Can go long in PSU banks for medium-term: Pramerica MF

One can go long in PSU banks for medium-term, says BP Singh of Pramerica Mutual Fund. He is bullish on the banking space, especially PSU banks, post some positive comments in the recently-concluded Gyan Sangam and expects a pick up in economy to boost the sector.

The earnings season will kick off Friday with Infosys’ results. Pramerica expects markets to be driven by earnings this month, but expects marginal disappointment on that front. Companies are expected to see MTM losses on inventory due to commodity price decline, says Singh, however he expects positive surprise from IT companies due to growth in US. He also sees FII allocation improving going forward and expects IT stocks to surprise positively till February at least.

Pramerica is averse to allocating money to companies with high leverage and expects metals stocks to be de-rated over next 12 months.

Watch accompanying video for full interview