On answering a query on the sustainability of rally in Asian markets Benjamin Pedley, Executive Director, Investment Strategist at LGT Bank told CNBC-TV18 that there is likely to be another wave of write downs from some of the US financial institutions related to the sub prime problems.

We are not out of the woods in terms of equities yet said Pedley.

Excerpts from CNBC-TV18's exclusive interview with Benjamin Pedley:

Q: Seems like it wants to consolidate from here onwards the entire Asian pack that is?

A: That’s right. What we are seeing is very clear leadership from the commodity related stocks if you look down atAustralian BHP Billiton, the world’s largest mining company is doing very well. The Japanese all the companies are doing very well and this is not surprising because Asia mentioned oil in terms of Nymex edging up towards USD 123/bbl.

So it is really about commodities this morning. Gold is also edging back up towards USD 880-885/oz. It is the commodity companies that are showing a leadership role this morning in Asia.

Q: So which countries and which commodities stocks in particular are you putting your client’s money in?

A: I think BHP Billiton remains one of our top picks. It is world’s largest mining company it’s diversified, it’s also has the added bonus. It has got almost 50% of the world’s proven reserves of Uranium. So not only does it have the leadership in terms of being an oil producer, it also has significant exposure to alternative energy sources. So it remains our top pick at this stage.

Q: How sustainable do you see this rally because most of the analysts are saying that the prices are bound to cool-off right now?

A: Talking about equity markets, I think this is a rally in which we are recommending clients to reduce their equity exposure just a little bit. Although we had some good news out of Fannie May last night, which helped some of the financial stocks in the US to rally including Fannie May by almost 9%.

I think there is probably likely to be another wave of write downs from some of the US financial institutions related to the sub prime problems and as a result, I would say that although we are probably more than half way through this so-called credit crisis, I think there is further bad news to come. So I don’t think we are out of the woods in terms of equities yet.