Gold cos due for re-rating, may see new high: DSP BlackRock
With 78% of fund investments in gold, DSP BlackRock Investment Managers feels these companies are due for re-rating. "This will help take them to new highs," says Pankaj Sharma.
April 29, 2011 / 18:52 IST
As dollar continues to weaken and crude oil prices persist to rise, gold continues to be the most preferred bet in the commodities space. The yellow metal on Friday was within sight of historic highs and is expected to head only higher from here.
With 78% of fund investments in gold, DSP BlackRock Investment Managers feels these companies are due for re-rating. "This will help take them to new highs," said Pankaj Sharma.Having seen some inflows in DSP World Gold Fund, Sharma said, "I wouldn't say money is gushing in. Because of the 2008 experience people have been a bit cautious about it but in the last few months, interest for this product has improved dramatically." (Read, in detail, how Sharma is reading the future for gold ETFs.)Justifying his "bullish" stand on the metal as an asset class, he said political uncertainties in Europe, the Middle East and Africa, and the troubles looming over currencies, gold will continue to have space in asset location. "The operating leverage is returning for gold companies like Newcrest Mining or Barrick. In fact, its not only their profit which is going up, they are also giving more dividends. We feel the PE level that companies used to enjoy prior to the crisis should be coming back," he added.Did you miss: Silver a good buy but, gold a safer bet, says Vertex Sec Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
