The infrastructure and real estate sector could witness the emergence of new asset owners such as sovereign wealth funds, pension funds and private equity players.
At a time when the world is grappling with uncertainties surrounding Covid, Bank of America (BofA) Securities has listed out some themes that will play out in the post-pandemic era. The foreign brokerage in its report stated that while the bigger companies would continue to gain more market share, the dislocation in the markets would further accelerate disintermediation of the wholesalers. It also added that new asset owners are likely to emerge in infrastructure and real estate, as liquidity would be tight and lenders would remain cautious.
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Another big theme that the brokerage expects to gain momentum is the formalisation of jobs. Commenting on the ‘Make in India’, Amish Shah, India equity strategist, BofA Securities, said during a conference call, “Even if India does not succeed in getting a lot of global FDI, even if we work on doing import substitution that itself can be a big deal. On the import substitution part, we have seen progress large sectors such as consumer electronics. During Covid, the government realised that they should not rely for critical supply such as medicines on Chinese import, so they want to localise API and the intermediates used in pharma, on the back of that pharmaceuticals will potentially see progress. The recent announcements in the commercial coal mining and defence space could lead to import substitution in these sectors.”
Source: Financial Express
