Don't believe mkts will take highs in 2010: Parag Saxena

Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Parag Saxena, Founding General Partner & CEO of New Silk Route, NSR Partners was named in the Forbes Midas 100 List of Top Deal Makers in 2009. That's the fourth year that he was on the list in a row. He came in at number 28 this year, up from 31.

In an interview with CNBC-TV18, Saxena spoke about the economy, the markets and the possible opportunities that India had to offer.

Commenting on the markets, Saxena says, "We will see a drop that takes us down 2,500 points, which probably makes the market reasonable and makes it attractive again, from current levels."

Articulating the reason for the pullback he said, "The more likely reason is that markets around the world that have risen sharply will cut back and that cutback then leaves global managers of money to pullback from equity markets globally, and some of that money is going to be pulled out of India."

According to him, the long-term trend on the dollar is down versus many currencies. He says, "There is a huge expenditure that has been put up. At some point we will have to pay back the trillions of dollars that are being spent and even more that will be spent when the healthcare legislation is eventually settled in the United States."

He doesn't belong to the school of thought that thinks that Indian markets will see its highs being taken out by 2010. "I think that there is a real concern in 2010 that you will actually see the pullback. As the comparisons become hard the commercial real estate problems become concrete and visible," says Saxena.

He believes that although short-term tightening of interest rates will be a bad thing, it eventually would happen. He sees some tightening of interest rates happening in the next six-nine months.

Here is a verbatim transcript of the exclusive interview with Parag Saxena on CNBC-TV18. Also watch the accompanying video.

Q: Was last year a difficult year to make deals?

A: Last year was a difficult year to make deals anywhere in the world. There was a big gap between expectations of entrepreneurs or promoters and where people who had capital were willing to provide it.

Q: You said that 2007 was a horrible year because valuations had gone so high and there was a lot of stupid money chasing these investments. Is it stupid money coming into the markets today or it is very wise money?

A: I don't know whether it is very wise money but it is certainly more intelligent - at the headline level, you had money coming in, in the high 17s, 18s, 19s, 20s, 21s where the Sensex topped out and the opportunity was down in the 8,000-9,000-10,000 the second time, not the first time around, and you would be looking at reasonable paper profits today. In the end though, financial markets are the one place where people for some reason, if you hang a 'for sale' sign out in the financial markets, nobody comes. You go by t-shirts, jeans, 'for sale' sign attracts people.

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