Vallabh Bhansali, Chairman of Enam Financial, expects Q2 results to be poorer than what most people thought. �We have not faced times like this. Some of this panic can be seen as warranted and also unwarranted. These are uncertain times which we must navigate calmly and quietly.�
Here is a verbatim transcript of the exclusive interview with Vallabh Bhansali on CNBC-TV18. Also watch the accompanying video.
Q: Lowest levels of 2008 and across the length and breadth of the market there is deep sense of gloom, what is your take of how we fare during trade today?
A: Times are extraordinary and uncertain. Markets are reacting to that.
Q: Do you expect more pain on the global markets front and the way the changes on Wall Street have been impacting India?
A: Times are definitely very uncertain. We have not faced times like this. People do not have right data at this point in time to deal with. So, some of this panic can be seen as warranted and unwarranted. But there is no getting away from the uncertainty of times.
Q: Global cues aside, are there any domestic triggers that you think could help shake these markets out of morbidity?
A: Our markets are sharply down, prices are down way below indices. Therefore to think that prices will keep falling to zero is quite silly. This is not the time to sell family jewels. It is time to hold some cash so that one does not feel an emergency. What has happened in Wall Street is not due to lack of assets but it is because of lack of liquidity. So, those who do not have any liquidity must have liquidity and this is not the time to sell family jewels. These are uncertain times, which we must navigate calmly and quietly.
All central banks will want to come together because they realized that rumours can kill the markets much more than reality. As they come together, they will also have the benefit of US learning of how you can get it wrong and it is more important to be proactive rather than reactive.
So, a lot of countries and central banks which do not have the same problems as US domestic issues will want to take advantage of this situation. That is my hope. I hope it also turns out to be the right forecast.
Q: What is your outlook on the upcoming earning season? In Q1, everyone said any signs of slowdown will only be seen in Q2. This is going to be a quarter when nerves are going to get tested, what is your outlook or assessment of how corporate India is going to perform?
A: What would happen is you should not double count. If these stocks have corrected in advance of earnings or global issues, global developments looking at those earnings is hardly of any relevance. Those results may be expectedly poorer than most people thought. But the ground reality both in America and here is that economic slowdown is not really half as indicated by the stock prices.
Q: You spoke of India being in a stronger position vis-�-vis other emerging markets. In your assessment, what will it take to bring buyers back to this market place?
A: I think everywhere it is a question of leadership. The Dow held better than the markets because of proactive or responsive leadership in the US. I think that is a big lesson that we all have to hammer all the time that leadership can make opportunities out of difficulties and otherwise create difficulties. So, I sincerely hope that the central bank in India has provided this kind of leadership. I think all other aspects of economy also have the benefit of the same kind of strong, wise leadership.