Mkt looking tired; using divestment as trigger: Samir Arora

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Mkt looking tired; using divestment as trigger: Samir Arora

Negative on the markets, Fund Manager of Helios Capital, Samir Arora believes that the markets are looking a little tired, using divestment as a trigger. "Flows alone cannot support the markets."

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Markets may breach 5,200 in Dec: Dipan Mehta Indian market run to continue into 2010: Experts ALSO READ See what other FIIs are saying about the markets See what other experts are saying about markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news JSW Energy |

Being negative on the markets, Fund Manager of Helios Capital, Samir Arora believes that the markets are looking a little tired, using divestment as a trigger. "Flows alone cannot support the markets."

"The first few months of 2010 may be similar to 2008-ie negative." Also, January is not open for new tap of fund flows, he says.

Commenting on the flurry of initial public offers (IPOs) despite bad performance, Arora says, the situation is worrisome. Having not participated in real estate and power IPOs, he says, JSW Energy will trade below issue price. Further, he says, a large IPO calendar from the government is another worry.

Most of the new money, Arora says, is coming via exchange-traded fund (ETFs). "The market is not seeing flows from India-dedicated funds."

Arora says he will not buy mid-caps, "they will correct more". The telecom sector, he says will underperform for a long time. "The sector has not made money except Bharti ." Huge competition has changed the telecom environment, he adds.

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

Q: How have you read the rangebound move since October? The fact that the Nifty has just been gyrating in a range - are you reading it as sluggishness or just building a platform before another leg up?

A: I have been viewing it as sluggishness and tiredness generally. My view on the margin has been negative in the recent months basically driven by the fact that the market seems to be using wild logic in justifying these individual stock prices whether in the power sector or in PSU divestment where a large divestments lead to stocks moving up, as if the world is excited that there will be opportunity to buy billions of dollars more of the same stock. 

So things which to me don't look rational, I feel that this means the market is trying to use justification where none exits. But over full year 2010, I would be very positive but for the few months maybe it will be in similar range or even down a little bit.