Prices of central public
sector undertakings (CPSE) and Bharat-22 exchange-traded funds (ETFs)
are expected to witness a healthy pick up, as public sector undertaking
(PSU) stocks bounce back from oversold levels.
opined on Thursday that the two ETFs have gained investors' attention,
especially on the back of attractive discounts and healthy dividend
Consequently, the demand for the two ETFs -- CPSE and
Bharat-22 -- may also help the government in meeting its divestment
target for the current fiscal.
Since 2014, Centre has been
divesting its stake in CPSEs via the ETF route. The last tranches of the
two ETFs were oversubscribed with the government raising over Rs 15,000
"Prices of CPSE ETF and Bharat ETF have seen healthy pick
up since September-October 2019, as PSUs bounced from oversold levels,
the US-China trade deal showed promise benefiting metal companies and
the government's announcement on strategic divestment in companies like
BPCL, BEML, SCI etc. ignited buying interest from traders and
investors," HDFC Securities' Retail Research Head Deepak Jasani said.
to NAV (net asset value), healthy dividend yield, low P/BV, low P/E
ratios and proper timing of these issues have resulted in a very good
response from investors," he said.
Market analysts also opined
that the two ETFs gained attractiveness on the back of improved earnings
and government backing at a time of slowdown.
"At the time when
the industry going through crisis after crisis, the safest bet is with
the CPSEs," an analyst with a leading brokerage house said.
"For a short duration these ETFs offer attractive returns and investment safety."
While the CPSE ETF invests in 11 state-owned companies, the other fund invests in 22 firms.
The CPSEs that are part of the Bharat-22 ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco.
Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC
India, Axis Bank, ITC and L&T are the other constituents.