SHOWS: HONG KONG, CHINA (DECEMBER 12, 2012) (REUTERS - ACCESS ALL)

RAHUL CHADHA, SENIOR PORTFOLIO MANAGER, MIRAE ASSET GLOBAL INVESTMENTS

1.REPORTER OFF CAMERA SAYING:

'So many risk events out there, Fed meeting, Eurozone problems festering - the economy is slighty recovering in China and in other parts of the region. How is your portfolio strategy looking as we go into 2013?'

2. RAHUL CHADHA SAYING:

'Increasingly over the last three months we've become more constructive on markets. The markets have climbed the wall of worries which were there. Thankfully we've seen policymakers take pragmatic decisions and all these tail risks, whether of Europe break-up or a hard landing until now haven't really materialized. Data is responding to all these stimulus in terms of easy liquidity and that's giving comfort to investors. So over last the 2 months we've added to our exposure in consumer discretionary financials and I must say we remain constructive of markets though not outrightly bullish.'

3.REPORTER OFF CAMERA SAYING:

'Why not outrightly bullish?'

4. RAHUL CHADHA SAYING:

'I think those structural headwinds or the structural issues still remain. We're going to see Euro zone going through its own deleveraging austerity program and that is bound to have some impact on the export growth for the region. We saw in the Chinese export data which came the day before, it was slightly subdued. So clearly, U.S. would also go through deleveraging and we're not really going to go back to strong growth rates forward. So it's going to be a model two scenario but increasingly more constructive. 2013 hopefully should be more positive vis-a-vis 2012 in terms of the growth outlook.'

5.REPORTER OFF CAMERA SAYING:

'What's the biggest risk event out there that's preventing you from being outrightly bullish?'

6. RAHUL CHADHA SAYING:

'I think clearly if you see each of these economies has their own structural adjustment which needs to be done. We talked about Euro zone where you need to go through a period of austerity. You need to get the competitiveness back. Same with the U.S. though we are seeing positive data from consumer confidence, housing stocks, but still it's got a long way to go. Coming to Asia, again, we've seen China which needs to increase the consumption as a percentage of GDP so the infra stimulus which you've seen over the years needs to be tampered down. And we'll see more incidents of that in coming years. For India, again, the challenge is to maintain the fiscal deficit, control the current account deficit, while keep growing at about 5-6%.'

7.REPORTER OFF CAMERA SAYING:

'In terms of asset allocation, is it really just equities we stick with, or do we protect ourselves by putting some in cash?'

8. RAHUL CHADHA SAYING:

'I think equities will be the preferred choice for 2013. People who have a lot worried about tail risks arising in 2012, it has not really happened. And as we go forward, one gets more comfortable with the fact that policymakers are aware of these tail risks and will do their best to avoid them. So assuming that these risks do not come in 2013, I think increasingly we'll see people moving out of cash or low-bond deals or debt to equities.'