of superlatives at the stock market. Biggest sell-off since COVID.
02:16Steepest weekly decline in years. Longest losing streak in over a year.
02:23As FII's turned relentless sellers, even the DII retaining wall could not hold up.
02:32Nifty opened, gapped down, plunging up to 1160 points of 5.1%.
02:40The BSE Sensex fell nearly 4000 points before recovering later in trade.
02:48Investor wealth of a whopping 19 lakh crore rupees wiped out.
02:54All sectors were in the red. Led by metal which was down more than 8.5%.
03:02Media, IT, energy and public sector stocks were the other losers.
03:10While the root of the kiosk is the massive burden of Trump tariff across the globe,
03:15other elements have added tadka to the mix.
03:19China rattled world market by retaliating with its own 34% tariffs.
03:24Beijing's stance that it will not fold under pressure has sparked concern of an all-out global trade war.
03:32The trade war is also expected to drive up inflation, shrink corporate profit
03:36and hit consumer sentiment. There could be a delay in rate cuts
03:42and in the worst case scenario lead to global recession.
03:47Every major stock market around the world was deep in the red on Monday,
03:52especially after Trump's comment on bitter medicine.
03:57I don't want anything to go down, but sometimes you have to take medicine to fix something.
04:03Meanwhile in India, FBIs turned net sellers again in April
04:08after turning buyers in the cash segment last month.
04:12Till Friday, FBIs had sold off Indian equities worth 13,730 crore rupees.
04:19What has added to the concerns is that Nasdaq officially entering bear territory on Friday,
04:26falling more than 20% from its recent peak.
04:30This sell-off in the market has hit retail investors,
04:34but it has also wiped out a considerable fortune of India's richest.
04:40According to Forbes, Mukesh Ambani lost $3.2 billion,
04:46Gautam Adani $3.4 billion, Savitri Jindal $2.5 billion and Shiv Nadar $1.2 billion.
04:54Meanwhile, investors now have their sights on the RBI rate decision on Wednesday
05:04and the earnings season which begins with TCS on Thursday.
05:09Bureau report, BT TV.
05:13Global financial markets continue to plummet amid fears of a trade war and economic downturn.
05:19After striking back at the US, China has slammed Trump's economic bullying.
05:25Germany too has hit out at what it calls nonsense tariffs.
05:28Here's how the world is reacting.
05:36The world is getting a taste of Trump's bitter medicine
05:40and he's showing no signs of reversing course.
05:44But there is some pushback.
05:46After striking back with a slew of countermeasures,
05:50including extra levies of 34% on all US goods,
05:54China is calling Trump's tariffs protectionist bullying.
05:59The Chinese government has made its solemn position clear regarding the US abuse of tariffs.
06:05The United States, under various pretexts,
06:08has imposed tariffs on all its trading partners including China,
06:11which severely infringes upon legitimate rights and interests of other countries,
06:16seriously violates the rules of the World Trade Organization,
06:19gravely undermines the rule-based multilateral trading system
06:24and disrupts global economic order and stability.
06:28The Chinese government strongly condemns and firmly opposes such actions.
06:32The US approach is a typical act of unilateralism, protectionism and economic bullying,
06:37which causes harm to others while backfiring on itself.
06:42Europe has reacted with a mix of criticism, economic concern
06:46and calls for unity within the European Union.
06:54Of course, we did not agree with the choice of the United States,
06:58but we are ready to deploy all the instruments, negotiations and economics
07:02needed to support our businesses and the sectors that will be penalized.
07:06Germany's economy minister was among the first European officials
07:11to voice strong criticism, labelling the US move as dangerous and counterproductive.
07:20The argument that Trump uses as the basis for his decision simply does not apply,
07:25so we shouldn't get involved in this argument at all.
07:29And this is linked to the fact that talk of reciprocal tariffs,
07:32that is such countermeasures against advantages that Europe or the world has over the USA,
07:37is simply wrong.
07:40They are preventive measures.
07:43They are isolationist measures that he has taken with serious damage to the global economy.
07:47The stock markets are already collapsing and the damage could become even greater.
07:52The US decision to raise tariffs against Europe and the rest of the world is extremely unfortunate,
07:59but the EU stands united right now.
08:02We are in favour of a negotiated solution,
08:06but of course stands ready for countermeasures that are well targeted.
08:10Voices of discontent are also growing louder within the United States.
08:16Billionaire fund manager Bill Ackman, who endorsed Donald Trump's run for president,
08:21said the US leader was losing the confidence of business leaders and should pause his trade war.
08:29Elon Musk himself is pushing for zero tariff zone between US and EU.
08:52Goldman Sachs has raised the odds of a US recession to 45% from 35%.
09:00The second time it has increased its forecast in a week.
09:04Amid a growing chorus of such predictions by investment banks due to an escalating trade war.
09:10At least seven top investment banks have raised their recession risk forecasts.
09:15With JP Morgan putting the odds of a US and global recession at 60%.
09:21On fears that the tariffs will not only ignite US inflation,
09:26but also spark retaliatory measures from other countries.
09:30Bureau report India Today.
09:46How should investors really be looking at the bloodbath in the markets?
09:51And what can stop this contagion?
09:54What can now lead to a turnaround?
09:56To talk about this, I'm joined by three super sharp money managers.
10:00I want to introduce first Devina Mehra, founder and chairman and managing director at First Global.
10:05I have Sameer Arora, founder and group CIO, fund manager at Helio Strategic Fund from Singapore.
10:10I have Radhika Gupta, managing director and chief executive at Edelweiss Mutual Funds.
10:15Thank you so much for taking our time.
10:17I'm glad at the end of this battering day, you're all still smiling or at least trying to smile.
10:21So thank you. Appreciate your time.
10:23Devina, I want to start by asking you the most important question in the lens of people who are watching at this time.
10:30How bad is this contagion likely to go from here?
10:35Do you think the worst is now behind us or are you anxious that the worst could still be in front of us?
10:42Nobody knows where the exact bottom is.
10:45I heard somebody say that if the news remains not positive, how can markets do well?
10:52I said at the beginning of 2020, I had told you that there's going to be a one in a century pandemic that will kill over 7 million people.
11:00There will be a whole year where hotels, aviation, travel, automobile industries, revenues will go to zero.
11:08Other industries also will take a big hit.
11:11How many of you would have predicted a bull run?
11:14So the markets are never that linear or simple.
11:18So my advice right now would be that whatever is your equity allocation, I never say that have 100% in equity.
11:26And if you are waiting on the sidelines, waiting for a correction, it is time to start getting in,
11:33which is not to say that there cannot be some downside.
11:37But I think the risk reward in terms of the percentage, the markets can go up versus how much they can go down.
11:44The risk is in your favor.
11:46The risk reward is in your favor.
11:48And also remember, everybody understands the risk of being invested in the markets, which is that you can lose some money.
11:53But there's also a risk to not being invested in the markets.
11:57So over the long term, since Sensex started, 40 odd years, if you had missed out the 10 best days in the market,
12:04you would think 10 days, 40 years, it shouldn't matter much.
12:08But it takes away two thirds of your returns.
12:10So if your 100 rupees had become 75,000, you miss out the 10 best days, you're down to 25,000.
12:16Miss out the 30 best days, you are down to 7,000.
12:20So that's how drastic it is.
12:22So I would advise remaining invested, but not necessarily where you are currently invested.
12:29So stocks down 50% can still be a sell.
12:31So you have to have broadly towards a large cap steady portfolio.
12:38So don't try to make it back in the same stock, sorry, the same strategies like last year, last calendar year,
12:45a lot of people stopped large cap SIPs and put it into small cap SIPs.
12:50So never chase themes, but on a broad basis, remain invested.
12:55Sameer, I asked you this question a few weeks ago when we had a news track, which then went viral,
13:01and you had indicated as clearly as you could, that things could get worse.
13:05And they have. If I ask you the same question again, is this roughly where the bottom is?
13:11Or are things likely to get worse from here?
13:14What's your sense today?
13:16I think they are not likely to get much worse.
13:19The only thing is that this bad phase may continue.
13:21And more than India, it's all being driven by US.
13:25But I would think that if you see on Friday when the US market fell a lot,
13:31initially the futures were not down a lot.
13:33They were down about 2%.
13:35And then suddenly the China news came, and then the futures went down 4%,
13:39and ultimately the market went down 6%.
13:42So I think if there's any other country protesting, and it doesn't seem to be,
13:46EU is not saying anything after saying on the first day that we will come out with reciprocal tariffs.
13:53Reciprocal tariffs to the reciprocal tariffs on the same day at 11 p.m. EST.
13:58And we will be targeting services, US services.
14:01All that they seem to have backed off.
14:03The big three, four countries US has to do a deal with.
14:06And I think other than China, everybody else will come on the table.
14:10So I think the worst may be over.
14:11But because the uncertainty in US will remain high, because this won't get resolved in a few days.
14:17Because they will have to show a process just to show that it was not just a random victory that has been claimed.
14:25So the process will take longer.
14:27But level-wise, you may be there.
14:29And India, by the way, you call it a bloodbath.
14:31Today I'm sure every Indian investor was delighted with the fact
14:35that when every other Asian market was down 6% to 10%, 12%, 15% even, or something like that.
14:41India was down only around 3%.
14:44So not bad for today.
14:46I just want to capture what Sameer said and especially compare with what he said on the last show.
14:49He was at that time indicating that things could get a lot worse.
14:52He is now suggesting that we are roughly close to how bad things could be,
14:56even though don't expect an upswing immediately.
14:58Radhika Gupta, from where you are at,
15:00your reading of the current state of the Indian markets
15:04in terms of whether you think we are close to the bottom,
15:06or do you think given the uncertainty, it is impossible to say?
15:09I would say this.
15:11I think the environment is extremely uncertain.
15:14And while things have cooled off quite a bit,
15:18I would agree that I don't see them immediately turning around
15:21because there are twin factors.
15:23A lot of the noise has come because of global factors.
15:26And usually when you have markets like this,
15:28you can use valuations or triggers to call a bottom.
15:31But here you are rewriting the rules of international trade in some sense.
15:35And those are not going to be sorted out immediately.
15:38You've seen one set of retaliatory actions from China.
15:42You have to see how India goes back and negotiates.
15:45It's very hard. You have to see what stance the Fed takes on rates.
15:48So I think some of this will take time to sort out.
15:51The second part is that if you look at the last six quarters in India,
15:55earnings have also slowed down in India.
15:58And you're going to start to see an earnings season kick off in India
16:01from 9th of April, which is when the first IT companies,
16:04which have been in the brunt of this, also start to report.
16:08So you can see the impact of earnings.
16:10Finally, India needs global stability,
16:13some renegotiation of those tariffs, which I hope we do,
16:16but also an earnings kickback.
16:18So I think it will take time for this to come back.
16:21So if people are looking to invest, they can invest in equities,
16:24but not with the hope of an immediate rebound,
16:26which is actually what we saw five years ago with COVID.
16:29So here's what I want to focus on in the next part of the show.
16:32Can Trump turn it around?
16:34Because we've seen in this last term summit
16:36that Donald Trump really cares about how the markets are performing.
16:40And in some ways, he sees that as being indicative
16:43of how his government and his presidency is going.
16:45This time, though, he's suggesting he doesn't care as much
16:48and that some short-term pain is required for long-term gain.
16:51But this is bloodbath, and especially in the US markets too,
16:55as the situation continues to slip.
16:57Do you think Donald Trump, if he changes his mind
17:00or pulls back the tariffs a couple of notches,
17:03will that stop the bleeding?
17:04Or are we now in a cycle which has a life of its own
17:09and America is heading into recession as it does?
17:12It is likely to continue to bring global growth down.
17:15So first thing is, I don't think he will change easily.
17:18If you see his old videos, there was an article in Wall Street Journal yesterday,
17:22and which is otherwise you can see those videos on YouTube, etc.
17:25In 87 and in 88 and in 2000, he's been saying the same things
17:30that Korea and Japan are taking advantage of us and all that.
17:32And he has put too much skin in the game on this,
17:35so he cannot back off, because there'll be no other chance.
17:38If he delays it by two, three months, it cannot bring any relief
17:42other than maybe a two-day relief,
17:44because that uncertainty would just get pushed forward.
17:47But recession per se is not such a bad thing.
17:50Every recession is not like the global recession of 2008.
17:54By the way, in 2008 also, there were many attempts
17:58at the market sort of bottoming out.
17:59But every time one new bank, one new broker would go bankrupt.
18:03That's what I'm saying.
18:05These things can end if there's no further bad news.
18:08So if another country does not protest,
18:11and it doesn't look like any other countries protesting,
18:14they have to do a deal with Europe and a deal with Vietnam
18:18and a deal with Japan and India broadly and all have already accepted.
18:22And then if there's no further bad news,
18:25then it's only a matter of, okay, how much U.S. uncertainty will be there,
18:29how much you might repair some confidence in three, four months.
18:32So every recession, you know, recessions happen all the time.
18:35Bad recessions, which are of the kind of 2008.
18:38Actually, if one day before Lehman Brothers went bankrupt,
18:42if Barclays had bought it, the last 30% would have been avoided.
18:46So 60%, 50% falls are not normal.
18:49They've fallen 20%.
18:51They can fall another 5%, 7%.
18:53And India seems to be in a better spot
18:55simply because we have no exports to worry about,
18:57no imports to worry about.
18:59Our scale is too low to worry about all these things beyond a point.
19:03Sure. Siddharth Ravi, how are people in government
19:06looking at this route in the markets?
19:08Because this is of massive concern.
19:10It's a story that's been trending much more than anything else.
19:12Politics doesn't matter quite as much at this moment
19:14as the bloodbath in the markets.
19:16Well, you know, you hear mixed views, including at such times,
19:19saying that the government can't do much about the markets.
19:22When they're on the upside, people don't come and congratulate us.
19:25But, you know, the broader issue really is,
19:28how long can this continue?
19:30And I would say that a lot will depend,
19:32at least in terms of expectations,
19:34and this is a point that you touched upon,
19:36will President Trump take pause?
19:39I've been in touch with people in the US
19:42and the man behind these, Peter Navarro,
19:46he's an absolute hardliner
19:49and he has gone on record on television in the US
19:52to say nothing doing.
19:53Now, is he speaking for the president?
19:56We don't know.
19:58Elon Musk and him have also sparred.
20:00But at the centrality of this,
20:02and this is a message which I got practically like an hour back,
20:05that 50 different conversations are happening currently
20:09in the United States with different countries.
20:12And therefore, what will come of it,
20:14even the time that will take out
20:16for the results to come out,
20:18is going to be significant.
20:20So, key date to watch out for, Rahul,
20:21is April 9.
20:23That's when the bulk of these tariffs come into effect.
20:28If he takes pause,
20:30there will be some semblance.
20:32But is the Trump effect on the stock markets
20:36and that initial bonhomie,
20:38will that come back?
20:40I don't think so.
20:42Trust has been broken very, very significantly.
20:44Let's spend a moment on this
20:46because there are so many research reports
20:48which are suggesting that the probability
20:49of a recession is more than doubled
20:51from before the announcement of the status.
20:53And if that becomes almost inevitable,
20:56what impact, in your view,
20:58does that then have on global growth
21:00and as a consequence of that,
21:02on Indian sentiment?
21:04Okay. First of all, let me tell you
21:06that in markets,
21:08I mean, let me come from the market side,
21:10no team runs forever.
21:12So, no country, no asset class, no sector.
21:15And US markets have been an outperformer
21:17for fairly long,
21:19I think about a dozen years or so.
21:21And I had been watching for a while
21:23that at some point, this outperformance will end.
21:26And I think all that Trump has done
21:28has hastened the end of that outperformance.
21:31Like in our global funds and portfolios,
21:33even in the January rebalance,
21:35we went somewhat underweight.
21:37US increased, Europe increased fixed income.
21:40But I think he is,
21:44I mean, he's doing something
21:45when there was no problem to fix.
21:48US was at near record low unemployment.
21:52So, what were you trying to fix
21:54in any government policy,
21:56whether it's a tax cut or any incentive
21:59or demonetization that we did?
22:01You have to look at what are you trying to achieve.
22:03And here, I don't see what he was trying to achieve
22:06because there is nothing that was to be fixed.
22:09The labor market was pretty buoyant as it is.
22:12And now by doing this,
22:13you have unnecessarily given a body blow
22:18to the American economy.
22:20So, inflation expectations in the US
22:23for the medium term for about five years
22:26was already close to 4% in the middle of March.
22:30I'm sure this time the print will be even higher.
22:33So, you are getting into a situation
22:35where inflation expectations are soaring,
22:37which makes it difficult for the Fed to cut rates.
22:43And then you are putting the brakes on growth,
22:46which are not good things.
22:48I mean, I was looking at Farid Zakaria's talk
22:52and he was talking about that,
22:54how in 30 years ago or rather in 1990,
22:57the EU and US were almost the same size.
23:01And today, US is about 80% larger.
23:04So, you didn't have a problem
23:06and you are creating a problem.
23:08And yes, I mean, I agree with Sameer
23:10that our external exposure is limited
23:13and if India really wants to
23:15just close the trade deficit,
23:17it can start importing oil from the US.
23:20I mean, US is the largest producer of oil in the world,
23:23after all of crude in the world.
23:25So, I mean, our problems are not so external.
23:28And also remember that the US is not doing well.
23:30Let us say the market doesn't mean
23:32the whole world doesn't do well.
23:34Let's look at 2003 to 2007.
23:36The US was already in the doldrums
23:39post the tech crash.
23:41It still did not perform well,
23:43but in the last five years,
23:45the return was 65%.
23:47And in that same period,
23:49the emerging market index went up
23:51three and a half, four times.
23:53India went up six times.
23:55Brazil went up ten times.
23:57So, the markets can go in different directions.
23:59So, let's spend some time on that.
24:01That's the end of the US theme,
24:03not the global theme.
24:05That's a very important point you make
24:07that this could be the end of the era
24:09of American exceptionalism,
24:11but it could potentially throw up opportunities
24:13in terms of its valuations and attractiveness
24:15when it comes to getting
24:17foreign portfolio investment
24:19excited about the India story.
24:21Because earlier, given the high price earnings multiples,
24:23we were largely seeing FPI money moving out.
24:26Now, and they were going largely
24:28to American tech stocks.
24:30That exceptionalism now stands completely busted.
24:32So, could that lead to American money
24:34which had moved out,
24:36or global money which had moved out of India
24:38now coming back to India in a big way?
24:40So, I think yes.
24:41So, here are my three reasons
24:43that this looks a little bit better for India.
24:45One is Indian valuations have moderated.
24:47Look, at some point,
24:49we were 35 to 40 times on the mid-cap
24:51and small-cap indices,
24:53not cheap on the large-cap index.
24:55A 20%, 25% correction in small-caps
24:58and some in large-caps
25:00at least means that valuations
25:02have moderated meaningfully.
25:04The second is many folks have said
25:06is that relative to other parts of the world,
25:08including China,
25:09where capital flows had started,
25:11we look relatively better
25:13from a tariff point of view
25:15relative to Europe, relative to China.
25:17And if he doesn't touch IT and pharma,
25:20I think pharma, the verdict is yet to be out,
25:22then we could probably escape.
25:24The third, which is a very interesting one
25:26because we get capital from around the world again,
25:28is that one of the biggest sources of capital,
25:31institutional capital,
25:33was private credit in the US.
25:35US interest rates were at 5%.
25:37US equities had done well.
25:39Private credit is going to come off in the US.
25:41US yields have already come down
25:43a little bit structurally
25:45and equities look like
25:47they're having a tough run.
25:49So the FBI capital that India
25:51was lacking behind on
25:53perhaps might re-evaluate emerging markets
25:55and re-evaluate India.
25:57So we look more attractive
25:59relative to the US
26:01and perhaps a little more attractive
26:03relative to the rest of the world.
26:05Of course, for this,
26:07our domestic story needs to be intact.
26:09There's potential silver lining in all of this.
26:11Sameer, let's spend some time
26:13getting your thoughts on this.
26:15The way you think foreign portfolio investors
26:17are looking at India now
26:19because ultimately they can't sit
26:21on massive cash reserves.
26:23They also have to go and invest.
26:25Do you think they're likely to come to India
26:27in a big way?
26:29Actually, FBI can come simply
26:31because if you see in a US weightage
26:33in the MSCI world is something like 70%
26:35and which in the past
26:37has been around 50-55%
26:39whereas the GDP is only some 25%.
26:41So the weight will not be 25%.
26:44It will be 50-55%
26:46because bigger companies
26:48and multinationals
26:50and they have a full free float and all that.
26:52But 70% is a bit high
26:54and there was some point
26:56somewhere where it would have been too high.
26:58You could have said it last year
27:00maybe at 67%
27:02that why US weightage in the world is 70%.
27:04But at some point you need a trigger
27:06as David and I were saying.
27:07But the beauty is that
27:09if you only reduce it by 3-5%
27:11the US exposure
27:13then for the rest of the world
27:15and for China and India
27:17which may be at 1-1.5%
27:19the impact can be very high.
27:21But I now have a fear
27:23about FDI flows
27:25because you tell me
27:27that every company in the world
27:29will have to first evaluate
27:31are they going to invest in India
27:33or are they supposed to now
27:35think of investing in US
27:37which is a slowdown on the other hand.
27:39And for that the government
27:41will have to run around more.
27:43FDI I think
27:45is always easier to get
27:47if you change a few things.
27:49FDI is much longer
27:51it might be good
27:53but it's not easy to get
27:55and more work has to be done.
27:57Now every company more or less
27:59will have to evaluate
28:01whether they should put their new money
28:03in India or somewhere else
28:05or in US because there
28:07they want to build
28:09and therefore encourage
28:11for example Indian automobile companies
28:13to enhance manufacturing
28:15and suddenly you are under pressure
28:17to reduce customs duties
28:19because Tesla wants to come in
28:21or EV manufacturers want to come in
28:23at a lower duty structure.
28:25Secondly, as companies evaluate
28:27whether they want to move out of China
28:29and to what extent
28:31they are now under pressure
28:33to first invest in US
28:35and then India.
28:37You know two parts
28:39to your question.
28:41The first is make in India.
28:43This is the third term.
28:45Very clearly make in India
28:47as a slogan
28:49and actual practical reality
28:51in terms of government's trade policy
28:53has now come under a big question.
28:55We will see that being tweaked
28:57but it's not because of the United States.
28:59The realization that we need
29:01to now look ahead
29:03in a different way
29:05is already visible to us.
29:07We are in active trade negotiations
29:09and this after 10 years
29:11where we actually didn't
29:13want any negotiations.
29:15The United Kingdom deal
29:17should have been done by now.
29:19Many Diwali's ago.
29:21It's been delayed
29:23but clearly there is a sense of urgency
29:25and that's why
29:27that is the first response
29:29from the government
29:31to this evolving situation.
29:33These tariffs have come
29:35at the end of a process.
29:37A tariff led recession.
29:39A tariff led recession
29:41is fundamentally different
29:43from what happened at COVID or 2008
29:45and experts here will perhaps agree
29:47because here all the terms
29:49of trade Rahul
29:51in which you were exporting
29:53an $800 billion worth of exports
29:55is a significant number.
29:57So what can you do internally
29:59to boost consumption?
30:01So the theme that the budget
30:03spoke about Rahul
30:05deregulation,
30:07look at the furore
30:09that has erupted
30:11after that remark on start-ups
30:13where start-ups have gone on Twitter
30:15and are saying
30:17free us to do entrepreneurship.
30:19That's what will help us
30:21come out of the woods.
30:23But it's much easier said than done
30:25because the Prime Minister
30:27has been saying the government
30:29has no business being in business
30:31for a long time.
30:33Now they actually need to
30:35walk that talk.
30:37What are your thoughts
30:39on the opportunities
30:41that you see at this moment?
30:43You did suggest initially
30:45that don't get stuck
30:47with too many small caps, mid caps.
30:49Sectorally and in terms
30:51of the crisis that presents itself
30:53what are the opportunities
30:55you're seeing right now, Radhika?
30:57I think in the environment
30:59that's going to be the next one year
31:01if you're asking me
31:03to build a portfolio
31:05my theme is going to be
31:07having a blend of risk
31:09and risk-off assets.
31:11I think precious metals tend
31:13to do extremely well in this period
31:15so some component of gold
31:17and fixed income
31:19which were forgotten asset classes
31:21in the last three years
31:23should come back into the portfolio
31:25although I've always said
31:27that they should be perennial.
31:29I think from a cap point of view
31:31you have to be more flexy
31:33and multi-cap in nature
31:35just overloading yourself
31:37to the extreme end
31:39because you can't be
31:41only large cap biased.
31:43Large cap has a lot of IT
31:45so I think a flexy
31:47or multi-cap approach
31:49and I think the third thing
31:51I would really caution investors
31:53is what's happened
31:55in the last three, four years
31:57is people have thrown
31:59valuation out the window
32:01so they've bought
32:03different stocks at 100 multiples
32:05and lots of things
32:07have come their way back
32:09into the portfolio.
32:11It's very interesting
32:13that you say that
32:14because whether it's a start-up
32:16or a company that's listed
32:18in the public markets
32:20the laws of financial gravity
32:22always come back to bite
32:24and just when everybody's
32:26getting carried away
32:28they tend to forget that.
32:30Devina Mehra, what are
32:32the opportunities you see
32:34in this crisis?
32:35We've seen a lot of
32:37pharma, auto components, IT
32:39and in the last few rebalances
32:41we've added a few FMCG
32:43and all that.
32:45But wouldn't IT be
32:47very badly hit
32:49given the fact that
32:51a lot of these exports
32:53happen to the United States
32:55the IT beamers
32:57are likely to be
32:59most impacted
33:01according to most
33:02research reports.
33:03Going to cloud, going to digital
33:05and there's always an argument
33:07also to be made
33:09which the NASSCOM does make
33:11is that if you look
33:13at previous periods
33:15of demand issues
33:17in the US
33:19the companies look even harder
33:21to outside IT services
33:23to bring down costs further.
33:25That is one way of looking at it.
33:27They do support it
33:29with data.
33:31All the previous times
33:32there was a recession.
33:34So that part one can look at.
33:36I want to reframe the question
33:38so we can get a more precise answer.
33:40Forget what you've already bought.
33:42If you were building now
33:44for those who took out some cash
33:46and are now saying
33:48is this an opportunity to come in
33:50what sectorally are Devina Mehra's recommendations?
33:52As I said we are in the middle of a rebalance
33:54so I wouldn't like to pre-empt
33:56because I also don't know
33:58exactly what would come out of that.
34:00Things which we are looking at
34:02so we are just looking at
34:04whether to add something there.
34:06As I said in the last couple of rebalances
34:08some FMCG names have come back in.
34:10So those are the things we are looking at.
34:12And I always say
34:14more important what to avoid
34:16and usually of course
34:18now it's not anyway
34:20you will not see those kind of
34:22new fund offerings coming
34:24but usually I always say
34:26if you want to know
34:28where there is froth in the market
34:30look at where the thematic funds are clustered
34:32because they all come
34:34at the peak of that theme
34:36whether it was NASDAQ in 2021
34:38whether it was defense last year
34:40or small cap and all that.
34:42So be careful there
34:44and if you are still holding
34:46some things where things look frothy
34:48get out and get into a better portfolio.
34:50That is always what I say
34:52that you don't have to
34:54hold on to the same thing.
34:56You do not have to make it back
34:58in the same stock.
35:00The market has no interest
35:02in it.
35:04Interesting.
35:06Don't put any emotion
35:08behind the companies
35:10that you have invested in.
35:12Sameer, the opportunities that you see
35:14and the pitfalls you think
35:16everyone listening to you
35:18needs to avoid.
35:20So first opportunities
35:22for the government of India
35:24to now do some reforms
35:26and open sectors
35:28which had very high tariffs
35:30and do deals with China
35:32and maybe some minor approval.
35:34I know, I am saying they should.
35:36These are an opportunity to do
35:38because if you don't use the opportunity
35:40bad luck.
35:42But how is that beneficial to India?
35:44They could inundate us with cheap imports
35:46ruin our trade balance even further.
35:48How does that help us?
35:50No, you can ask for
35:52say BYD
35:54bring them into India
35:56make them invest in India
35:58give them an export commitment
36:00give them a localization.
36:02That's what I am saying.
36:04If you saw yesterday
36:06there was an article in Financial Times
36:08that literally every day
36:10there is a launch of a new EV car
36:12in China
36:14and there are some 58 companies.
36:16So let me press you on this Sameer
36:18because if that happens
36:20let's assume BYD comes into India
36:22with cheap imports
36:24or even if they start manufacturing in India
36:26what then happens to Tata Motors
36:28what happens to Mahindra
36:30like European manufacturing
36:32Tatas are in more than
36:34100 or 50 sectors
36:36so you can't say what will happen to Tata
36:38they are big enough to look after themselves
36:40because they are in every sector
36:42I am trying to understand
36:44forget one corporate group
36:46why is that beneficial to India?
36:48It is beneficial to India
36:50because once you bring these companies in
36:52and you have 50 Indian guys working there
36:54after 5 years
36:56the local auto culture
36:58in auto ecosystem for EV cars will develop
37:00otherwise you are going to be
37:02in a strategic angle
37:04so the angle is only to save one
37:06literally one company
37:08because all other companies
37:10are foreign companies
37:12you don't have to protect Maruti from anybody
37:14and you don't have to protect
37:16say a local Hyundai from anybody
37:18you are basically protecting
37:20two Indian companies
37:22and in return for that
37:24you are going to be 15 years behind
37:26what is the point
37:28if it is some strategic thing
37:30some defense thing
37:32and the owner of their solar panel
37:34is also an Indian company
37:36an Indian utility
37:38I am a little surprised
37:40that you are recommending it
37:42given the defense and strategic competition
37:44India has with China
37:46so I can see the benefit to the consumer
37:48I mean a BYD car will be cheaper
37:50but they were on the line of actual control
37:52eyeball to eyeball with us
37:54from 2020 for 5 years
37:56how can we just forget that
37:58no no no
38:00the point is
38:02for solar blocks
38:04and for EV and for solar
38:06there is no better technology available
38:08you can't buy it
38:10so the only way you can
38:12indirectly buying it
38:14is by letting them in
38:16and for example
38:18I don't know exactly
38:20but you could say that
38:22you can't have more than 10
38:24or I don't know
38:26X number of Chinese at the top
38:28so the rest have to be Indian
38:30so it comes through various ways
38:32beyond that how does it matter
38:34who owns it
38:36how does it matter
38:38literally one Indian fellow
38:40who is an NRI now
38:42and sitting in Dubai or London
38:44owns this company
38:46how does it matter beyond the point
38:48that he is an Indian citizen
38:50and here also you have a local partner
38:52you could say 70-60%
38:54foreigner that is BYD or whoever
38:5630-40% some Indian partner
38:58who will be Indian Indian
39:00so these things are
39:02it's an Indian company
39:04as far as the system is concerned
39:06but technically it can get
39:08some dividend out
39:10I don't think these are
39:12the problem in the way
39:14that Trump has acted
39:16is that now India
39:18and countries like India
39:20can't trust a supposed friend
39:22like the United States
39:24because a friend could
39:26pin you in the chin
39:28at any time
39:30and you don't know
39:32and trade policy
39:34which go hand in hand
39:36at this point of time
39:38is to not be seen
39:40playing America
39:42vis-a-vis Russia or China
39:44you cannot be non-aligned
39:46to the extent
39:48that if you see
39:50and go through the fine print
39:52of this tariff action
39:54China mainland China
39:56has been targeted
39:58and every single country
40:00which is a proxy for it
40:02their action is
40:04against China and its proxies
40:06Raul you know this subject
40:08equally well
40:09it makes sense for us
40:11for the long term
40:13to be aligned with the United States
40:15we have demonstrated
40:17flexibility and independence
40:19when it came to getting Russian oil
40:21as long as it suited our interests
40:23therefore I would say
40:25that the China question
40:27cannot be looked at
40:29only from one particular perspective
40:30it has to outweigh
40:32every other commercial
40:34So we got derailed
40:36by the strategic dimension
40:38of your China recommendation
40:40but let's come back
40:42to the rest of the opportunities
40:44that you are saying
40:46So I was saying
40:48in a big picture sense
40:50large caps are good
40:52but the problem is
40:54that in large caps
40:56other than financials
40:58the rest of the things
41:00are going down by 3%
41:02and the consumer discretionary
41:04you saw today
41:06companies like trade
41:08going down 15%
41:10so there's no real growth
41:12relative to expectations
41:14so the only thing left
41:16in a large cap is
41:18an auto nobody likes
41:20because auto is the one
41:22disrupted and subject
41:24to tariff threats
41:26and I mean in our case
41:28lowering of tariff issues
41:30is broadly a flexi cap
41:32kind of an angle
41:34rather than large cap kind of an angle
41:36So before I wrap up
41:38just out of curiosity
41:40you don't have to answer
41:42what percentage of cash
41:44are you sitting on Radhika
41:46can we start with you
41:48of your own personal investment
41:50forget what you are handling
41:52for those watching
41:54but of your own investments
41:56what percentage of cash
41:58are you sitting on
42:00flexi cap in nature
42:02Devina
42:04I'm not in cash
42:06so I mean the way we play it
42:08is that when there is uncertainty
42:10we hedge rather than go into cash
42:12most of the time
42:14it's very rare that we actually move to cash
42:16Sameer
42:18so I don't invest personally
42:20but I'm the large investor in my fund
42:22so in our global fund
42:24where we sold off everything in US
42:26we have 65% cash
42:28and in our long short fund
42:30we have 10%
42:328% cash
42:34long only India funds
42:36track where they are putting that cash
42:38that might give you some clues
42:40but interesting conversation
42:42and I think we have been able to get
42:44three different perspectives
42:46so I thank my guests
42:48it's very tough to get all three together
42:50so Devina Mehra, Radhika Gupta, Sameer Arora
42:52I'm glad that you are still smiling
42:54I know it's looking like a little bit
42:56of a forced smile
42:58but at least you are still smiling
43:00and whatever else
43:02no but the big difference is
43:04there is a post covid generation as well
43:06the younger producers in our newsroom
43:08for example
43:10who haven't seen this
43:12they are looking as if
43:14oh my god what just happened
43:16like their ship just hit the iceberg
43:18no no it's not that bad
43:20it's ok bad but not bad bad
43:22when you got as much grey hair
43:24as Sameer does
43:26you can say it's ok bad
43:28it's ok bad it's not that bad
43:30and that's the reality
43:32and financial gravity
43:34the laws of financial gravity
43:36are coming back to tell us
43:38that it's still around
43:40how bad is a bank blowing up
43:42no bank is blown up yet
43:44this too shall pass
43:46this too shall pass
43:48thank you
43:50Devina Mehra, Radhika Gupta, Sameer Arora
43:52thank you very much for joining us
43:54the WAF amendment bill
43:56may have cleared the parliament
43:58but a big legal fight looms
44:00for that, here's more
44:30there are at least 11 petitions
44:32in the top court
44:34against the WAF act
45:01within the next 2-3 years
45:03it's going to be very beneficial
45:30the bell of the house
45:32slogan hearing
45:36not everybody is happy
45:38with the WAF amendment bill
45:40it is a direct attack
45:42on the religious minorities
45:44the minorities of this country
45:46and we feel
45:48we have all the right to speak
45:50and this is an August house
45:52Union Territory, Jammu Kashmir
45:54its assembly will discuss
45:56the WAF bill
45:57you don't believe in the law
45:59who will you believe in?
46:01PDP chief Mehbooba Mufti
46:03alleged a BJP-NC collusion
46:05over the WAF act
46:07today he is roaming
46:09hand in hand
46:11with the minister
46:13who brought the black law
46:15of the WAF
46:17which ended our rights
46:19in our cemeteries
46:21he has ruined our lives
46:23but he wants to snatch us
46:25from our cemeteries
46:27he is protesting
46:29he is going for a morning walk
46:31with Mr. Farooq
46:33this is a drama
46:35it should not be done
46:37the fallout continues
46:39300 anti-WAF protesters
46:41are facing police action
46:43in Muzaffarnagar
46:45it is a wrong message
46:47to incite people
46:49to mislead people
46:51this is in the Indian law
46:53correct the wrong direction
46:55and discuss it
46:57this is wrong
46:59a BJP's Muslim leader
47:01home in Manipur
47:03was torched by an angry mob
47:05for supporting the WAF act
47:07the new law
47:09for the management of
47:11WAF property
47:13has the country
47:15clearly on the edge
47:17Bureau report, India Today
47:27for more information
47:29from all of us here
47:31bye, good night
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