The disposal income of the middle-income group is on the rise. A significant part of that incremental savings is expected to flow into AMCs and insurance. Thus, the market looks quite promising for the mutual fund industry, at least for the next five years, said Sumit Bilgaiyan, co-founder and director of Equity99, an equity research and investment advisory firm, in an interview with Ritwik Mukherjee. Bilgaiyan, known for his expertise in identifying midcap and smallcap stocks and turning them into multi-baggers in a short time, said the trend of FIs and FIIs shifting money from smallcap and midcap to largecap companies would continue for the next two-three quarters. Excerpts:
The Reserve Bank of India (RBI) has maintained neutral stance but hiked repo rate by 25 basis points. What’s your take on that?
As per our expectation, RBI has hiked repo rate by 25bps to 6.50 per cent. All members of the monetary policy committee (MPC), except Ravindra Dholakia, voted to hike the repo rate while keeping the policy stance unchanged at neutral. This step was very much anticipated due to increased yields and crude prices. MPC has upwardly revised the inflation forecast for the second half of FY19 to 4.8 per cent from 4.7 per cent, seen in the June policy. RBI expects retail inflation in the 4.7-4.8 per cent range in the second half of FY19 excluding the HRA (house rent allowance) impact with risks evenly balanced.
