There is no "merit” in trading in the markets in the immediate short term as “volatility is here to stay”, according to Vaibhav Sanghavi of Avendus, India's largest hedge fund.
“We had preempted volatility but on account of the Fed tightening further. We didn't take Russia into account,” the co-chief executive officer at Avendus Capital Public Markets Alternate Strategies, told BloombergQuint's Niraj Shah in an interview.
Volatility, he said, will continue in March too, but not [just] on account of Russia and Ukraine. “Uttar Pradesh election results, LIC IPO and the mid-March Fed meeting—all three events may have an impact on the markets via liquidity or valuations. After that, we may see stabilisation.”
That's keeping the fund—managing $800-million assets—from deploying more cash. "Not a compulsion for us to be deployed always. When we're comfortable around the variables ... when we see stability, we will deploy."
Avendus is watching global volatility and oil prices. “Volatility is at 30-35%. If that goes down to 20%, we can have reasonable confidence of getting back into the markets,” Sanghavi said.
If the Nifty 50 were to fall to 15,000-15,500 levels, then Avendus would “seriously look” at investing irrespective of the variables mentioned above, he said.
Watch the full interview here:
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