PIMCO concerned about fiscal deficit remain, maintains underweight on Indian Markets

LONDON/NEW DELHI: Maintaining an underweight stance on Indian markets, Masha Gordon, EM Portfolio Manager at PIMCO told ET Now that there is modest scope for more policy action in the Indian economy.

Even though the recent rally in rate sensitive stocks signals that the government's action 'is for real', Gordon said that concerns remain on whether the policy initiatives will be able to address the mountain of fiscal deficit. Gordon emphasised the need for coordinated state and central government action. This she said would ensure a higher growth trajectory.

Gordon thinks that the opening of FDI in multi-brand retail will create opportunities in both infrastructure and logistics sector.

Calling the Indian rupee a high yielding currency, she said that PIMCO likes rupee. Lower oil prices and recent policy measures will benefit the Indian currency, Gordon said. Indian equities she feels are at high valuations and have never been cheap.

Asked about her take on Indian PSU banks, Gordon said that she prefers private banks and usually stays away from government owned entities owing to governance issues. She cited the case of 'binary decision making nature' in Coal India and the prominent theme of socialisation of profits as the reason for not investing on PSUs.