Generally, what we see during a crisis – like Covid19, people tend to reshuffle their portfolio by investing in liquid assets. The recent figures in the surge in deposits shared by the SBI reaffirm the same, a deciding factor in long term investments. This pandemic situation has brought us to the point where health plans and insurance for well-being will be given priority and health assets would also join the list.
When the world is suffering and the vaccine is still at the development stage, a large fall in the equity market was witnessed throughout the globe. In the second round of stimulus package, the government has announced a host of measures for troubled and vulnerable sectors like NBFCs, real estate, MSMEs, and agriculture. These measures will hopefully, positively impact these parts and help them in surviving the financial downturn in the medium term. This may prompt some recuperation in the business sectors in the coming meetings. Banks and NBFCS would get support through expanded liquidity (as the measures would help MSMEs satisfy their obligations to money related foundations) and in this manner, stocks like Hub Bank, M&M financials, HDFC Ltd, ICICI bank could profit. In the horticulture and united parts, we are sure about stocks like Coromandel Global, Godrej Agrovet, and Rallis India.
In the recently announced package, the government has tried to push various credit support to businesses. And, PSU banks are likely to lead the charge in providing credit, which has raised fears of further deterioration of asset quality. For the well being of their families, people are realizing the importance of health plans and insurance. At a time where it has become hard for insurers to provide the amount on a claim by a patient due to the number of patients hitting the roof, they are coming up with new policies and schemes and the amount will be increased shortly in the name of premiums. We in this way observe a high chance of investments flowing towards areas like banks. Stocks like HDFC Bank, HDFC Extra security, ICICI Bank, ICICI Prudential Life coverage, Kotak Mahindra Bank and SBI life coverage would profit in the medium to long haul driven by solid brands, consistent execution, great long haul development possibilities, and sound accounting report.
