Abhay Laijawala, Head of Research, Deutsche Equities India, says he is bullish on the real estate space.
Q. What should be the investment strategy after the recent reforms?
A. We are recommending addition of beta to the portfolio. We view infrastructure positively because we understand that the government is going to clear the National Investment Board (NIB), which will allay concerns about large projects that are held up.
Q. Which sectors do you prefer for investment?
A. We like the real estate sector and believe that the possibility of a rate cut has increased after the government's announcements on diesel prices and fiscal consolidation.
Q. Do you expect inflation to moderate soon so that the RBI cuts interest rates?
A. We believe there is high possibility of a rate cut (though this is not our central view currently), which will give further boost to the capital market, given the government's resolve on fiscal consolidation and strengthening of the rupee.
Q. How do you see the government's disinvestment programme panning out?
A. Disinvestment is going to be a manifestation of how supportive the markets are. If the government can complement the confidence of FIIs with the interest of DIIs, it will galvanise sentiment. However, the government will have to give incentives to retail investors.
Q. Do you think the worst is behind us? What are the developments that investors should watch out for?
A. Administrative reforms, particularly the creation of NIB, and a rate cut would result in an on-the-ground improvement in three-five months.