India’s SBI Life Insurance Co. Ltd has increased investments in the metals, oil and gas sectors as a rise in energy and metals prices is set to drive growth in commodity stocks, the insurer’s chief investment officer told Reuters.
Strong refining margins at oil and gas companies, the Indian government’s push to encourage use of gas as a cleaner fuel and a rise in steel and base metals prices are expected to drive earnings in the sectors, Gopikrishna Shenoy said.
“That is why we are overweight on these sectors on select portfolios,” said Shenoy, who oversees the management of more than $16 billion of investments in debt and equity.
“This year the allocation has been more into commodities, oil and gas.”
Prices of base metals such as aluminum and zinc have been on the rise in India as a clampdown on pollution in China has hit production in the country and in turn boosted demand in Asia’s third-largest economy.
Refining margins at oil companies including Reliance Industries and government-run Indian Oil Corp and Bharat Petroleum Corp have increased as higher demand for gasoline and diesel caused a surge in retail prices.
Source: Reuters
