Established in 1994, Birla Sun Life Asset Management Company (BSLAMC) is a joint venture between Aditya Birla Group and Sun Life Financial Inc, leading international financial services organization from Canada. BSLAMC is amongst the top 5 asset management companies in India with a market share of 9.5% 09. The company has 116 branches, full range of product offerings across equity, debt, balanced & structured asset classes and strong investment performance has helped the Company enjoy trust of over 2.15mn investors.
Mr. A. Balasubramaniam was designated as Chief Investment Officer of BSLAMC with effect from 1st January 2006. He has more than 16 years of experience in investment management, both in Equity & Fixed Income. Balasubramaniam has been with BSLAMC since its inception. At BSLAMC, he has worked as Chief Dealer/Trader, Head of Fixed Income Funds and as National Head - Sales & Distribution. Prior to joining BSLAMC, he has worked with GIC Mutual Fund and Canbank Finance (Subsidiary of Canara Bank).
Speaking with Yash Ved andMeenakshi Patki of India Infoline, Mr. Balasubramaniam says: "We are at the bottom of the cycle. From here on we can only go up."
What is your take on the Indian economy? Where do you see inflation and interest rates going ahead?
The Indian economy as of now is on a revival path. The slew of government stimulus measures that have gone into the economy, both fiscal and monetary in the last year or so are beginning to show results. The budget was also growth oriented. The Government will increase spending on infrastructure and other related areas as also create more employment opportunities.
We are at the bottom of the cycle. From here on we can only go up. Inflation will be low for some more time; may be till September-October. Beyond that we see inflation at 3-4% mainly on the back of the high base effect tapering off.
Secondly, the monsoon is weak, so commodity prices are going to move up. The interest rate will remain soft for the rest of the financial year. It is unlikely to go up till the domestic demand picks up substantially.
A lot of spending, especially in the infrastructure segment is expected. In the next five years, the level of investment penetration is expected to rise, which significantly will have a long-term impact. FDI and FII flows would increase resulting in overall industry growth.
What is your outlook for the global economy?
The global economy is at an inflection point, where firstly the governments around the world are putting lots of efforts to preserve consumer sentiment. Secondly, they have provided various stimulus plans to bolster their respective economies. First and foremost, we need to keep an eye on the US, particularly the stability of its housing market.
Global markets will see revival in next 3-4 quarters. Subsequent effects from the US economy’s point of view is they need to spend a lot on improving consumer sentiment and the savings rate should also increase. US infrastructure activities should be more focused.
What is your view on the rupee?
We expect the rupee to maintain its appreciating bias. Now that the new Government is in place, we expect lot of money to come into the country, both in the form of FDI and FII. Also, once the pressure is over in terms of repaying the external obligations by the Indian corporates, we should expect the global money to eventually start coming into the Indian markets. We should see the rupee come closer to 45 levels.
Which are the sectors you are bullish and bearish on at present?
We are bullish on infrastructure, capital goods, IT, Telecom and banking. We are bearish on cement and textiles.
What kind of cash levels are you sitting on?
We are maintaining a cash level of 5-6%.
Besides the budget and quarterly numbers, what are the big events which fund managers will watch out for?
We have to look at how the monsoon will play out. The other big event will be the state of the global economy and its future prospects.
What is your advice to retail investors?
Retail investors should invest in equity schemes from long term point of view. In next 3-5 years, the Indian economy will see revival. We can see a GDP growth of about 8-8.5%.
What is your AUM?
Our average Asset under Management as on June end is Rs560bn.