Sankaran Naren, chief investment officer of ICICI Prudential Asset Management Co. Ltd, talks about his calls on credit risk, market valuation and the relative attractiveness of the US markets compared with India. Edited excerpts:
In January this year, you gave a call on small- and mid-cap stocks. Do you continue with these calls?
Over the past three months, Indian equities across market capitalization have rallied. The rally in mid- and small-cap comes after years of underperformance, which started in 2018. This broad-based rally was primarily due to the steep cut in interest rates in India and, globally, coupled with the US Federal Reserve pumping trillions of dollars to improve liquidity. But we are not sure how long the liquidity will sustain, when the vaccine comes and when economic activity will normalize globally.
