Market to stabilise on easing food inflation: Bowen Cap

In an exclusive interview with CNBC-TV18's Latha Venkatesh and Anuj Singhal, Aadil Ebrahim of Bowen Capital says he expects the markets to stabilise, "and we will see some positive inflationary numbers from the food front".

Below is a verbatim transcript of the interview. Also watch the accompanying video. Q: Last time, you were speaking about how you are seeing fund pull out and the relative attraction of developed markets. You think this theme is going to play out now for a little more and how much longer before US stocks start looking priced? A: I am selling off and catching up with the declines that we are seeing in the South Asian economies and also, here in India. The ETFs, the hot money flows that came in last year, are the first to go out, since, they are seeing better growth elsewhere. The investors are seeing higher inflationary issues, interest rate tightening and corporate governance issues and scandals. So, the money is flowing out as they read such news. The long term sticky money, however, has not shown any evidence of heading out, yet and that is very positive and seems very unlikely. So, probably, for the next couple of months, the consensus says that the first six months developed markets will outperform, and the later six months, the developing markets would outperform. We are, probably, sticking to sort of that story line so far. Q: By the time we end this year, do you see a probability that emerging markets, including India, would be heading into a bear market, and at the same time the developed markets led by US, maybe even Japan, actually having a bull market? A: India is already in a bear market. From the peak to trough, in dollar terms, we are already 20% off, so, we are already in a bear market, while the US, European and Japanese markets are doing absolutely fine. In India, the major issues are inflationary scare and corporate governance. The inflationary scare is driven by food inflation and it is already rolled over. In next couple of months, food inflation rolls over this market will stabilize and we will see some positive inflationary numbers from the food front. Oil will play spoil sport, however, that is world over. The domestic corporate governance issues are scary. Everyday, you are seeing new scandals emerging and that is not great. You need a couple of weeks of just no new news flow coming in, you don