Girish Pai negative on real estate space

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

Girish Pai of Centrum Broking is negative on real estate space.

Pai told CNBC-TV18, "From a portfolio construction standpoint I would be fairly defensive at this stage. I would be in large caps; I would be in liquid names and high quality names. Our view as far as sectors that one should be overweight and underweight on continues to remain the same. What we had for the last many months now, we are overweight on consumer, healthcare, utilities, oil PSUs because we think the industrial commodity complex could see a fairly steep correction in the kind of scenario that we are building and therefore crude oil price should come down and that should benefit Oil PSU companies."

He further added, "These are the sectors that we are looking to be overweight on. Some of these sectors have out performed on YTD basis and are probably looking rich from a PE multiple perspective; both from FY11-FY12 perspective. But I would think on the way down they would be far more resilient is the view we have."

"We are underweight on metals, it has under performed but we think there could be further underperformance going from here because the price contraction one might see on some of these industrial commodities could be far more than what the market is currently anticipating. We are negative on cement that is more a domestic story, more to do with demand supply situation, which is not so positive right now and in fact demand has surprised on the negative side last quarter."

"We are negative on real estate. We are negative on capital goods and infrastructure largely from a valuation standpoint. We think a lot of positives in terms of strong order inflow are already priced in. So these are the sectors that we would be cautious on. The sectors that we are bullish on are the ones which are defensive in nature. We are neutral on banks and RIL at this point."