Focus on frontline banking stocks; be cautious on retail lending NBFCs: BNP Paribas

When asked about his picks in the Indian markets, whether he would have an economy-facing or defensive strategy, he said “We have feet in two boat kind of strategy.” He further explained, “Possibly, it’s a value which offers more opportunities now, simply because the difference in valuation and the difference in ownership from institutions and retail’s perspective had become too large a gap between growth and value. Some of the classic value plays like the public sector banks are also starting to do well even though they may lose market share in the long-term, but it seems in the medium term, they have built a significant credit cost buffer. That could potentially lead to an earnings growth story over the next couple of years.”

On equity markets, he said, “We think regional markets including India will continue to remain strong for a while. It is clear from various central banks’ pronouncements over the past few days that they are not likely to step away from this accelerator on easy monetary policy and quantitative expansion that they are doing.”

For the entire interview, watch the video.