Pankaj Tibrewal, Kotak Mutual Fund believes that 2023 is likely to be a volatile year for both domestic and global equity markets. “We expect a more benign global economic outlook in 2023 and the outlook on inflation and its impact on monetary policy will continue to drive markets next year as well. What we are advising to investors at the moment is to maintain a neutral stance to equities and be slightly overweight on large caps and slightly underweight on mid and small caps.”
Tibrewal is of the view that the pace of rate hikes will substantially slow down from the way we saw in 2022. “Our view is that the rates can remain higher for longer as we move into the calendar year 2023 which means that all the central banks including RBI may have one or two more rate hikes but they will pause for a longer period of time and that means rates remain higher for longer.”
Sharing his outlook on IT stocks, Tirbewal says, “We are looking at IT more constructively starting 2023, stocks have corrected by 40-45% across the board and we believe that value has started emerging. We are looking at IT more constructively starting 2023, stocks have corrected by 40-45% across the board and we believe that value has started emerging. Regarding pharma, I think our approach in the sector will be very stock specific though domestic continues to do well. There still seems to be challenges on price erosion as far as US generics are concerned but some of the companies on the US side are doing well.”
Manufacturing, according to him as a theme is a multiyear theme. “A lot of pockets in this manufacturing theme are looking good. There is light engineering capital goods, precision engineering, chemicals anything to do with Europe plus one and China plus one. We believe that there are various ways to play; one is the import substitution, second is the capacity utilisation which is running at 75% across many industries, third is the export opportunity whether it be to Europe or to the globe and fourth is becoming factory to the world.”
