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Last Updated : Aug 16, 2019 11:03 PM IST | Source: CNBC-TV18

Ashmore Investment prefers pharma, domestic commercial banks and select NBFCs

According to Ashwini Agarwal, there is a palpable slowdown in the economy and there is a significant fear factor.

CNBC TV18 @moneycontrolcom

The stock market is gripped by a big fear factor on the back of slowing economic growth and weak consumer demand, said Ashwini Agarwal, co-founder and partner of Ashmore Investment Management India LLP.

“We can see that in autos. Real estate has been in a funk for a couple of years, which is a significant job creator, especially for the migrant labour, and we have no tailwinds from the external sectors,” added Agarwal in an interview with CNBC-TV18.

According to him, there is a palpable slowdown in the economy and there is a significant fear factor. “The fear factor is on account of the kind of surprises that we have seen on the policy front, especially in the budget,” he said.

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He also said that we are awaiting some government action to revive economy that is witnessing a slowdown.

Speaking about NBFCs, Agarwal said, “I hope we will see the resolution to some of the large Insolvency and Bankruptcy Code (IBC) cases come through over the next month or two. In addition to that, for some of the other stressed credit in the system, whether it’s DHFL or IL&FS, if we can see some progress on that front, then that will help address some of the fears.”

About the auto sector, he said, “There is a need to improve the credit flow to NBFCs to boost auto demand. The government has already taken the first step by providing credit enhancement. It should allow most of the NBFCs to be able to get more credit from the banks.”

On the investment front, Agarwal said, “Core investment areas of interest continue to be in the area of pharmaceuticals, it continues to be in the area of domestic commercial banks; some select non-banking financial services companies are starting to look extremely attractive on valuations.”

Ashmore Investment is not sitting on significant cash currently, said Agarwal.

Source: CNBC-TV 18

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First Published on Aug 16, 2019 09:57 pm
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