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Sectors in Focus After 2019 Election

Posted on 2019-07-11 in WEALTH NOTE RESEARCH

A stable government is necessary for the stock market to perform better. That's why investors and businesses wait anxiously for the election results. As the NDA government is enjoying its second term, the question that investors are asking us is, which will be the top sectors in 2019 post election result? As per our analysis, we're expecting these five sectors to do well in the future.


1. Banks (Public and Private)

If you're looking for a long-term investment, then private banks are the best bet. But this doesn't mean all the private banks are good. YES Bank and IndusInd Bank are the two examples that are facing problems currently. As far as the public sector banks are concerned, we're little skeptical about them. This is because of the intervention of the government in the business. Moreover, as the government is merging all the public sector banks, there could also be problems like worker union and strikes.

Such problems are not likely to occur with private banks. However, when selecting any private bank, it's necessary to understand their allocation first. Know how they're utilizing their funds. Are they investing in retail, wholesale, or corporate banking? Do they have a clean balance sheet? Since private banks give 30% of loans in the country, and invest their funds in a better way, they have better growth opportunities, especially, in retail banking. We have concluded HDFC, Kotak, and IDFC First to be an attractive option for investors.

2. Infrastructure

No doubt infrastructure is a debt-ridden sector. But there are sub segments within this sector that are expected to do well in the coming years. For example, the cement sector. As per the mandate of by the BJP government to provide a home for all by 2022, the cement sector is set to receive a major boost since it's the basic thing required for construction and development. We are more bullish on Ultratech cement as the track record of this company is good.


3.         Insurance

As people are becoming more aware about the importance of insurance and trying to cover themselves and their properties with policies, general insurance and life insurance sectors are sure to receive a boost. In the general insurance category, we have great expectation from ICICI Lombard and HDFC Life in the life insurance segment.


4.         Real Estate (Allied Sectors)

The real estate may be witnessing a sluggish growth at the moment, but in the coming years, the sectors associated with it will have a tremendous growth. One reason why we are betting on the allied sector is because of the BJP government's housing scheme. That's why we are bullish on the paint industry because every building that provides an accommodation needs to be painted. We believe the stocks of Asian Paints will grow in the coming years.

Another allied sector that we're confident about is the housing finance. To make homes affordable to the citizens, the current government is bringing lots of reforms. If you want to invest your money in housing finance companies, then HDFC Ltd. is the one to rely on.


5. Agriculture

For a nation to prosper, it's necessary to give importance not just to the industry, but agriculture as well. That's why the BJP government has announced lots of schemes to boost this sector. They are taking maximum efforts in supporting farmers during natural calamities and ensuring their income is double. Even lots of subsidies have been provided to the fertilizer sectors. The Pradhan Mantri Kisan Samman Nidhi announced by the government is also expected to boost the agriculture sector.


These are the top sectors to invest as per our analysis post-election result. If you want to know how to analyze the market value of these sectors and foresee their growth, contact https://wealthnote.in/ for stock market classes and become an informed investor.

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