Pvt bank growth to continue; like auto; UW on IT: BlackRock

Pvt bank growth to continue; like auto; UW on IT: BlackRock

With the foreign direct investments (FDI) reforms in 15 sectors, there will be increased capital inflow, says Dhiren Shah, Portfolio Manager, BlackRock.

As a Diwali bonanza, the Indian government came out with varuious foreign direct investments (FDI) reforms in 15 sectors, including agriculture, mining plantation, defence, broadcasting, aviation, construction, manufacturing and the private banking space. With these reforms, there will be increased capital inflow in India, says Dhiren Shah, Portfolio Manager, BlackRock. Speaking to CNBC-TV18, Shah says: “As foreign capital comes in, it will increase the efficiency of life and business environment in India.” While he is underweight on the IT sector in saying its growth story is only a thing of the past, he sees opportunity in other spaces. He is constructive on the auto industry, including two wheelers and says: “With the interest rates starting to fall, the cost of auto loans is also coming down; so we see this as a long term (growth) opportunity.” In addition, he picks private banks over public ones in the banking sector. “The private banks offer compelling enough growth, strong enough franchises that you don't need to own a public sector bank as they (private banks) continue to deliver 15-20 percent growth per year,” he adds.

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Source:Moneycontrol.com