Mutual Fund managers seem to be bullish on bank shares as they raised their allocation in the sector to an all time-high of over Rs 88,000 crore in November. In comparison, equity fund managers’ deployment in banking stocks stood at Rs 70,575 crore in November 2014.
Industry experts said that fund managers raised their allocation to banking stocks, especially private banks which have consistently beaten their public sector peers in performance and have lower non-performing assets (NPAs). Banking stocks have high weightage in the BSE index, Sensex. They added that fund managers can not take a bearish call on banking stocks, given the high weightage attached to the index.
As per the data available with Securities and Exchange Board of India (SEBI), overall deployment of equity funds in bank stocks stood at Rs 88,000.61 crore in November compared with the previous high of Rs 85,376 crore in the preceding month. Besides, exposure to bank stocks was at 20.92 per cent against 20.67 per cent in the preceding month.
The BSE bankex index inched up 0.72 per cent in November, while BSE Sensex witnessed a drop of 1.2 per cent. Apart from that, IT was the second-most preferred sector with fund mangers after banks with an exposure of Rs 41,519 crore, followed by pharma (Rs 32,521 crore), auto (Rs 29,776 crore) and finance (Rs 24,422 crore). MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.
