Jyoti Vaswani neutral on infra space

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Jyoti Vaswani neutral on infra space

Jyoti Vaswani, CIO and Director Fund Management, Aviva India is neutral on infra space.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Jyoti Vaswani See what other Experts & Brokerages are saying about Power Grid Corp See messages about Power Grid Corp

Jyoti Vaswani, CIO and Director Fund Management, Aviva India is neutral on infra space.

Vaswani told CNBC-TV18, "If we can just step back to last year, it was one of the worst years for us and we had everything going wrong for India right from high inflation, high interest rates, growth tapering off, global headwinds and you had policy paralysis, you name it and you had all kinds of problems and that was clearly reflected in the market performance, given that the market was down by around 25% last year, you would expect that this year we have a positive ending and therefore there should be some good returns generated, but the way things are, I think the uncertainty across the globe is so high. The risk aversion can be high; can be low, so it becomes very difficult to predict a direction to the market."

She further added, "There is no cue in the market today, which could give direction to the market either upwards or downwards, so given that uncertainty and predicting where the markets would be and it appears that the markets will be very volatile this year, we are adopting a wait and watch approach in our strategy. What we are trying to do is still remain a slightly overweight on the defensives and have a overweight position on the sector like the pharma sector, the IT sector, the upstream oil sector and probably the telecom sector, but we are maintaining a underweight on the interest rate sensitives like the metals and the realty sector. So, we are continuing to maintain more or less a mix of defensives and having a neutral weight probably on sectors like downstream oil, banks and financial industry and even the infra space, while we are selectively looking at certain stocks, we still believe that there could be some headwinds."

"There are lot of improvements on the infra side that we have seen off late, there are lot of projects which are taking off. You have Power Grid announcing projects, you have NHAI announcing projects, you have the government stepping in and asking PSUs to complete their projects and therefore it gives lot of confidence that there is something happening on infra side and if interest rates are cut then that is ofcourse going to help the infrastructure segment."

"The balance sheets of the companies are not in such a good order and some of them atleast started to sell of their non-core businesses and deleverage their balance sheets which is again a positive. So, there are lot of positives also on the infra side which we are seeing and valuations obviously have come down to real low levels. But we are still adopting a wait and watch policy because growth in India is still a concern and therefore we would keep a neutral weight on infra sector as well. So, the positioning is going to be more or less on those lines."