Robert Kalin, Senior Fund Manager - equities at DWS Investments informs that observes that his company is bullish on Q3 numbers for the telecom sector and expects the technology sector to be buoyant as well.

He adds that DWS Investment has UTI and ICICI Bank in their portfolios and they prefer PSU Banks more due to their lower valuations. The company does not expect any significant global tightening of rates.He believes that the likelihood of capital flows out of EMs is more of a concern.

DWS Investments is bullish on India in the long-term and would buy more in case of a correction, adds Kalin. 

Excerpts from CNBC-TV18's exclusive interview with Robert Kalin:

Q: We scaled close to our all time highs on the Sensex, we are doing extremely well on the frontliners. Are valuations some sort of a concern for someone like you who runs a fair amount of money in emerging markets?

A: There are many concerns for a while but we still think there are some, as long as the earnings growth continues to come through very strongly like we have been getting at the Indian stocks then we can justify these valuations. So as long as earnings growth momentum stays strong there, we are okay.

Q: What sort of earnings growth are you looking at for this particular quarter as we are stepping into earnings season right now and as I understand that you are fairly bullish on telecom and IT?

A:  Yes, I think you will see very good numbers coming out of both of those sectors, telecom if the subscriber numbers or any indication, we should have a blowout quarter again.

As far as the IT, there have been a couple of the larger names mentioning they have been getting some pricing increases, volumes as we know has been very good in general. So again outside of the currency problem that might cause a little bit of a hiccup for some of the companies but in general they are usually quite good about hedging those. In general I think we will have good numbers out of the tech sector as well.

Q: I understand that you are bullish on public sector banks but the bigger growth has come from private sector banks. Will you be including them also in your portfolio?

A: We have some private sector, I own some UTI, I own some ICICI but I think the valuations aren’t something like when you start looking at HDFC Bank, it’s a very good bank, everybody knows that, four times book is four times book. So I think when you are looking at the PSU banks you get them at around books slightly a book-book, they are growing not quite as fast but they are growing probably 20-25% in earnings and maybe not the 30% HDFC is but you are not paying that huge premium. So I think you have good upside and limited downside.

Q: One of the frequently voiced complaints about the Indian market are its valuations but they have been kind of muted by the kind of liquidity flows we have seen. Do you see the Fed’s actions panning out in such a way that this liquidity could get constrained in the coming quarter?

A: So far the liquidity seems to be flashing around the globe pretty well. There are some very large deals and lot of deals pushed out the door at the end of last quarter but yet there seem to be more than adequate money there to support it. So I would think that I don’t see any global tightening, the ECB is talking about maybe pushing up interest rates a bit, one more time, maybe two more time is max, the Fed most people think is done.

I think the monetary conditions are going to be rather benign in the near term. I think the more concerning thing for emerging markets would be risk appetite and whether the money is taken out of emerging markets and brought back into more developed markets. That would be the more concerning thing, I think for emerging markets to worry about, not necessarily tightening of liquidity.

Q: You prefer the Chinese and the Taiwanese market to India. Is that the reason because valuations are expensive at this point of time or do you believe that this market needs to correct for you to increase your exposure into markets such as India?

A: We are invested in Taiwan and China more than in India mainly because that’s within our regional funds or our global emerging markets funds is because there are larger weightings within the benchmark as well.China has been our favourite market in the last quarter of the year.

Taiwan has been more of the modest overweight whereas India we have been more of the larger weight on the percentage basis. But because it’s a lower weighting within our portfolio, within the benchmark it is a smaller percentage of the overall portfolio. But in India if I do see a pullback, we are very big believers in the Indian story; we are very bullish on the country in the long term, so if we were to see a major pullback we would be adding.