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Ashok Wadhwa, Ambit
Jun 16, 2017 | Source: CNBC-TV18
The interest in India continues to be significant and deep. People continue to believe that India is a bright spot in what now is an even more instable world. We know what happened in the United Kingdom in elections last week, we know the on-going struggle in the United States, and I would like to believe that the interest in India therefore is high.
Obviously people believe that valuations have moved fast, that stocks in India are expensive, but again, if you ask them a question from a three, five, to 10 year perspective, the long only investors continue to believe that the entry point may be a little high, but there is enough value in the Indian market going forward over a long period of time.
I think the favour continues to be banking financial services, and the consumption story. Those are clearly two big pockets which continue to attract interest in investment. I am starting to hear for the first time people wanting to look at infrastructure and people wanting to look at companies that are considering a capex cycle which I think is truly heartening because I have long said that we need to see investments going into infrastructure and in the capex cycle to believe that India’s growth over a long period of time is now sustainable. Just consumption led growth can take us only so far, and not beyond that.
Talking about PSU banks : This government has shown vision and forward thinking. This government has shown ability and desire not to accept status quo, but to take transformational steps and therefore I would believe that it is well within the ambit of this government to be able to initiate the process of consolidation within the public sector banks.What one needs to be cautious about is how do you consolidate and make sure that the few strong public sector banks that we have, their valuation and their value does not get diluted because they have to carry relatively weaker public sector banks.
The nature of the consolidatee and the characteristic of the consolidatee and what impact that consolidatee has through the consolidation process on the consolidator is going to be a very vital element in terms of creating vitality within our PSU banking system. However, without doubt in my mind, the Finance Minister is committed to finding a solution, and I have no doubts that we can expect something transformational in the near future.
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