Mkt performance to stay positive in Jan: PN Vijay

Q: Would you buy IFCI at Rs 96?

A: Very difficult question because it came crashing down when the bids failed. But there is again talk off the bids being rejigged very quickly and brought on to the table; but not at this level because unless government goes out and says that it will give some sort of strategic management participation serious bidders won't come into this company just to be investors - unless they cross that hump, I don't see it going beyond Rs 100.

Q: How would you position yourself in this space in the run up to the Reliance Power IPO is it smacking off exuberance or do you think prices can move much higher even from here?

A: I think this is one sector where one can say with great deal of definiteness that the future is very good. There is huge investment in generation and Traditional Neighbourhood Development (TND) across all over the country and there are established players and are having a good time. The thing is that they have run up a lot; not all of them, some of them and they would consolidate briefly and I still believe that power along with capital goods would lead the race in 2008. So if one is a long-term player, don't time the market too much - go and buy good stocks.

Q: Between these three real estate stocks which one would you buy now DLF , Unitech and HDIL ?

A: It seems all the best one's are in the pack. I would more from knowledge, would go for DLF because that's the company I understand better and it's a sector where lot is happening, lot of the negativism has move away and it's a sector which is most sensitive to interest rates and if one works on the assumption that interest rates are softening in the first quarter of this year, I see a huge upside for shares like DLF. If some new entrants or some new FIIs are coming in or new mutual funds, new pension funds, new trust etc; as we expect them, the first stock they will pick up I guess is a blue-chip like DLF, so right now I'll plump for DLF.

Q: Which of the two scenarios look more likely in January to you because of generally bullish expectations do you think the market might give you a bit of a pull back and then later in the month started pre budget rally or do you see the market rallying on now before any kind of a meaningful pull back or correction works itself into the system?

A: Yes, it has happened before; we did have a bad 2004 in January in between the hedge fund crisis and then we had 2005 also; I remember in the second week of January we had a real fall. So anything can happen in January - one can't take it for granted that January will be a great month. But I think we have done so much of blood-letting in this last quarter in this market in terms of the US subprime and the effect all over, I feel this time the sentiment domestically is very warm and so I think this month, we'll just have a close start, but keep going up.

Q: Would you back small PSU banks from here, if yes which one's?

A: Absolutely. I think they are not small in the real world; they are small in the stock market. They are all excellent and my own favourite is Vijaya Bank because it's a very efficiently run bank among the PSUs. It has the best operating efficiencies and it tends to move also and it's got that nice size that its retail investors like. All of them of course move as a pack and are almost similar in balance sheet.  But Vijaya Bank is my current favourite among the smaller PSUs.

Q: Would you buy any of these hotel stocks right now they seem to be seeing lot of interest, the delivery volumes are very high on some of these stocks anything that you like?

A: I wish I had bought some of them a few days ago; they are so underweight in hotels. I think this goes for every fund manager - we have just removed hotels from our scheme of things and in the beginning of the bull market, the hotels were leading - so probably 2008 could be the year for hotels. They have underperformed so much, the only thing against the hotels is the strong rupee. But now they have all moved to quoting in rupee. So it is very difficult for the capacities to come up and the Commonwealth Games are coming on. So I think if one went into hotels, it will be great and of course the leader is Indian Hotels - so generally when one is moving into a sector, buy the leader first.

Q: There has been a fair amount of talk about public sector banks - what about private sector we have seen some good moves in stock like Centurion Bank of Punjab ; anything you would pick up there?

A: Those belong to a different breed because they have an aggressive asset policy and are technology driven. So the current surge in banks is purely driven by hopes of lower interest rates. So that may not effect these people so much because the balance sheet size is also not big. So Centurion of course is an interesting play because of the corporate work that they keep doing. But apart from that in the next three months if one wants to be overweight in banks, one should plump for the PSU banks.

Q: Stock from your backyard what's going on in Noida Toll Bridge?

A: There is lot happening there they have opened up the Mayur Vihar leg of it which means that their revenues are going to go up from the same bridge substantially. But what's driving the stock is the perception that the land around Noida Toll Bridge would be given to them for development and that is right in the South Delhi area. There is lot of land and if that happens, the share can really take off.

Q: Would you buy ITC above Rs 225?

A: Well, ITC is a blue-chip and the negative was that the FMCG sector is not in anybody's antenna because of the very flat margins in growth. But ITC could be differentiated because they are into hotels in a big way and their e-Choupals, which is their rural initiative, seems to be bringing them some money. So ITC may stand out and there seems to be lot of investment activity. So one cannot loose much in buying a stock like ITC. So I guess ITC could be an exception and one could buy that.