Positive on India, see more foreign inflows: Naissance Cap
Here is a verbatim transcript of the exclusive interview with James Breiding on CNBC-TV18. Also watch the accompanying video.
Q: What are you sensing in the global markets now – in the US and even in the emerging markets? Are you sensing fatigue, or do hedge funds not smell further gains at this juncture?
A: I think we are at real crossroads right now in terms of markets because we have had this fantastic run-up really across the board as you know since the March lows, and particularly in those places where risk was perceived to be higher.
A lot of investors had really missed out particularly the high net worth market and also the long-only markets as well. Now we are sort of coming up to this 200-day moving average. We have seen retracement of 30-40%. And of course the good part, probably the consensus in the market is thinking this is just a market rally. And now we have sort of had the moment of truth where either of these 200-day moving averages hold up and provide some sort of support or if it does break then there could be quite a move downward.
In terms of data points we don’t really have a lot going forward in terms of earnings or pure evidence of the sort of greenshoots becoming something more sustainable. I think what we have had really is more of a normalisation of markets where – the sort of Armageddon scenario that has now been dispensed with. We are now trading up to sort of pretty ranged levels across a variety of asset classes.
We have become quite cautious and sort of taking chips off the board. We think the downside risks probably exceed the upside potential given the fact that we have come so hard so fast.
Q: At the end of the day you have institutional, directional traders – funds that take positions because they find a direction in the market. What is your call on the Indian market? Directionally is this market heading north or south, because we have had a tremendous run-up? Could you also shed some light on where do you think directionally both crude and metals markets are moving?
A: I think you could more or less put all three of those markets in the same basket. I mean India of course has been a fantastic performer and been among the best performers. It has been right up there, head and shoulders above developed countries and really in the top-tier of even the BRIC markets and the resource, energy based stocks. So, it has been a fantastic performer as we spoke last time. We have been very positive about India and we sense there would be more foreign inflows.
