S Naren`s view on infrastructure space

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S Naren`s view on infrastructure space

S Naren, CIO Equity, ICICI Prudential shares his view on infrastructure space.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by S Naren See what other Experts & Brokerages are saying about IRB Infra See messages about IRB Infra

S Naren, CIO Equity, ICICI Prudential shares his view on infrastructure space.

Naren told CNBC-TV18, "As such we have been bullish on infrastructure for more than a year although our portfolios have been pretty conservative. The thing is that there has to be a shift away from consumption to infrastructure, this was something we believed has to happen in 2011 budget, it didn't happen, so we saw an extension of the consumption story and therefore the infrastructure sector did very badly."

He further added, "In 2012 budget we are hoping that the budget will shift towards infrastructure and move away from consumption. Most of our portfolios area geared towards an underweight consumption stance and we believe that there is no choice for the government but to push infrastructure and to push infrastructure if you need to do taxation to hurt consumption so be it. Infact yesterdays RBIs monetary policy statement is pretty clear on it that there is a need to do fiscal consolidation and push investment. Once that happens the RBI has said that there is substantial scope to do monetary easing. So, I think its very clear what we require in the budget is some form of fiscal consolidation by taxing consumption and then you will get a big trigger in the form of lower interest rates because of lower inflation. That can actually propel the market from March-April onwards, but for that we need to have a enabling global environment like what we have had."

"The good things in the global environment is you are going to have one more LTRO which is again money given to the European banks in end of February. People are again expecting numbers which can vary between 400 billion euros to 1 trillion euros. That would mean that the problem of liquidity of banks atleast in the European system will go away for quite some time."