V Balasubramanian, Head-Equity & Fund Manager – Equity & Gold, IDBI Asset Management Ltd has over 33 years of work experience of which 15 years have been in the Mutual Fund Industry and 8 years in Treasury of a nationalized bank. Prior to joining IDBI Mutual Fund, he was Senior Manager of the Treasury branch of Indian Bank.
IDBI Asset Management is a subsidiary of IDBI Bank Ltd. IDBI Mutual Fund is sponsored by IDBI Bank Ltd and IDBI Capital Market Services Ltd. (co-sponsor, wholly owned subsidiary of IDBI Bank Ltd). The Fund House holds a strong presence in the country through its branches and distributor network, including IDBI Bank Ltd.’s 1149 branches. IDBI Mutual Fund’s mission is to promote financial inclusion by assisting the common man in making informed investment choices through mutual funds and thus bring to him, the prosperity of the capital markets.
Replying to Yash Ved of IIFL, V Balasubramanian says “The policy tightening measures by the RBI to ease inflation is not anticipated at this moment, while at the same time a reduction in key policy rates is also not expected.”
How are you reading the current situation of the market?
The current market scenario is that the negatives are ignored and only the positives are being looked at. With the elections due in one month, the pre-election rally more on the hope of a stable Government that has the power to take decisions on its own, is what the market is wishing for. The prices are moving in expectation of this.
The conviction on the part of FIIs on this is driving the market at this moment. It is a broad based rally driven more by hope than fundamentals. It is also not stock specific, it is more a index game that is played out now. There is no leadership in the current rally.
What is your take on inflation.
The inflation and interest rates are closer to their peaks and the twin deficits contained there is a breather. The growth rate is almost at its lowest. The current account deficit has been contained more by restricting import of physical gold by following 80/20 policy for gold imports, while the aggressive PSU disinvestments, dividend payouts and postponement of expenditure to the next fiscal helped, though not in entirety, reduce current account deficit.
The monsoon in the FY 14-15 fiscal and its impact on the inflation as well as the currency movements would determine the interest rates going forward.
Do you expect rate hike in the coming months?
The policy tightening measures by the RBI to ease inflation is not anticipated at this moment, while at the same time a reduction in key policy rates is also not expected.
Which are the sectors you are bullish and bearish?
With the economy expected to do well in the next three years, sectors like Banking, automobiles, engineering, pharmaceuticals are the sectors that can be looked into with neutral view on IT and FMCG.
What is your AUM?
Our AUM as on February 2014 is around Rs.6400 crores.
What is your advice to the retail investors?
Our advice to the retail investors is to stay invested in equities for a long term reward.