Valuations taken backseat in Indian mkts: Citigroup

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS India remains favourite mkt in long-term: Fullermoney What to buy and what to sell today? ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Hans Goetti, Director of Citigroup Private Bank believes that valuations have taken a backseat in Indian markets for now. Goetti informs that Citigroup is slightly underweight on India, Hong Kong, Singapore, Malaysia and Korea.

Goetti further adds that they would go overweight on Asia if commodity prices fall. He also says that Citigroup likes IT, capital goods, media and telecom stocks In India. He is looking at 22% earnings growth for FY07.

Excerpts from CNBC-TV18's exclusive interview with Hans Goetti:

Q: Markets are at an all-time high in India, what is your sense now on this market?

A: It looks very strong. The Indian market is obviously supported by very strong fundamentals. We are looking at 8.3% GDP growth for this fiscal year, 22% earnings growth for this year and long-term earnings growth rate of about 15%. So at the moment, valuations are taking a backseat. Growth momentum is clearly center stage and on top of it, oil prices, which help, of course.

Q: Given these kind of economic and corporate numbers, do you sense any kind of ownership scramble now, of people who might have been waiting for a dip in India, which has not come through?

A: Well, the foreign inflows have remained quite steady in India. If one looks across Asia, India and China have been the biggest beneficiaries of foreign inflows. I think in India, where the free flows of total market capitalization is relatively low, if there is a lot of foreign buying, it pushes up valuation. As I said, it is more a growth momentum story, than anything else.

Q: What is your call on India as a market - are you overweight or neutral?

A: In a portfolio context, we are not overweight on India. We are basically slightly underweight even at these levels. In Asia, we are underweight in Hong Kong, Singapore, Malaysia and Korea for various reasons. For us, India remains a domestic story, whereas some other stories maybe export-oriented. But we find certain sectors in India attractive and that's where we put our money.

Contd on pg 2...