Loganadan underweight on financial sector

Ajay Loganadan, Head-Invst Advisory Group at HSBC Private Banking is underweight on financials sector.

Loganadan told CNBC-TV18, "We are still underweight the financials as a sector. I think the price erosion has been dramatic but when you look at the concerns looming be it with inflation as high as it is at 11.91%; our view is that we should continue to see monetary tightening, we could possibly see the Repo up by another 100 bps before the end of the year and possibly more tightening with CRR or to the extent another 100 bps. So that concerns with regards to the bond portfolio of the banks, the rising Non-Performing Assets (NPA) levels and net interest margins coming down. So there are some concerns on the financial sector and the banks. So that’s one sector we remain underweight on in the present conditions."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.