Bearish on the insurance space, optimistic about manufacturing and asset management: Sridhar Sivaram

Sridhar Sivaram

Sridhar Sivaram of Enam Holdings highlighted in a recent CNBC TV18 interview on July 6 that while the insurance sector faces a bearish outlook that could result in the loss of its tax-saving advantage, the manufacturing and asset management sectors are anticipated to experience growth.

Sivaram, Enam’s investment director, is bearish on the insurance sector but sees rewarding potential in the asset managers (in the financial savings space) and the manufacturing sector.

Sridhar is bullish on the Entire Manufacturing Space (EMS) where the stocks are growing at 30-40 percent. The investor believes that the China-plus-one sentiment is boding well for the country with global giants shifting to India for manufacturing imports. He also considers the asset management space to be strong, despite the TR and other challenges it faces. Insurance on the other hand has a potential risk of losing its tax-free benefits.

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“I know that mutual funds managers are going to the finance ministry every time saying that it is not apples to apples. You're giving insurance firms tax-free options but not to us. Hence, either mutual funds will get tax-free options or insurance will lose tax-free. So, we all know, the right answer is that insurance will eventually lose all their tax-free options” he said.

The market veteran has always abstained from investing in the insurance sector and continues to hold that stance. He believes that the insurance industry is not selling enough protection. “Protection is hardly 10 percent. You're still selling savings. So that's my big question mark,” he said.

At 12:45 pm, the Nifty Financial Services Index is trading flat at 20,254.55 on July 6. The index has delivered a 9 percent return over the past six months and a 27 percent return over the past one year.