January 15, 2018

Uday Kotak red flag over market rally, says savings going to ‘few hundred stocks’

One of India’s top bankers and Vice-Chairman of Kotak Mahindra Bank, Uday Kotak, has raised a red flag on the surge in stocks, saying that it raises questions as to whether this poses the risk of a “bubble”. He said a lot of domestic savings were flowing to “a few hundred stocks” of firms whose governance standards fuel concern.

“While we are in the right direction, I always worry about excesses. What’s the excess which worries me? Here we have got a wonderful situation where massive amounts of savings are moving to the financial savings. Within the financial savings space, (money flows) into mutual funds, unit-linked schemes of insurance companies and directly into the equity markets. Money is coming through a broad funnel and it’s going into a narrow pipe… massive amount of Indian savers’ money is now going into a few hundred stocks. And you come back to the question of how good is the governance of these companies. The amount of money that’s going into small and mid-cap stocks is something on which we have to ask tough questions. Is there a risk of a bubble?” Kotak said in an interview.

Read more at http://indianexpress.com/article/business/banking-and-finance/uday-kotak-red-flag-over-market-rally-says-savings-going-to-few-hundred-stocks-5024854/lite/?__twitter_impression=true

No comments:

Post a Comment