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The bull market has just begun: DE’s Abhay Laijawala

Laijawala, one of the first ones off the block with a heady Sensex target after BJP’s election win, expects the index to make it to 28,000 well before the year-end.

Indian equities have been on a roll all through 2014, and even as investors look for a sell-by date for the Modi-fueled euphoria, Abhay Laijawala, MD & Head of Research, Deutsche Equities India says the good times have just begun. “This is going to be a 4-5 year bull market,” Laijawala, who plays CNBC-TV18’s Guest Editor for the day, told Latha Venkatesh and Sonia Shenoy.

Laijawala, one of the first ones off the block with a big bang Sensex target after BJP’s election win, expects the index to make it to 28,000 well before the year-end. However, investors are increasingly becoming edgy , awaiting a big crack, even as the market shows no signs of slowing down. Laijawala, while agreeing that corrections will be par for the course and also much needed from time-to-time, says the scepticism is not warranted right now.

He points the fact that apart from India, most emerging markets have seen consensus GDP downgrades. India’s gross domestic product (GDP) grew 5.7 percent on-year in the second quarter, data released last week showed, up from 4.6 percent in the previous quarter and the fastest pace since the first quarter of 2012. “We have to realize that we are looking far better than the rest of the world,” he said.

However, perhaps the biggest positive indicator is the return of domestic institutional investors. August saw positive DII flows, which was also the highest in almost two-years, says Laijawala. He also points to the fact that jobs growth has started to pick up as well. “You’re seeing a return of three confidences: 1) consumer; 2) corporate and 3) investor. These will be the biggest drivers for the market, he says.

This copy will be updated with the interview transcript shortly. Stay tuned.

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