'Banking, real estate will be in focus'

India’s realty space was relatively immune to the turmoil, but the liquidity squeeze resulted in slowing of demand and drying up of resources. Satya Bansal, CEO, Barclays Wealth, tells Puneet Wadhwa how a strong regulatory framework helped India tackle the difficulties

What is your investment strategy given the current state of India’s equity markets? Which sectors are you bullish on?
We expect the Sensex to rise about 15 per cent from FY10-end to about 20,500 by the end of March 2011. Our conviction emanates from the unique growth story of India and anticipated economic reforms.

We are optimistic on banking, infrastructure and real estate and certain emerging themes like old private sector banks and agriculture.

How do you expect the rupee to pan out in 2010?
The rupee is expected to strengthen gradually to around 43 against the dollar by December 2010. We expect continued flow of foreign capital in the form of FDI, FII investments, NRI remittances and export earnings and hence expect continued strengthening of the rupee. There can be some intervention by the Reserve Bank of India to contain any appreciation beyond 43 levels.

Besides equity, how will other asset classes pan out in 2010?
We expect a gentle uptrend in commodities in 2010, albeit at a slower rate than in 2009, as the pick-up in global demand is likely to be moderate. Industrial metals and energy should maintain an upward momentum; however precious metals may weaken.

India was relatively immune to the turmoil in the realty space. However, liquidity squeeze hit this sector like a double-edged sword — drying up resources and slowing demand. However, due to a strong regulatory framework, India managed to tide over the troubled waters with relative ease.

The result has been better availability of finance for both the consumer as well as the developer, and thus a steady revival in demand. We have a positive view of real estate companies which have good land banks and high ratings for project aggregations.