Aviation space not a favored sector : IL&FS

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R Sreesankar of IL&FS Investsmart says, when the market went up to a great extent all of us were concerned about the effect that huge surplus liquidity within this system was having on the markets. He further said that one needs a large amount of conviction to buy into the airline space as Jet airways and Spice Jet are not great performers at all.

Excerpts from CNBC-TV18's exclusive interview with R Sreesankar:

Q: How have you read the extreme volatility in the last few days?

A: When the market went up to a great extent all of us were concerned about the effect that huge surplus liquidity within this system was having on the markets. The surplus liquidity was good. Now, the liquidity has taken a reverse turn and we are paying for it.

I think fundamentally there is nothing wrong in the domestic economy. But the correction that we have witnessed today is a function of the global liquidity changes. I am not reading beyond those falls at all.

Q: Would you buy in the aviation space?  

A: Everything is relative right now.  We have seen from the performance of existing aviation stocks like Jet Airways , Spice Jet that they are not great performers at all. One needs a large amount of conviction to go and buy into the airline space.

I am not sure about this sector so I would rather keep away from it.  Globally lots of people are keeping away from that particular space and especially in environment, where the crude prices keeps increasing and there is such a serious competition between airlines.

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