Overweight on private sector banks: ING Investment Management

In a chat with ET Now, Ramanathan K, CIO, ING Investment Management India, shares his views on banking sector.

ET Now: What do you do with financials, do you lighten up positions or do you believe they have been beaten down enough for you not wanting to do that?

Ramanathan K: We continue to be overweight private sector banks and we are neutral to underweight public sector banks. We still feel that there is a couple of more quarters of pain left. Today’s bounce back possibly could be because of the fact that some of the stocks have fallen by 30%-40% and there has been a good reason in terms of positive news flows to buckle up.

But we would be cautious still, while some of these banks especially the midcap PSUs are trading at 0.5-0.6 times price to book. We do not see a runaway rally going forward in the short term. May be during the result season depending on the results and the NPA built up, you could see some correction in these banks.