Which sectors is Sundaram BNP MF betting on this year?

Q: Sectorally what would you bet on for the rest of 2010, what are the favourites with Sundaram?

A: It is obvious the infrastructure, which is mainly having to do with the steel and the cements, the power structure and then the consumption, then ofcourse the financial sector. These are the main sectors we feel will be powering because infrastructure is the major theme, energy is a major theme and finance is at the back bone of all these things. So we know pretty well that these are the three sectors that are going to look good, so definitely our preference at the moment is in terms of these sectors. Consumption is a continuing story. So we still have very firm belief in consumption. We are mainly centered on these themes at the moment.

Q: You also have a fair exposure to technology, you have about 8% exposure to technology in your tax saver fund, what is your outlook on this sector because the rupee has appreciated significantly and could that mean lower profits for IT Companies?

A: This keeps moving from time to time, rupee appreciating and rupee depreciating, but I think even if the past is anything to go by it has not largely impacted the P&L of the IT companies.

Our outlook on the IT sector is still good. We feel this sector will continue to have the business it has been having all these years. We are reasonably positive on this sector as well.

Q: Are you positive on telecom, it has seen a good bit of badgering, would you be buyers at these levels?

A: Right now we are little cautious on that sector because we would like to wait and see what happens. So we are watching that and definitely take a call once we have a firm view either way.

Q: There have been new funds or new AMCs who are launching agri businesses funds, there is DWS Global Agro Business Offshore Fund that is about to open, you are an old hand at this you have a Sundaram Paribas Rural India Fund, how have the returns been, have they outperformed your other funds?

A: Rural India has done extremely well, it has performed well, it has also given dividends to its investors over short period of time that it has been around and it continues to do well. But the only thing it is a thematic fund and we believe in style integrity, so we stay tuned with in terms of the theme that the fund has offered to its investors and we are not straying away from the theme in any case.

As a fund house we have a very strong belief in the rural story. I think there is place in the sun for everyone there, it’s a huge story, but definitely we have also to believe and admit that it’s going to take a while. It is not going to happen overnight, it will take quite a bit of time for that story for that rural transformation to happen. But it’s a story that needs to happen and it’s very important because if we are talking of increasing the employability in rural areas and if all said and done if only 18% of GDP is coming from agriculture, there are about 50-55% of the people directly or indirectly involved in the rural sector. So I think we are looking at that, government is doing every bit that it can to improve the employability in that sectors, the NREGA (National Rural Employment Guarantee Act) apart, I think hardcore improvement in that sector is happening. We believe that this story will happen albeit with a little delay.