Even as New Delhi and Beijing continue their struggle for fresh air, global investment banking firm BNP Paribas sees attractive opportunity in various metal stocks and oil and gas players. In an interview to ET Now, Anand Shah, Deputy CEO & CIO of BNP Paribas MF said, “Gas would be the next big thing which will apply to most of the large cities as they try to curb the air pollution. We are also quite hopeful that the gas and the gas-related pipe, natural gas, CNG-related industries will get continuous benefit as more and more cities approach towards reducing the air pollution.”
The expert explained that the Chinese low cost ferrous and non-ferrous metal products had hurt manufacturing across the world, in the last two decades, and this trend is now reversing, as China is open to using global products to curb its pollution. Explaining the impact of a more environment friendly on manufacturers, Anand Shah said, “ A lot of manufacturing industries in various parts of the world including India have suffered because China was extremely competitive given they were not that conscious of the pollution at that point of time. Now this has reversed already or rather it is reversing. That is throwing up opportunities in India.”
As China looks to fight pollution, it will now reduce the use of its own iron-ore, which is quite sub-standard, compared to environment friendly iron-ore available across the world. “China may reduce its use of own ore which is quite substandard compared to the ores available in the rest of the world. So it is not only about chemicals, but if you see overall 20-25 per cent of the portfolio is exposed to the industries which will benefit as China makes U-turn as far as pollution is concerned,” he told the channel while explaining the composition of BNP Paribas Dividend Yield fund.
Anand Shah said that BNP Paribas has been bullish on private sector banks and life insurance companies. “We have been particularly been positive on private sector banks and on life insurance companies of late. We have thrown up a long-term compounding story opportunities in this market place.” Further, the expert said that due to rising competition and global pricing pressure in IT and pharma, the firm is now betting on domestic themes.
“The number of companies that are a play on the domestic economy are actually offering more value, given the challenges that both IT and pharma sectors face in the US market. They also face huge competition and pricing pressure for their products,” Anand Shah said in the same interview.