Banking stocks may have taken a beating in the last few weeks as a result of poor credit offtake and hopes of a rate cut fading following high inflation. However, it has not dampened the optimism of mutual fund houses, which are bullish on the financial sector. | |
| A number of fund houses, including Kotak Mahindra AMC, Sundaram BNP Paribas and LIC Mutual Fund, have drawn up plans to introduce products aimed at the financial services sector. |
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| "Banks' balance sheets in India are one of the finest in the world on Tuesday. With the fundamentals heavily in favour, they should continue to perform well," said Sandesh Kirkire, chief executive officer, Kotak Mahindra AMC. |
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| Acknowledging the recent correction in the banking sector, he added that global trends were bound to affect the economy and banking sector was not an exception. |
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| "Returns on exceptions have to scale down, but equity as an asset class would continue to outperform," Kirkire said. The company has already filed an offer document with the Securities and Exchange Board of India (Sebi) for Kotak Banking and Financial Services Fund. |
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| Bank stocks for long had been one of the favourite picks for many fund managers. A little less favoured key constituents of the financial services sector are the stocks of financial institutions, broking companies and housing finance outfits. |
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| Kamlesh Gandhi, country head, Religare Enterprises, said there was a slowdown in valuations of financial sector stocks but Indian corporate entities still continued to remain attractive. |
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