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Business EconomyPosted at: Jun 6 2020 5:43PM


Retail credit expected to increase fast once economy normalises : Maheshwari

Kolkata, Jun 06 (UNI) Retail credit is expected to increase fast once economy normalises, opines Anup Maheshwari, Chief Investment Officer & Joint CEO, IIFL AMC Ltd, today.
Mr Maheshwari addressing the session on Current Scenario and Road Ahead for Capital Market predicted that it may take around three years to get the capital market in its previous position.
CII organised the first session of 9th Financial Market Conclave and the webinar was primarily focused on the recent developments in capital markets.
Today’s session was supported by LSI Financial Services Pvt Ltd, Bombay Stock Exchange-Investors' Protection Fund, UCO Bank and ANMI.
The next session would be held on June 13.
He said rural India and South India are recovering quite well from this lock down.
" Corporate balance sheet is recovering. Gold bonds have also performed well during this critical phase, " he stated.
According to him, " India is a consumer centric market and a large portion of consumer transactions has been carried out by retail credit lending. So to revive the capital market the growth of retail credit is required especially credit from unorganized sector is needed to be tapped by capital market stakeholders. "
" We are under penetrated in retail credit and there is a lot of opportunity for lenders to lend and grow in this sector, " opined Mr Maheshwari.
He said, " Volatility in markets was very high once lockdown was imposed which took everyone by surprise. Currently markets have moved up overestimating v shaped recovery on reopening of the economy however it is expected that economy will normalise in next financial year. "
'' The positives currently seen are that interest rates are headed downwards and there is ample liquidity with the banking system, " added Mr Maheshwari.
He also observed that a shift is taking place from unorganised to organised due to this crisis which will help listed companies.
According to him, " Currently valuations at 2.5 times price to book are reasonable for investment in equity markets and anyone investing with a three year view will earn decent returns. "
Kishor Shah, Chairman, CII Eastern Region Financial Market Core Committee & Managing Director, SMIFS Capital Markets Ltd, mentioned that most of the businesses have been badly affected by more than 70 days of lockdown and current quarter and even first half of the current year would be a washout for most of the businesses.
He said Stock markets crashed and created a panic bottom once lockdown was imposed in March but since valuations became attractive at that point, markets have gradually moved up.
Central banks and governments all over the world are pumping liquidity in the economies and some of this liquidity is currently moving the markets up, he added.
Now with unlocking and reopening of the economy gradually sentiments in the markets have also improved, he stated.
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