This $3 billion asset manager is betting on these large cap stocks in India

By: | Updated: June 27, 2018 10:52 AM

Even as the global stock markets see heightened volatility due to the ongoing trade wars between  the United States and China, Teresa Barger, the co-founder and CEO of Cartica Management said that India seems to be reasonably insulated from the development.

Teresa Barger, co-Founder and CEO of Cartica Management, LLC, is bullish on HDFC Bank and Page Industries. (Image: Reuters)

Even as the global stock markets see heightened volatility due to the ongoing trade wars between  the United States and China, Teresa Barger, the co-founder and CEO of Cartica Management said that India seems to be reasonably insulated from the development. Notably, Cartica Management LLC, which manages more than $3 billion globally in assets under management (AUM) has significant investments in India’s HDFC Bank and RBL bank.

“I think India does have aspects of a safe haven, from trade turmoil that China is going through. I like the medium term cyclical story in India and having a big domestic market is very positive,” Teresa Barger told in an interview to CNBC TV18. Taking stock of the developments in India in the year so far, Teresa Barger noted, “We had to go through things like the long-term capital gains tax, and then the more recent SEBI regulations on mutual funds affecting the midcap space. There’s always something boiling in India.”

Where is she finding value in the current stock market? “We have seen high quality governance banks like HDFC and RBL, which is in our portfolio, break away from ICICI and Axis Bank and others that are having governance problems, either there’s a scandal or no proper succession planning, which is a real failure of corporate governance,” Teresa Barger said. Notably, Cartica also has significant stake in Page Industries, a high PE stock.

“PE wise we are in very expensive company called Page Industries, many of our investor ask how can you be in a firm with 50-60 times PE? But when you look at the company’s ability to invest at high ROICs (Return on Invested Capital). So we are still interested in these names,” she explained in the interview. In its latest Financial Stability Report, noted that evolving geopolitical developments and rising protectionist sentiments pose added risks.

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