Moneycontrol » News » Markets » Expert & FII Outlook

Oil to stay at $110-120/bbl this yr: Merrill Lynch

Published on Mon, Jun 16, 2008 at 10:35 | Source : CNBC-TV18

Updated at Tue, Jun 17, 2008 at 11:28

Like this story, share it with millions of investors on M3

Share on Tumblr

Excerpts from Bazaar on CNBC-TV18 Watch the full show »

ALSO READ

Nifty

BSE | NSE 25/05/12

Are Mutual Funds betting on Nifty?

Mark Mathew of Merriyll Lynch has said that India will be amongst the least preferred markets in Asia if oil stays high. The food price and inflation concerns not as serious as crude.

He likes India from a stock-picking perspective and select companies in banking, engineering space in India. He expects oil to stay at average of USD 110-120 per barrel this year.He is bullish on the banking sector and the engineering space.

Excerpts from CNBC-TV18's exclusive interview with Mark Mathew

Q: Given the crude oil situation would India be one of your least favourite markets now in the Asian region?

A: Yes, it would be one of the least preferred markets in Asia if the oil prices stay high. We did an Oil Sensitivity Analysis two weeks ago using seven variables to measure the impact of high oil price on economies and stock markets across Asia and I am afraid that India did not square very well.

Q: Is there anything else which is worrying you about India in terms of either politics or recent policy action surrounding the crude mess that we find ourselves in, which is also sort of querying the pitch for this market?

A: Of course there are political issues and issues relating to food price inflation, but these problems don't really mean as mush as the crude oil price. The Indian market has given back almost everything from the last year or so. So it is now down to valuations, which is almost attractive for the whole market. Some large stocks in India are extremely well placed. So from a bottom up point of view I would be very comfortable with a few Indian stocks here.

Q: So aside from the under performance of the market as a whole, you are saying that you would want to start increasing allocation to a couple of specific sectors or stories?

A: Yes that is correct, particularly