Expect bull run in private sector banks: PN Vijay

PN Vijay, Portfolio Manager expects a bull run in private sector banks instead of gold loan financing companies.

Vijay told CNBC-TV18, “There could be damage on gold loan financing companies, because unlike banks that have very miniscule portion of their loans into gold financing. These (gold loan financing companies – Manappuram Finance, Muthoot Finance) people have a major portion and gold is in a free fall, people are talking about USD 1200 per ounce. So, the erosion in margins and interest provisions is going to be very swift.”
“More than that we are seeing a psychology, these are high beta midcap stocks so psychology of investors will take it down a bit further. There will be a stampede out of these stocks and people should move into strong names or private sector banks, where I expect a bull run instead of these gold companies,” Vijay added.