Reliance’s Signhania Prediction of MF Industry; Sees Rise in Financial Savings

Sunil Singhania, CIO-Equity, Investment at Reliance Mutual Fund feels this is a good time for the mutual fund industry. Growth in mutual fund industry will be healthy & robust.

Majority of analysts feel the markets are currently highly valued, especially after 18 percent rally since the beginning of 2017. Earnings have to recover and economic growth has to be over 7 percent in current financial year (given expectations of normal monsoon) to match current market valuations, according to them.

According to Singhania, the markets are never fairly valued, whether it’s undervalued or mildly overvalued.

“We have had corrections in recent past but it hasn’t been that long. Inflows from retail investors in mutual fund will continue despite market correction,” he said.

He sees decent growth in financial savings going forward. Financial savings is a multi-year theme, he believes. Hence he is positive on wealth management and insurance companies.

Singhania said getting back to 20-30 percent growth rate would be tough for pharma companies as competition has increased in the US for pharma companies but mid-teen profit growth is possible for pharma companies.

So far in current calendar year, the pharma sector underperformed the market as the Nifty Pharma index fell 6.5 percent while Nifty50 surged 18 percent.

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