.
Shankar Sharma of First Global said poor IIP numbers and a sell-off in metals is the beginning of a sharp correction. "Newsflows are still poor. The markets have still not bottomed out. We don't see the Sensex rising beyond 12,500 in the current move and expect a further downside in October. The Sensex could head back to 10,000 levels, and may even dip below that."
According to Sharma, markets won't re-conquer fresh highs in the next three years. "The environment in equities is likely to be tough over the next few years. The situation in the US is getting worse. The S&P 500 could dip to 600 levels. We see a 40% downside in emerging market equities."
On the rupee, he said the rupee is also not secure at current levels, and may test new lows. "Even if emerging markets stabilize, currency problems will worsen the impact."
He feels RBI's last few CRR hikes may have been excessive. On liquidity, Sharma said India had a lot of liquidity but it was sucked out by RBI. "The central bank may be slightly behind the curve in freeing liquidity. Sentiment in market has soured, so fresh liquidity may not work. The Monetary Policy may not change the course of downward trend."
Here is a verbatim transcript of the exclusive interview with Shankar Sharma on CNBC-TV18. Also watch the accompanying video.
Q: Your targets for the year got hit last week. Do you still expect lower levels from here or do you think we have hit some kind of a bottom?
A: The real problem is that while we did have a target of 10,000 at the beginning of the year, it is a target that you would be happy to get wrong rather than get right. The Sensex at 10,000 means that everybody gets hit whether it is a bull or a bear. The fact of the matter is the aggregate community of financial services get hit, the whole economy gets hit.
So, there is no great pleasure in seeing the target get achieved. That said, our view remains that – the first part of any market’s move is almost always dictated by what is just presently visible. What was visible that India was just going into a small slowdown from 9% GDP to maybe 7.5-8%, and the world was hit but not that badly hit.
Back in May or June, whilst at least our view was that one or two banks would go belly-up, there was by no means our view that there would be a mass scale decimation on Wall Street and Main Street banks like Wachovia or Washington Mutual.
So, you see when the markets go into a certain bear market territory, a new fact emerges, which can only buttress the fact that the original move of the market was correct, and it started selling off before much of the bad news was visible. Once the bad news has continually gotten worse, the markets have continued selling off.
As we stand right now, I cannot understand how the US gets out of the kind of mess it is in, or how for that matter Europe gets out of the mess it is in. Asia is getting into one slowly but surely. You have Singapore in a technical recession, you have New Zealand in recession, you have Australia in big trouble. Australia has exactly the same characteristics as the UK or the US – big property bubble. So, pretty much the same kind of venom exists there.
The UK is in deep trouble, Eurozone banking system is all shot to hell. You have banks like Deutsche et cetera still between 45 and 50 times leverage on tangible networth. Banks like Barclays that have gone and bravely bought Lehman Brothers but then on the backside they go and seek financing from the Bank of England.
I don’t see the landscape changing at all for the better. You have a country like Iceland going completely bankrupt. In the US, based on whatever we have heard a lot of problems still exist on the Lehman Brothers CDS’. So, it is all those factors.
Coming home, you have had terrible IIP numbers coming in from our own companies. You saw the metal pack sell-off today. I think that is just the beginning of a big correction downwards in metals. It started a little while back, and that is something we need to be very clear about that how can the whole world be experiencing a slowdown and steel and iron ore companies record profits.
I don’t see how the new bad news has abated. In fact if anything the world looks a lot more bleak than it did back in January. Much as I would want to see that the market has bottomed out, I don’t think that case can be made just yet.
Q: How much would you give the current pullback, given the regulatory action that you have seen in the last 48-72 hours? Can you play for a couple of thousand points more on the Sensex, or do you think that is being optimistic?
A: That is being terribly optimistic. I wouldn’t say with any degree of conviction that the market can go beyond 12,500. I think that is the absolute top. I doubt if it will get there, in this move itself, looking at the way the price action happened today.
This was on the back of a pretty strong Asia rally, and even as we speak, Europe has been holding up quite well. Despite that, India kind of decoupled strangely enough for the first time in a couple of months because India has generally been one of the relative better performers. Even though it has been down, it has been down a lot less than others say a Brazil or a Russia, in the last leg of the bear market. This was a big disconnect move. The rest of the markets were quite okay. But India sold off, and that is not again a good sign.
So, I doubt if the market can make its way beyond 12,400 or 12,500, if at all it can make its way back to even that level.
Q: Do you think in the next few weeks, the market will try and hold a bit of a range between 10,000 and 12,500 or are you seeing substantially lower than 10,000 levels even in 2008?
A: This range is a pretty weird thing. I don’t understand why people keep talking about trading ranges. Everything is a trading range from 3,000 and 21,000 would have been a trading range. So, the fact is that the markets are headed lower in our view.
My sense is October is not over yet, and October is a cruel month. In our view in September was that October would really be a cruel month. So, far that has not changed.
Our take is you will probably again go back to levels closer to 10,000 or probably a tad lower than that, because if you think about it, and view it in context, our basic broad theme this year has been to be long US equities and short emerging markets. The trade has actually worked very well, and more so if you account for the currency, where the dollar has completely decimated all other currencies including the euro, the riyal or the rupee, and the Aussie dollar, except the yen. Other than that, all other currencies have weakened markedly. So, US equities have actually outperformed significantly this year.
They are still down about 30-35% for the year while the rest of the markets are down about 55-60%, and more if you look at their own currencies.
Therefore, if you think about it, the US situation keeps getting worse. Companies like GE are in deep trouble. Obviously mainstream banks are in no good shape. Investment banks whatever are remaining are very shaky. I doubt if Warren Buffett’s USD 115 call option will ever get exercised because I doubt if Goldman Sachs would go back to USD 115 any time soon.
So, my target on the S&P 500 is probably 650 or maybe 600, which is lower than where it was in 2001. So, if you think about it, it is a good 30% away or thereabouts.
If EMs underperform then that means you are looking at about a 40% downside to general EM equities. If you just go straight by that analysis, you are looking at substantial downsides overall for the entire emerging market pack, not just India, but if you take a Brazil or Russia or a China or India or Mexico. We think that there is still pretty substantial downside merely based on the fact that we think the US is still headed lower, and US would still outperform other markets, despite being headed lower. Therefore, other markets would go down more than what the US is going down.
So, it could be a combination of two things. In absolute price terms we go down lower, or we may go down by let’s say 20% and the currency does the rest because the rupee by no means is secure at 48-49 to a dollar. I think it will take out its lows quite comfortably. So, a combination of price action and currency will mean that we will go down 30% from here in dollar terms.
Q: Last time I spoke to you, you were saying that we will go to probably 10,000 but you didn’t see the Sensex at 8,000-9,000 and that was unlikely in your eyes. Do you think the way events have unfolded; those scenarios could also turn true?
A: You can make a forecast based on what is reasonably visible. You cannot jump too far ahead of the curve. But clearly the last one month’s events, although by no means were completely unforeseeable. The fact is the ferocity of the problems, and that especially happened after the Lehman bankruptcy, with the entire freeze in the credit market globally and the liquidity squeeze back in India, which has had no problems of the kind that the west is experiencing, but our liquidity - prices seem to be pretty significant.
And just looking at price action you see the market doesn’t even hold an intraday rally. That is telling you that 10,300 or wherever we reached last week is not absolutely set in stone that it doesn’t get violated. I wish it doesn’t get violated but evidence on the ground here and globally doesn’t suggest that any lows established in the last week are inviolable.
Q: We have seen quite a bit of regulatory action in India as well. The Reserve Bank is trying to throw liquidity. May be it will cut interest rates. To what extent can that come as a relief to the stock market?
A: For one, I have been personally very critical of Dr. YV Reddy’s last few CRR hikes. That was excessive and he was just trying to go by the textbook that if you have inflation – you have to tighten and inflation will therefore come-off. I don’t think you can play everything by the textbook. Some things have to be played outside of the textbook and the fact is that our inflation problem was an imported problem and that had nothing to do with domestic demand – whether it is a crude oil or agricultural commodities. I think he went too far overboard in his desire to quell inflation and the result of that has been that lot of money got sucked out of the system through the various CRR hikes and that when you look at in a global context, every single country across the world is reeling from a credit crunch.
India had a lot of slosh in liquidity. We sucked it back. Now we are again a little bit behind the curve. We are trying to give it back. But when markets have already turned sour then these actions while they have to be done and let us face it – there is no other way out but for the RBI to let go of the tight reins, I doubt if that will mean a lot for equity markets in India as they have not mattered even for global equity markets. The Fed has been doing what it can do and probably a lot more than it can do. It is already having a pretty bad looking balance sheet on its own. The ECB has for the first time turned dovish – cut rates after many months, if not years, of staying put and every other economy that has been tightening is actually loosening now.
But equity markets are still headed lower because monetary policy is a blunt instrument. It can have a day or two to rally but that’s about it and I doubt if it changes the basic course of a downward spiral just as raising interest rates in a bull market can pause the bull market for a day or two but it doesn’t necessarily finish a bull market off.
Q: The last leg of the fall has been hastened at least for the index by two largecap names – Reliance which we spoke about last time and ICICI Bank which got in the midst of all sorts of rumour mongering. Where do you see these two heavyweights going from here?
A: In the last episode, we spoke about Reliance as being the largest threat to the market and it has been a laggard in the last couple of months. Our view on that has not changed. We think because of lower oil prices and the fact that it is very large over owned stock we think it is headed lower and will underperform the markets.
On ICICI Bank – our view on banking generally has been that banks in India were trading way too expensively for us to like them and between 2.5 and 4 or 5 times book about a year back. A lot of that valuation has contracted and ICICI Bank has gone all the way down to book value. The rumours I have no idea about what value to attach the rumours but the fact is rumours or not, the stock has sold off big time and which is not the same case for any other bank in the entire peer group whether you take private sector or the public sector banks.
The fact is that ICICI Bank has an overseas subsidiary. ICICI Bank says that it has investment grade paper in those asset books. Investment grade paper in today’s context, I would attach very little value to because AIG was double AA rated on the morning that it was seeking USD 85 billion in financing and I am sure lot of the US banks are still rated A or AA. The US itself is rated AAA which I cannot understand which credit rating agency doing proper arithmetic can rate that country as AAA?
We are not big fans of credit rating agencies and I doubt if anybody sensible would be. So, holding investment grade paper in today context may or may not lend much comfort to investors. What would lend comfort is the fact that the investment grade paper is in reality truly investment grade and we would love to get more details breakdown of those assets because like I said, lot of the world is holding investment grade paper which is really not what the paper is printed upon. Iceland was investment grade till it went bust. That tells you. I would not attach too much importance to an S&P rating or a Moody’s rating because they have all shown themselves as to be completely compromised in every sense of the word. They have been the root cause of this entire problem.
ICICI Bank has suffered. I don’t know rightly or wrongly. I have no real call on that because in banks, it is very hard to make out asset quality and such things without getting full access to the books. All I can say is that the stock looks cheap if everything is absolutely fine and the book is in absolutely fine fettle irrespective of this investment grade logic – the book is generally in good shape. We think at book value it looks attractive. But then again, I must have the caveat in there that investment grade paper means nothing in today’s context – not one bit at all.
Q: For the first six or seven-month of this bear market, a lot of people were in denial that this is indeed a bear – that it was just a bull market correction or retracement. Now those scales have fallen from people eyes but now they are asking the question – how long could this bear market be? Is it going to be another six-months and then we are done with it or is it going to be one of those two-three-year bear markets? From what you have seen in the last one-month, what's your best guess of how long this drags on?
A: Our view has been that you will not see the highs being taken out in the next three or four year’s time – definitely not for the next three-years. Even the most optimistic estimates of what the companies comprising large parts of the index will earn and what multiple you want to attach to those earnings and thereby make a projection for the Sensex, it is very hard to come up with a number that exceeds even 18,000 let alone 21,500. So, our take is that you are not going to see the markets take out their highs for another three or four years and that goes for pretty much every global market.
So let’s at least have some consolation that the whole world will suffer alongside us and which brings me back to my original point which I have always said that there is nothing known as an Indian bull market. We take the bull markets too personally that it belongs only to us. It was a large global bull market based on very easy money. Easy money came to all parts of the world outside of the US because of the weak dollar that inflated prices of various kinds of assets because INR expectations of those dollar is very low considering what they were getting back home. So it came and it fueled your capex, infrastructure, a lot of the ground level growth that you had. So, India grew because of large influxes of foreign capital.
That capital is not coming back in the same kind of intensity that we have seen largely on account of the fact that the dollar will become a very strong currency even incrementally. We see the dollar going to 1.1-1.2 against the euro which means dollar will head back to the US. So, the fact is emerging markets benefited from the weak dollar. They will now get hurt by the strong dollar. Overall three-years definitely we doubt that we will go anywhere near the highs let alone take out the highs. So, it is going to be a tough environment – make no mistake. Anybody who believes that it is going get over soon or things would come back to normalcy is not doing real analysis. I do know still very many people who are still especially hedge funds, which were net longs in the market still hoping for the best. Then you are no longer a fund manager. Then you are just a pure hopeless optimist and may god be with you.
Shankar Sharma of First Global said poor IIP numbers and a sell-off in metals is the beginning of a sharp correction. "Newsflows are still poor. The markets have still not bottomed out. We don't see the Sensex rising beyond 12,500 in the current move and expect a further downside in October. The Sensex could head back to 10,000 levels, and may even dip below that."
According to Sharma, markets won't re-conquer fresh highs in the next three years. "The environment in equities is likely to be tough over the next few years. The situation in the US is getting worse. The S&P 500 could dip to 600 levels. We see a 40% downside in emerging market equities."
On the rupee, he said the rupee is also not secure at current levels, and may test new lows. "Even if emerging markets stabilize, currency problems will worsen the impact."
He feels RBI's last few CRR hikes may have been excessive. On liquidity, Sharma said India had a lot of liquidity but it was sucked out by RBI. "The central bank may be slightly behind the curve in freeing liquidity. Sentiment in market has soured, so fresh liquidity may not work. The Monetary Policy may not change the course of downward trend."
Here is a verbatim transcript of the exclusive interview with Shankar Sharma on CNBC-TV18. Also watch the accompanying video.
Q: Your targets for the year got hit last week. Do you still expect lower levels from here or do you think we have hit some kind of a bottom?
A: The real problem is that while we did have a target of 10,000 at the beginning of the year, it is a target that you would be happy to get wrong rather than get right. The Sensex at 10,000 means that everybody gets hit whether it is a bull or a bear. The fact of the matter is the aggregate community of financial services get hit, the whole economy gets hit.
So, there is no great pleasure in seeing the target get achieved. That said, our view remains that – the first part of any market’s move is almost always dictated by what is just presently visible. What was visible that India was just going into a small slowdown from 9% GDP to maybe 7.5-8%, and the world was hit but not that badly hit.
Back in May or June, whilst at least our view was that one or two banks would go belly-up, there was by no means our view that there would be a mass scale decimation on Wall Street and Main Street banks like Wachovia or Washington Mutual.
So, you see when the markets go into a certain bear market territory, a new fact emerges, which can only buttress the fact that the original move of the market was correct, and it started selling off before much of the bad news was visible. Once the bad news has continually gotten worse, the markets have continued selling off.
As we stand right now, I cannot understand how the US gets out of the kind of mess it is in, or how for that matter Europe gets out of the mess it is in. Asia is getting into one slowly but surely. You have Singapore in a technical recession, you have New Zealand in recession, you have Australia in big trouble. Australia has exactly the same characteristics as the UK or the US – big property bubble. So, pretty much the same kind of venom exists there.
The UK is in deep trouble, Eurozone banking system is all shot to hell. You have banks like Deutsche et cetera still between 45 and 50 times leverage on tangible networth. Banks like Barclays that have gone and bravely bought Lehman Brothers but then on the backside they go and seek financing from the Bank of England.
I don’t see the landscape changing at all for the better. You have a country like Iceland going completely bankrupt. In the US, based on whatever we have heard a lot of problems still exist on the Lehman Brothers CDS’. So, it is all those factors.
Coming home, you have had terrible IIP numbers coming in from our own companies. You saw the metal pack sell-off today. I think that is just the beginning of a big correction downwards in metals. It started a little while back, and that is something we need to be very clear about that how can the whole world be experiencing a slowdown and steel and iron ore companies record profits.
I don’t see how the new bad news has abated. In fact if anything the world looks a lot more bleak than it did back in January. Much as I would want to see that the market has bottomed out, I don’t think that case can be made just yet.
Q: How much would you give the current pullback, given the regulatory action that you have seen in the last 48-72 hours? Can you play for a couple of thousand points more on the Sensex, or do you think that is being optimistic?
A: That is being terribly optimistic. I wouldn’t say with any degree of conviction that the market can go beyond 12,500. I think that is the absolute top. I doubt if it will get there, in this move itself, looking at the way the price action happened today.
This was on the back of a pretty strong Asia rally, and even as we speak, Europe has been holding up quite well. Despite that, India kind of decoupled strangely enough for the first time in a couple of months because India has generally been one of the relative better performers. Even though it has been down, it has been down a lot less than others say a Brazil or a Russia, in the last leg of the bear market. This was a big disconnect move. The rest of the markets were quite okay. But India sold off, and that is not again a good sign.
So, I doubt if the market can make its way beyond 12,400 or 12,500, if at all it can make its way back to even that level.
Q: Do you think in the next few weeks, the market will try and hold a bit of a range between 10,000 and 12,500 or are you seeing substantially lower than 10,000 levels even in 2008?
A: This range is a pretty weird thing. I don’t understand why people keep talking about trading ranges. Everything is a trading range from 3,000 and 21,000 would have been a trading range. So, the fact is that the markets are headed lower in our view.
My sense is October is not over yet, and October is a cruel month. In our view in September was that October would really be a cruel month. So, far that has not changed.
Our take is you will probably again go back to levels closer to 10,000 or probably a tad lower than that, because if you think about it, and view it in context, our basic broad theme this year has been to be long US equities and short emerging markets. The trade has actually worked very well, and more so if you account for the currency, where the dollar has completely decimated all other currencies including the euro, the riyal or the rupee, and the Aussie dollar, except the yen. Other than that, all other currencies have weakened markedly. So, US equities have actually outperformed significantly this year.
They are still down about 30-35% for the year while the rest of the markets are down about 55-60%, and more if you look at their own currencies.
Therefore, if you think about it, the US situation keeps getting worse. Companies like GE are in deep trouble. Obviously mainstream banks are in no good shape. Investment banks whatever are remaining are very shaky. I doubt if Warren Buffett’s USD 115 call option will ever get exercised because I doubt if Goldman Sachs would go back to USD 115 any time soon.
So, my target on the S&P 500 is probably 650 or maybe 600, which is lower than where it was in 2001. So, if you think about it, it is a good 30% away or thereabouts.
If EMs underperform then that means you are looking at about a 40% downside to general EM equities. If you just go straight by that analysis, you are looking at substantial downsides overall for the entire emerging market pack, not just India, but if you take a Brazil or Russia or a China or India or Mexico. We think that there is still pretty substantial downside merely based on the fact that we think the US is still headed lower, and US would still outperform other markets, despite being headed lower. Therefore, other markets would go down more than what the US is going down.
So, it could be a combination of two things. In absolute price terms we go down lower, or we may go down by let’s say 20% and the currency does the rest because the rupee by no means is secure at 48-49 to a dollar. I think it will take out its lows quite comfortably. So, a combination of price action and currency will mean that we will go down 30% from here in dollar terms.
Q: Last time I spoke to you, you were saying that we will go to probably 10,000 but you didn’t see the Sensex at 8,000-9,000 and that was unlikely in your eyes. Do you think the way events have unfolded; those scenarios could also turn true?
A: You can make a forecast based on what is reasonably visible. You cannot jump too far ahead of the curve. But clearly the last one month’s events, although by no means were completely unforeseeable. The fact is the ferocity of the problems, and that especially happened after the Lehman bankruptcy, with the entire freeze in the credit market globally and the liquidity squeeze back in India, which has had no problems of the kind that the west is experiencing, but our liquidity - prices seem to be pretty significant.
And just looking at price action you see the market doesn’t even hold an intraday rally. That is telling you that 10,300 or wherever we reached last week is not absolutely set in stone that it doesn’t get violated. I wish it doesn’t get violated but evidence on the ground here and globally doesn’t suggest that any lows established in the last week are inviolable.
Q: We have seen quite a bit of regulatory action in India as well. The Reserve Bank is trying to throw liquidity. May be it will cut interest rates. To what extent can that come as a relief to the stock market?
A: For one, I have been personally very critical of Dr. YV Reddy’s last few CRR hikes. That was excessive and he was just trying to go by the textbook that if you have inflation – you have to tighten and inflation will therefore come-off. I don’t think you can play everything by the textbook. Some things have to be played outside of the textbook and the fact is that our inflation problem was an imported problem and that had nothing to do with domestic demand – whether it is a crude oil or agricultural commodities. I think he went too far overboard in his desire to quell inflation and the result of that has been that lot of money got sucked out of the system through the various CRR hikes and that when you look at in a global context, every single country across the world is reeling from a credit crunch.
India had a lot of slosh in liquidity. We sucked it back. Now we are again a little bit behind the curve. We are trying to give it back. But when markets have already turned sour then these actions while they have to be done and let us face it – there is no other way out but for the RBI to let go of the tight reins, I doubt if that will mean a lot for equity markets in India as they have not mattered even for global equity markets. The Fed has been doing what it can do and probably a lot more than it can do. It is already having a pretty bad looking balance sheet on its own. The ECB has for the first time turned dovish – cut rates after many months, if not years, of staying put and every other economy that has been tightening is actually loosening now.
But equity markets are still headed lower because monetary policy is a blunt instrument. It can have a day or two to rally but that’s about it and I doubt if it changes the basic course of a downward spiral just as raising interest rates in a bull market can pause the bull market for a day or two but it doesn’t necessarily finish a bull market off.
Q: The last leg of the fall has been hastened at least for the index by two largecap names – Reliance which we spoke about last time and ICICI Bank which got in the midst of all sorts of rumour mongering. Where do you see these two heavyweights going from here?
A: In the last episode, we spoke about Reliance as being the largest threat to the market and it has been a laggard in the last couple of months. Our view on that has not changed. We think because of lower oil prices and the fact that it is very large over owned stock we think it is headed lower and will underperform the markets.
On ICICI Bank – our view on banking generally has been that banks in India were trading way too expensively for us to like them and between 2.5 and 4 or 5 times book about a year back. A lot of that valuation has contracted and ICICI Bank has gone all the way down to book value. The rumours I have no idea about what value to attach the rumours but the fact is rumours or not, the stock has sold off big time and which is not the same case for any other bank in the entire peer group whether you take private sector or the public sector banks.
The fact is that ICICI Bank has an overseas subsidiary. ICICI Bank says that it has investment grade paper in those asset books. Investment grade paper in today’s context, I would attach very little value to because AIG was double AA rated on the morning that it was seeking USD 85 billion in financing and I am sure lot of the US banks are still rated A or AA. The US itself is rated AAA which I cannot understand which credit rating agency doing proper arithmetic can rate that country as AAA?
We are not big fans of credit rating agencies and I doubt if anybody sensible would be. So, holding investment grade paper in today context may or may not lend much comfort to investors. What would lend comfort is the fact that the investment grade paper is in reality truly investment grade and we would love to get more details breakdown of those assets because like I said, lot of the world is holding investment grade paper which is really not what the paper is printed upon. Iceland was investment grade till it went bust. That tells you. I would not attach too much importance to an S&P rating or a Moody’s rating because they have all shown themselves as to be completely compromised in every sense of the word. They have been the root cause of this entire problem.
ICICI Bank has suffered. I don’t know rightly or wrongly. I have no real call on that because in banks, it is very hard to make out asset quality and such things without getting full access to the books. All I can say is that the stock looks cheap if everything is absolutely fine and the book is in absolutely fine fettle irrespective of this investment grade logic – the book is generally in good shape. We think at book value it looks attractive. But then again, I must have the caveat in there that investment grade paper means nothing in today’s context – not one bit at all.
Q: For the first six or seven-month of this bear market, a lot of people were in denial that this is indeed a bear – that it was just a bull market correction or retracement. Now those scales have fallen from people eyes but now they are asking the question – how long could this bear market be? Is it going to be another six-months and then we are done with it or is it going to be one of those two-three-year bear markets? From what you have seen in the last one-month, what's your best guess of how long this drags on?
A: Our view has been that you will not see the highs being taken out in the next three or four year’s time – definitely not for the next three-years. Even the most optimistic estimates of what the companies comprising large parts of the index will earn and what multiple you want to attach to those earnings and thereby make a projection for the Sensex, it is very hard to come up with a number that exceeds even 18,000 let alone 21,500. So, our take is that you are not going to see the markets take out their highs for another three or four years and that goes for pretty much every global market.
So let’s at least have some consolation that the whole world will suffer alongside us and which brings me back to my original point which I have always said that there is nothing known as an Indian bull market. We take the bull markets too personally that it belongs only to us. It was a large global bull market based on very easy money. Easy money came to all parts of the world outside of the US because of the weak dollar that inflated prices of various kinds of assets because INR expectations of those dollar is very low considering what they were getting back home. So it came and it fueled your capex, infrastructure, a lot of the ground level growth that you had. So, India grew because of large influxes of foreign capital.
That capital is not coming back in the same kind of intensity that we have seen largely on account of the fact that the dollar will become a very strong currency even incrementally. We see the dollar going to 1.1-1.2 against the euro which means dollar will head back to the US. So, the fact is emerging markets benefited from the weak dollar. They will now get hurt by the strong dollar. Overall three-years definitely we doubt that we will go anywhere near the highs let alone take out the highs. So, it is going to be a tough environment – make no mistake. Anybody who believes that it is going get over soon or things would come back to normalcy is not doing real analysis. I do know still very many people who are still especially hedge funds, which were net longs in the market still hoping for the best. Then you are no longer a fund manager. Then you are just a pure hopeless optimist and may god be with you.