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Bullish on banking for 2015; buying Indian mkt: Kotak UK

A rate cut would help the Indian financial sector, is the word coming in from Nitin Jain, principle investment manager, Kotak UK. He has been buying the Indian market and is bullish on the banking sector for 2015.

He says Kotak UK has not made major changes to its portfolio, while adding that some FIIs booked profits in the last few days.

Below is the verbatim transcript of Nitin Jain’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.

Sonia: What is the sense you are getting about the Indian markets? We seem to have put that small correction behind us but do you think it is time to put in some fresh money now?

A: We have always believed in this era of change that any big dips are to be used to buy into the Indian market. We will run into some hiccups here and there but the journey is on an uptrend; any correction should be used to buy in. So we have been putting some money to work in this correction.

Latha: Where have you been putting it to work?

A: It is more on domestic cyclicals that we have been saying for a while. We practically moved some more money into banks again. I believe that there will be smooth rides for banks going forwards. We also expect a rate cut sooner than later, so those things will look good for the banking sector as a whole.

Latha: For the better part of December we saw foreign institutional investor (FIIs) as sellers in the Indian market, over a billion dollars or almost a billion dollars of stock got sold. We saw a minor buy number on Friday – should we consider it as an exhaustion of selling and at 8,000 we become attractive. How do we read the FII mood on India now?

A: Do not look at the number very closely because it has been a good year. Some people have booked some profit. India has been an exceptional market this year when compared to many other markets. If you ignore China for a moment, and China, only the local share moved up; the Hong Kong exchange did move up. So, there was good profit for FIIs for the year as a whole. So, there was some bout of profit taking, there would be fresh allocation in the next year.

Sonia: Apart from the banking sector, what are the other spaces that your are putting money to work now?

A: No major allocation at this point in time, so just a little bit of money has been deployed in banking. We are already in the domestic cyclical space in a meaningful way and we intend to carry that position. So we have not moved our portfolio any bit in the last month or so.

Latha: It is at least a 30 percent gain for the Sensex and the Nifty as you pointed out in 2014. What is the base case for 2015 and what will be the leaders of that rally?

A: I am in Delhim so the mood right now is rightly like the weather. In the last month or so it has been a winter chill on reforms and right now there is dense fog ahead. By the time spring happens in Delhi and before the summer heat bit picks up we all should do what is required.

So we have the oddment which is already in play but those are short-term gaps we need to fill them up. We need the desired reform policy to happen in the next two-three months. I expect things to happen in the next two-three months and that will give a direction for the market for the rest of the year.

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