Private Banks Continue to Gain Market Share
Foreign portfolio investors have been net buyers of banking stocks
Sizeable overseas investments in financial sector
The financial sector has been seeing sizeable overseas investments since the start of the year. The sector saw net FPI (foreign portfolio inflow) of $1.1 billion during the first half of 2018. Foreign portfolio investors have been net buyers of banking stocks over the past 3 years; since 2016 they have bought $6.7 billion worth of shares in the financial sector. According to analysts, these investors are mostly focused on private lenders working in the retail space as the country heads towards greater financial inclusion.
You can gain exposure to private sector banks and NBFCs via the Banking Privately smallcase.
Read more about investing in this theme in our postweek report.
Strong monsoon to boost rural demand
The RBI Monetary Policy Committee expects boost in rural demand due to a strong monsoon and hike in minimum support price, which is expected to increase farmers’ incomes. It said that trends like acceleration in sales of tractor and 2-wheeler sales pointed towards strong rural demand. It also said that the overall performance of monsoon has also been encouraging so far.
You can benefit from growth in rural demand by buying the Rising Rural Demand smallcase. This smallcase has companies that either derive a significant amount of their revenue from rural India or are striving to enhance their foothold across rural markets to benefit from increasing rural demand. The theme has generated a return of 7.62% in the last one month!
