ETMGS 2018: Dinosaurs will bite the dust in fight with disruptors
India as a theme will continue to deliver, the top guns of financial markets said at ETMGS 2018.
India as a theme will continue to deliver, considering the robust growth, rapid digitisation, support from millennials and a couple of reforms that will start pay off in coming years, the top guns of financial markets said.
Dinosaurs vs disruptors
Kotak AMC’s Nilesh Shah believes that between dinosaurs (companies with an old business model) and disruptors (those with disruptive technologies), the latter would win.
“The dinosaurs will either get eliminated or not deliver to shareholders. The disruptive technologies or other means will change the existing model,” Shah said citing the case of private banks and multiplexes that have eaten into the market share of public lenders and single-screen theatres.
Black money and financialisation
The experts said the sustained attack by Prime Minister Narendra Modi on black money has changed the equation "dramatically" for markets. Modi, they said, has successfully shifted the lever from non-financial assets to financial ones.
Despite the recent selloff in Indian equities, the assessment is domestic stocks will continue to fetch handsome returns to investors in coming years. SIP inflow is expected to double in the next 12 months. However, a couple of factors such as spike in crude oil prices, ability of the banking sector to finance projects and worries over tax reforms remain the sticking points.
Ashok Wadhwa, founder and CEO, Ambit, said, “GDP and corporate earnings are coming back. Period from 2018-2019 onwards will deliver double-digit figures.”
Prabhat Awasthi, Head of India, Nomura, added that India will become the fastest-growing economy over the next two years.
The investment pattern has gone through a paradigm shift over the years. Earlier, Indian equity markets were totally dependent on foreign institutional investors, now the scenario has changed. “If you look at the investment pattern today, dominant part is from domestic institutional investors rather than FIIs,” reasoned Wadhwa.
Financial inclusion, technology and jobs
Other speakers, including ICICI Prudential Mutual Fund's S Naren, IIFL's Nirmal Jain and Atom Technologies’ Dewang Neralla, dwelt on financial inclusion.
Jain added that millennials are getting into the formal financial sector more than ever before and the digital space is growing very rapidly "although the penetration is too low".
According to Neralla, there must be a common repository for KYC and Aadhaar could be the central point for the same.
Job losses with rapid growth of technology are always a point of concern for many. However, market experts said technology creates more jobs. “Technology will create more jobs in 5-10 years,” added Neralla.
"The financial sector is the backbone of any economy. If India has to grow faster than China and other emerging countries, then financials have to grow faster," said Jain.
Need for inclusive market
On the regulator, Raamdeo Agrawal, co-founder and Joint MD, Motilal Oswal Financial Services, suggested that Sebi should make the market more inclusive.
"Regulators are focussing more on regulatory aspects and not on development of market," said Uttam Bagri, Chairman of BSE Brokers' Forum.
Blockchain, crpytos and stock exchanges
Crypto currencies and the technology behind the same are on everybody’s mind after the meteoric rise in 2017. But of late, it has fallen from grace amid doubts over its legal sanctity and regulatory clampdown.
“From the industry perspective, we believe that the future is extremely strong for crypto currencies,” said Benson Samuel of coinsecure.in on the sidelines of the event.
“However, volumes are drying up in India and that is mainly because banks are not supporting the industry,” he pointed out.
Blockchain can possibly disrupt the stock exchanges and can be a threat to exchanges and intermediaries, said Dhiraj Relli of HDFC Securities.
Blockchain, Anders Bally of Sentifi said, can "create a whole lot of new fintech companies that we have never seen before".
The big names shared their insights on various topics ranging from growth and regulation to mutual funds, equities, artificial intelligence to fintech and crypto currencies.
Overall, more than 45 speakers took part in the event with a focus on the global trend impacting financial markets.