Sankaran Naren, chief investment officer, equity, ICICI Prudential AMC, tells Puneet Wadhwa that volatility will provide market participants with good investment opportunities. Edited excerpts:
What is your outlook for the equity markets for 2011?
We believe equity markets in 2011 will be volatile. However, for investors, volatility will provide investment opportunities.
On the positive side, Indian economy is one of the fastest growing economies in the world, with a good banking system, substantial capital comfort, no major delinquency problem, consumer confidence and corporate strength. On the negative side, rising crude prices are a cause for concern.
How have you churned your portfolio in the last six months? Which themes got included and which went out of flavour?
In the initial part of the last six months, we believed banking was getting fully valued. Therefore, we trimmed our exposure to financials. Towards the latter part of the six months, we invested in commodity stocks since the global outlook improved.
The strategy for the next quarter continues to be pro-commodities, given the expectation that global markets will do well over the next quarter.
On the domestic front, handling of inflation and fiscal deficit-related issues for 2010-2012 will provide guidance on our future portfolio strategy.
Has the investor sentiment towards bank stocks been affected after the recent scams and liquidity issues?
The investor sentiment has been affected. However, as mentioned earlier, the sector is still well-positioned.
