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

Q: We have a good rally in these last few weeks, 35% from the lows – do you see it progressing further?

A: It has been quite a satisfying few weeks both for the world markets as well as for India and to an extent that was to be expected given the very sharp fall last year and on to the first couple of months of this year. One had a situation where the MSCI World Index actually had hit its 2003 lows. So there was every possibility that there would be bounce from that level. The fall was very sharp and even a bear market rally can be quite substantial given the quantum of the fall because nothing actually keeps going down all the way to zero. Right now we are in a situation where all data whether it is economic data or other data is getting filtered through that positive lens. In India the IIP is in negative territory but there are a few green shoots in cement, so you look at the glass which may not even be one third full as more than half full.

At some point again you will wake up and discover that a negative IIP is not such a good thing that in case of the world economy that massive leverage on the balance sheet or the labour market decline is not going away in a hurry. All of us would be very happy if in a one-year situation there is a reversal in economic growth as well as in the market but for a recession of this kind that’s probably being a bit over optimistic and in any kind of recession there are always false dawns. In markets, there are false downs and typically the first rally is not the place where you should get in. You have to wait till probably the next dip and reconsider at that point. That’s really our take at this point in time.

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