Prefer gold companies to gold loan financers: Alroy Lobo

Alroy Lobo, Chief Strategist and Global Head, Equities Asset Management-Kotak Mahindra Asset Management Company said they would preferably look at buying into gold companies rather than buying into gold loan financing companies.

Lobo told CNBC-TV18, “We have actually stayed away from gold loan financing companies. However, in terms of companies which are involved with jewellery, my sense is that as gold prices come down, you will see interest once again emerging among buyers of gold at lower prices and therefore one has to take a call between price and volume.”
“Having said that, there was one proposal that was supposed to come in the Money Laundering Bill, which basically indicated that any kind of purchase more than Rs 50,000 would have to be supported by your income tax details. This proposal, my sense is clearly under review and this could be really harmful to these companies. So it is more of those issues which could plague the industry rather than only gold prices,” Lobo added,
He further said, “But at lower gold price, my sense is that given the appetite that Indian’s have for gold, you would once again see buying interest. So we would preferably look at buying into these names rather than buying into gold finance companies.”