MANAGER SPEAK
Tridib Pathak, fund manager, IDBI-Principal Tax Savings Fund
Given that the technology sector has not been doing well for the last few months, are you looking to pare your substantial exposure to the sector?
We have pared our exposure to the sector. Currently, the technology sector forms approximately 12 per cent of our portfolio, down four per cent, as on February 28, 2002. We expect the technology sector to remain depressed because of the uncertainty between Iraq and the United States. War may adversely affect technology spending in the western countries, thereby lowering the earnings growth of Indian companies.
Given the considerable delay in the disinvestment programme, does it make sense to hold on to PSU stocks?
The disinvestment risk comprises the policy risk and the implementation risk. The policy risk was taken care of when the government announced the procedure for disinvestment of HPCL and BPCL. Therefore, we have gone ahead and bought HPCL as a disinvestment play. The other stocks that we have in our portfolio are based on our perception that they are undervalued at present.
Banking also forms a major chunk of your portfolio. Do you believe that the sector will continue to perform given that interest rates may rise?
We believe that the banking sector will continue to perform well. As the economy picks up, the banking sector should improve through better quality of assets and credit growth. Therefore, we believe that there is good long-term potential in banks. The increase in the interest rates does not bother us as we expect the interest earned on advances to increase by an equivalent amount. This would help maintain the net interest margins of banks.
What sectors are you bullish on?
Besides the banking sector, we are bullish on automobiles. We are confident that there would be 15 per cent growth in the auto sector.
