Date:18/05/2006 URL: http://www.thehindubusinessline.com/2006/05/18/stories/2006051803221500.htm

Back Dawnay Day bullish on infrastructure

Rajesh Abraham

Offers clients classic portfolio and opportunity-led portfolio

MR NITIN RAHEJA, CIO, Dawnay Day

Mumbai , May 17

Dawnay Day AV Financial Services Pvt Ltd is the newest entrant in the Portfolio Management Services (PMS) business in the country.

DDAV is in the area of financial services, providing high-end, client-focused and specialised investment and advisory services to individual and institutional clients in India and abroad.

With an entry-level amount of Rs 30 lakh for clients in PMS, DDAV manages about Rs 25 crore worth funds for HNI clients.

Mr Nitin Raheja, Chief Investment Officer, Dawnay Day, spoke to Business Line on PMS and about the stock market scenario in general.

What is the market size for PMS business and how do you plan to attract clients?

PMS business is growing at a very fast pace in India.

But, compared to the potential, even today the market is not very large.

There are no published data on the size of the market in India.

In PMS, we offer clients a classic portfolio and an opportunity-led portfolio.

Classic portfolio product will invest in long-term diversified stocks.

The opportunity-led portfolio will be more aggressive and consolidated portfolio.

There are several players who offer Rs 5-10 lakh minimum amount for PMS?

HNI segment is growing in India and they are more demanding. They see PMS as a more personalised product for their investment needs.

Those that offer PMS with an entry-level size of Rs 5-10 lakh will face serious servicing issues. They could be doing it as an entry-level strategy.

Stock markets are scaling new peaks almost on a daily basis. Is it not time for caution?

Definitely, valuations are not the most compelling. Still, the markets are not yet euphoric. The stock prices are reflecting the growth rates in the corporate sector. The fourth quarter and the full-year results have pleasantly surprised most analysts. The markets have been driven by liquidity. . In our view, it is not wrong to believe that the Indian corporates will continue to grow at 15-18 per cent per annum.

What are the sectors you are bullish on?

We are bullish on the infrastructure sector. The infrastructure spending will drive the sector over the long-term. If India has to sustain a growth rate of 8 per cent levels, it cannot be done without infrastructure spending. There is clear visibility of growth (in infrastructure sector). Construction, power ancillary, engineering and cement sectors would immensely benefit from infrastructure spending.

What are the other sectors that offer good potential for growth?

Textiles will do well in the coming years. There is capital expenditure in the sector and companies are ramping up production capacities. Outsourcing will be the main theme in textiles. Banking sector, which has been a laggard, will also do well. We are also bullish on commodities sector, especially the non-ferrous metals. The value-added segment of the steel sector will also do well. Quasi construction sector promises good potential.