Caution stock market investors! Avoid panic selling or buying of stocks amid high volatility Indian stock market benchmarks Sensex and Nifty have been reeling under pressure in the wake of the rising number of coronavirus (COVID-19) infected persons and deaths. Many countries including India, around the world have announced a lockdown in order to prevent the novel coronavirus. The 30-share index Sensex has tumbled 23 per cent so far in March while the broader Nifty50 index plunged 24 per cent from the opening levels of March 2. While Sensex and Nifty50 gained 8 per cent and 10 per cent, respectively, so far this week. Amid high volatility, investors need to be extremely cautious while making trading decisions and avoid any panic selling or buying of stocks, Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd told Surbhi Jain of Financial Express Online in an interview. Jyoti Roy further recommended investors to stick to quality stocks at this point of time. Edited excerpts: 2. What should be investors’ strategy while trading in the market?We advise investors to be extremely cautious while making trading decisions during such volatility times and avoid any panic selling or buying of stocks. We recommend investors to stick to quality stocks at this point of time. We believe FMCG and select Pharma stocks will out-perform during these tough times and investors can look into gradually buying into these sectors. 3. Which sector seems to be well-positioned from a long-term investment perspective?We believe that the current correction would provide a great opportunity to buy into quality names in the consumption space and retail focused private sector banks. We believe that these sectors will be amongst the first to bounce back. 4. Which five stocks you believe will benefit from the Coronavirus outbreak?There has been a lot of panic selling at the market but there are few companies in the pharmaceutical market that are holding up well like IPCA Laboratories Ltd. To be honest, we don’t see any particular stock that is benefitting from this outbreak; however FMCG and healthcare companies will see relative out performance during these tough times. 5. What are the top sectors to watch and avoid amid volatility?The stock market has been going through an absolute turmoil as the COVID-19 pandemic has slowed down economic activities significantly. Every day the situation is rapidly changing and there is very little that we can say with certainty at this point. But investors can keep a close watch on stocks in the FMCG, pharmaceutical, retail focused private sector banks and specialty chemicals sectors considering the current scenario. Investors can look to gradually buy into these sectors on every dip.
The Japanese pharma major is also filing a plea before the Delhi HC seeking appointment of forensic auditors to analyse transactions involving IHH, Fortis Healthcare and RHT, Singapore, as directed by the HC on October 18.
The development is likely to create legal hurdles and delay the proposed open offer as IHH had recently told FE that it could only go ahead if Sebi agreed with its legal interpretation that the SC’s September 22 order has lifted all such restraints.
IHH managing director and CEO Kelvin Loh told FE on November 9 that the company would like to go ahead with the open offer “as soon as possible” as there has already been a delay of four years. Ravi Rajagopal, chairman of Fortis Healthcare, had added that their legal counsel has advised that the company can go ahead with the open offer as the SC order has disposed of various appeals, including the suo motu contempt. “We have represented to the Sebi and the matter is with them,” Rajagopal had said.
However, legal observers told FE that the matter is not that straightforward and simple as the Delhi HC has to take the final call on the matter of open offer as well as whether a forensic audit has to be done in the share sale which was executed in 2018.
Also Read: IHH to float open offer for Fortis if Sebi concurs with our legal view: MD & CEO
Loh and Rajagopal had said the possibility that the matter may take a different turn when it comes up in Delhi HC cannot be ruled out.
IHH had in July 2018 acquired a 31% stake in Fortis Healthcare for Rs 4,000 crore through the bidding route. It had also earmarked Rs 3,000 crore to make an open offer for an additional 26% to the public shareholders as required under the law.
Daiichi has written to Sebi that the SC in its September 22 order had asked the HC to consider ordering a forensic audit into the dilution of FHL shareholding, repeated violation of undertakings and assurance by former FHL promoters — Malvinder and Shivinder Singh — and the transaction between FHL, IHH and the clandestine transfer of Rs 4,666 crore to RHT Singapore.
Daiichi is “severely prejudiced” with IHH’s clandestine attempt to subvert the status quo order directed by the SC on December 14, 2018, and September 22 with respect to the conduct of forensic audit and the pending proceedings before the HC by purportedly consulting regulatory authorities, including Sebi, on the proposed FHL-IHH transaction. It has reiterated that the FHL-IHH transaction was currently sub-judice before the HC where FHL is also a party, its solicitors, P&A Law Offices, have said in the letter.
“We further state that any such attempt by FHL and/or IHH to proceed with the FHH-IHH transaction would be in direct contravention of the HC and SC orders,” the letter sent by the law firm has stated. Daiichi Sankyo is pursuing the enforcement of Rs 3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information when they sold Ranbaxy Laboratories to it for $4.6 billion in 2008. The apex court had in 2018 put on hold the sale of Fortis Healthcare to IHH on a contempt plea filed by the Japanese drugmaker against the Singh brothers.