Financial Daily from THE HINDU group of publications
Saturday, May 27, 2006
Mr Mark Tan Keng Yew, Senior Investment Analyst at UOB Asset Management, says that it would sell more small-cap and illiquid stocks in India.
He is currently neutral on India at the moment. Yew is looking to invest reasonable amount of new money into India.
Excerpts from CNBC - TV18's exclusive interview with Mark Tan Keng Yew:
Do you think the worst is over for the emerging market space?
I think they still continue to be volatile; there is still a lot of uncertainty in the markets.
People are still weary of rising interest rates, there might still be a little bit of liquidity crunch. Certainly, stocks were oversold too soon. I think that there will be a relief rally for now.
How have you read the FII outflow that is coming for these emerging markets, do you think the worst is over?
I will not discount that the worst is over. I think that we will still continue to see some volatility out there.
This is an opportunity for long-term investors to come into the market, if there are market dips again.
Is there a lot of redemption that is happening in the emerging market funds, have you seen any of that in your funds at all?
No, we do not see much redemption in our funds. Our funds have many institutional portfolios and some funds in Singapore are relatively more resilient to such redemptions.
Tactically, what have you done in the past 10 days? Are you sitting on a greater degree of cash now, or have you begun to buy on dips?
We have been selectively positioning our portfolio, into the quality names. Out of the second liners, the quality names and second liners have been sold down together. Therefore, we have been trying to position ourselves back to the quality and we are out of the lower quality names.
Could you give us some examples, India specific, on what you might have done?
A: Being India specific, probably we would try to sell off lesser liquid, smaller cap stocks and position ourselves more in stocks in the infrastructure sector; for instance, Grasim Industries, Bharat Heavy Electricals.
Have you been net buyers in India over the last 10 days?
Not really. We have been neutral with India, following the big raid that's happened recently.
So our view is still same. It is just that we are positioning ourselves more in quality names that we like and which were oversold in the recent past couple of weeks.
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