Bowen Capital's top sector/stock bets for 2010

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In an interview with CNBC-TV18, Aadil Ebrahim, Investment Manager, Bowen Capital Management Limited, spoke about his reading of the market and his outlook.

Below is a verbatim transcript of the interview. Also watch the video.

Q: How are you looking at markets panning out in 2010 now that perhaps a strong technical barrier appears to be breaching?

A: Towards the end of 2009, my soft target was about 5,000 on the Nifty, which was priced in the earnings growth because I still don't see the exuberance returning in terms of what we saw in 2006 and 2007. I have no reason to change my target. Towards probably by end of the summer I would like to see 5,000 target before I start getting more excited and deploy in more cash because right now some of the valuations are stretched.

We aren't that excited-rates are negative now with inflation picking up and you don't want to be sort of investing with very negative real rates. We need to see some sort of moderation on that front. So we want to see the Reserve Bank of India (RBI) continue to raise rates to get some liquidity off the table where it gives us the comfort level that we are entering at a decent point.

Q: So you would reckon that you can get much more attractive levels to enter your chosen stocks-what kind of downsides are you looking at?

A: For example like Infosys, we took some money off the table, took half our position-post results, falls back to our Rs 2,400-2,500 level - we may look to get back in-nothing too ridiculous but maybe 15% decline. We think a lot of these companies are now trading at 52-week highs, they have surpassed their 2007 peak and that is obviously a bit of a scary thought when the global economy hasn't turned around as rapidly, especially a stock like Infosys.

So I think now we are just being prudent by taking some money off the table and hopefully there is a correction post their results we can get back in.

Q: It is interesting you say that you have trimmed your holding in Infosys because one of your funds, the Arrow Fund is now going to become a completely China home grown company's focused fund I understand from your website. Have you already sold off the non-Chinese stocks in that portfolio?

A: That is correct. That fund doesn't hold any Indian investment and this fund is being converted to a Chinese consumer fund.