Kotak Sec moving out of interest rate-sensitive sectors

Kunj Bansal, Senior Vice President of PMS, Kotak Securities said that investors are not trading now and that they are long-term in the market. He has been tweaking the composition of his portfolios. He added that they buying very slowly from the current levels. He further said that they have been moving out of all the sectors that are related to interest rates.

Excerpts from CNBC-TV18's exclusive interview with Kunj Bansal: 

Q: How do you play this market for your portfolio investors? I would assume they are not a trading lot and they would be an investor lot?

A: They are certainly not a trading lot; they are an investor lot and are therefore long-term in the market. We have to be wary of the short-term trends or short-term trades which could catch one on the wrong side and we have to keep tweaking the composition of portfolios with respect to sectors and cash and investment allocations. These are the keys to managing the current market.

Q: How do you apply that principle just yet? Have you decided not to buy for longer-term investors at this point in time because you think this rally won’t last?     

A: I would broadly agree with that. We are buying very slowly from the current levels. There are times when we do not buy at all.

Q: A bit more on your sector tweaking that you were talking about. What are you moving out of and what are you moving into?

A: We have been sector tweaking for the last three-four months. We have been gradually moving out of all the sectors that were in flavour in last two years. This included capital goods, infrastructure and real estate. We have been moving out of all those sectors that are related to interest rates, mainly banking itself per se, and moving into relatively defensive sectors.

Defensive was playing out well for last two-three months but if in last two weeks even the defensives are tending to fall like the remaining last row of soldiers.