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Mkts to trade 10-15% higher, buy BHEL, L&T: F&C Investments
Jeff Chowdhry, Head-Emerging Equities, F&C Investments, sees markets trading 10-15% higher from current levels. But was quick to add that it will be in a 5-10% range either way.
Q: How much higher unless you are talking about new highs in the next 6 months- how much higher do you think valuations can support from here?
A: I would say 10-15% possibly from this level. I think before the whole thing is over I do think the emerging markets will go back to the old highs which we saw in 2007. So by the time we become seriously worried the emerging markets will be higher by 20-25%.
Q: Where do you stand on this dollar trade because lot of liquidity apparently coming to our part is because of dollar carry trade - do you see any signs of that reversing or you are in the camp which believes that the dollar is headed one way and that is down? A: It's a very common consensus to believe that the dollar will continue to fall but I'm not in that camp. I believe that the US dollar is likely to stabilize sometime soon. And I'm not betting against a further big fall in the dollar. I think a lot of people have already got a lot of bets in that direction
Q: One word on all the IPOs that have hit the market recently and whether you have participated in any of those stoires?
A: We have taken a look at most of them; unfortunately we have participated in none of them primarily because of valuation. Often when we look at IPOs we look at the valuation we also see what is the stock market elsewhere, and frankly none of them has excited us at the point in time, but there is always time for them.
