Every bull market has leadership, said ace investor Ramesh Damani on Tuesday, while adding that the public sector undertakings (PSUs) have played a partial role in leading India's current bull market rally.
"Every bull market has leadership. So the 2000 bull market, for example, was about the technology stocks in India.This bull market is partially being led by the PSU stocks," said Damani at at the ongoing Rising Bharat Summit 2024 in New Delhi which also included Jefferies' Aashish Agarwal, Advent International's Shweta Jalan and Convergent Finance's Harsha Raghavan.
Damani further added that the level of corporate governance has improved in these firms, and the PSU sector will continue to lead this bull market higher.
"We no longer have leakages. We no longer have the phone banking India was famous for in the prior bull market. So this PSU sector will continue to lead this bull market higher."
To put it into perspective, the S&P BSE PSU Index has gained more than 80% in the last one year, while the gains in the last six months is nearly 38%.
On the ongoing discourse of the presence of a "bubble" or "froth" in markets, Damani said there's always froth in the market but he doesn't believe that we are in bubble territory.
Giving an example, Damani said that Jaime Dimon to Jim Rogers have been talking about a bubble in the American markets for the last five years, but the market keeps surprising them. We have the example of Nividia, he added.
Brokerage firm Kotak Institutional Equities has advised investors to exit their public sector undertaking (PSU) holdings and not get carried away with the rally in these stocks.
"We would recommend investors to use the rally in PSU stocks to exit most of their positions," it said in a recent research note.
For more, watch the full video
(Edited by : Ajay Vaishnav)
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