SHOWS: HONG KONG, CHINA (JANUARY 4, 2012) (REUTERS - ACCESS ALL)

AJAY ARGAL, HEAD OF INDIAN EQUITIES, BARING ASSET MANAGEMENT

1. REPORTER OFF CAMERA SAYING:

'Amid current global economic landscape, how does India's economy fare among other Asian peers in the coming year? What's your 2013 outlook?'

2. AJAY ARGAL SAYING:

'Yeah. India's economy actually, as we're all familiar, has slowed down, but most of the other world economies have also slowed down. So it appears that the economy is in the process of bottoming out. And it is widely expected that next year, that is the next fiscal year in India which ends in March, the growth is going to be slightly better compared to this year. So basically this year would be the trough so there is some pickup in activity expected and some of it is visible in the industrial production which came as the last reading. And at the same time, there is expectations of more easing in terms of interest rates cuts which has not happened so far in the case of India because of the inflation which is slightly easing off now. So all is said and done, there is pickup of growth slightly which should help the markets in general.'

3. REPORTER OFF CAMERA SAYING:

'How much upside would you give Indian equities from the 6000 mark?'

4. AJAY ARGAL SAYING:

'Yeah, so it is not only important to look at the broad indices as we have been maintaining for some time, India remains at the moment a very stock-specific market. And the reason being that in spite of the slowdown in economy last year, we have seen that the stock markets did very well. So the valuations are not cheap though they are not terribly expensive either. So which means that on an aggregate index-wide basis, maybe the returns are not going to be stupendous, but there would always be stocks within the aggregates which are going to do very well, which is what we witnessed even in calendar 2012. And we expect the same to repeat this year if we are able to get the right stock calls, you can get good returns.'

5. REPORTER OFF CAMERA SAYING:

'Can Indian equities build on 2012 gains or will it be a year of consolidation?'

6. AJAY ARGAL SAYING:

'Yeah so if you look at the broad indices, it could be a year of consolidation. But as I mentioned, individual stocks will still give you returns which are going to be much higher than the index returns. So it depends on your individual stock pickings and obviously depends on the investment horizon. If your investment horizon is too short, then that might not be as consolidation but the structural drivers in India remain which is the un-population and under-penetration of any consumer items and under-leverage in the financial sector. So all those long-term structural drivers are in place and because of that, we feel that the growth story in India is going to continue for a very long time.'