So, if a lot of it is going to the US markets, the Fed factor would have to be discussed. Markets were expecting aggressive rate cuts by the Fed after that unexpected 50 basis point reduction in September, but economic data from the US looking very strong. US yields have been rising on the back of this. Is that making FIIs pull out of India you think?
Anurag Singh: No, not really. So, look, Ajay sir has very well laid out the landscape as to how the money moved. I need to say two-three points around it but let me just start with the first one. If Indian investors were given a choice that they can invest into Chinese market, Japanese market or US markets without any restrictions, I am sure they will pull some money out of Indian markets and deploy globally, that is the choice we have to understand that FIIs have.
Now, in this process, they might miss out on a very long-term secular story in some countries, but they do not care about that. They have near-term metrics. If the metrics say pull out from these markets has become really above the long-term moving average on valuations, they pull out and they deploy into cheaper market as soon as there is a news-based trigger or a valuation-based trigger and I interestingly noted that you said the culprit was FIIs. I would say, let us reverse this. The culprit is DIIs.
I mean, why should they buy? I mean, if everybody has to make their own judgment on what are they buying, what is their duration and what is their long-term perspective, if somebody is selling, will never repent for taking money off the table in markets as we say. But if you are buying, will you have your own perspective? So, I think let us twist around and I would say the culpability lies more within the promoters who are selling and also the private equity selling which is like lapped up like hotcake by the Indian investors with no regards to what will happen in future.
But you cannot throw away China from this equation and right now, of course, this mutual admiration society, though it is looking a little shaky, I want to bring in China again. These stimulus measures by China, you have that on one side and you have these overstretched Indian equities on the other. So, when you make that comparison, even today, I was looking at the price to earnings ratio of the Hang Seng compared to the price to earnings of the Nifty, it does look much better than the Nifty has and we are talking about stretched valuations. So, China, is it a momentary phenomenon? Can it be written off as just something that is going to stay for the time being?
Anurag Singh: So, it is something like a growth. So, India and China in today’s scenario are like a value stock or a growth stock. What do you say about a growth stock? It might be expensive on price earning multiples, but look, the growth eventually in next 5 to 10 years will compensate for the price you are paying today. Value on the other hand, earnings growth may not be stupendous, but the price at which you are buying, you cannot go wrong.
I think at some point and that classic point where India took over China on some MSCI world index, that was the trigger when even the Chinese government took notice that, look guys, enough is enough, we cannot let our capital lose like this and China does not like losing, you understand that. And so they acted decisively. I think I would use two very famous quote, one by Jeremy Siegel here. He said that you cannot go wrong on a 9 PE and I think that was the point where China started rallying back. You cannot go wrong at that economy of $18 trillion size at a 9 PE, that was way too low. So, I think that is that value stock. It has legs to go. It should not stay at 9 PE, but it will attain its reasonable and tightened level. At least what the government has done there is said that, look guys, we are looking at it. This bothers us and we are not trying to kill capitalism here and that signal is good enough for the markets to rerate the multiples of Chinese markets. So, I think it has some room to go.