(Bloomberg) -- UBS Group AG predicts India’s stock market is in a “secular” bull phase that will continue.

The 28% rally in the nation’s benchmark index this year has been propelled by global liquidity and India offers good yields, Anuj Kapoor, managing director and head of investment banking at UBS in India, told Bloomberg Television’s Rishaad Salamat and Haslinda Amin in an interview on Thursday.

“There would be a divergence in good public offers versus relatively weaker ones and investors will exercise much more discretion,” Kapoor said. “I think this will play out in the next 6-12 months but not to undermine the fact that we are in a secular bull phase for a few more years.”

Kapoor said retail participation, which is at an all time high, will continue to rise as Indians direct their savings to the stock market. 

His bets include large private sector banks that raised capital last year. The ESG theme is also something investors should watch, he said.

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