Investing in Infrastructure sector now makes sense.

>> Tuesday, December 9, 2008

Real estate sector has tumbled in the same way in which Jill fell down in the well. But as inflation has now cooled it makes sense to buy some blue chip real-estate scrip’s. Home loan have sweetened leading to higher demand of new homes. This sector has a potential to turn the markets upside down as every new investment needs infrastructure and now low rate home loans will give a boost to many things directly and indirectly. The main sectors to benefit are firstly Infrastructure and later Banking.

Looking for a long term point of view one should pick up few beaten up stocks. I would go for Larsen & Tubro (LNT), Unitech , HDIL , SBI , ICICI Bank and Indiabulls Real estate.

Cooling home loans rate is the only reason why I am bullish on this sector for long term.
Happy Investing.
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M.M.Mohit. December 9, 2008 at 3:45 PM  

I totally agree

stockezy December 9, 2008 at 3:49 PM  

chirag, if you look at HDFC it has reduced lending rates to 16% I dont think this is good enough, new home buyers will get attracted at least at 11%. If you remember the bigger boom came at 8-9% rates. so lets not get excited so soon.

Chirag December 9, 2008 at 4:00 PM  

Stockezy I agree till some extent but even a minor reduction in home loan rates can bring an opputrunity for the buyers who are wating from long to buy their own homes.
According to economics principle home rates are
Relatively Inelastic.
A price drop usually results in an increase in the quantity demanded by consumers. You can say them as Giffen goods too.

This is the reason I am bullish on Real Estate.
Though I partly agree with you.