Sit on cash in these bear market rallies: Julius Baer

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Most of the stocks in Asian markets have climbed after a rebound in metal prices boosted raw material suppliers and transportation companies.

Nimeesha Takalkar of Equity Research, Asia at Julius Baer believes what we are seeing in Asia are bear market rallies and these are opportunities for exit and profit taking. She told CNBC-TV18 that the current strategy for investors would be to sit on cash.

Excerpts from CNBC-TV18's exclusive interview with Nimeesha Takalkar: 

Q: Your take on the Asian markets any particular sector you would be focusing on and would you even touch Japan right now considering all the bad cues you are getting from that market?

A: These seem to be a bear market rallies and these offers more opportunities for exit and profit taking in our opinion. With respect to individual market, one could select a few sectors and focus on those even within Japan but right now the overall economy is only offering more bad news from time to time.

Sector specific as we have seen over the last few days' oil and gas and the financials seem to have moved in an opposite direction and that speaks for the volatility in the market and the downward pressure that we are facing. Oil and gas even within India below USD 90/bbl everything seems to be only causing more inflation scare and we don't think that kind of a level will be sustainable in the near future, which means the overall equity market in India should correct further as consensus earnings growth for FY09 begins to correct down, we know today there are 12 to 14% and everybody expects them to even halve over the next three quarters.

Some would say this is almost all in the price but we shouldn't forget that though price multiples have come off 25% over from their peaks, all ratios in the market are trading above their long historically averages, so we could be set for further corrections. The market would remain volatile in our opinion and these are bear market rallies.

Q: What is the strategy you are giving to you clients?

A: Sit on cash.