Hong Kongs Northern Pegasus Favors Indian Stocks.

Online, February 22, 2010 (Newswire.com) - Sources close to Northern Pegasus revealed some time ago that the firms fund managers were apparently taking advantage of a dip in the market to beef up their portfolios with what the firm's analysts perceive as undervalued stock.
Subsequently, the firm announced in a weekly briefing to clients, that as investors continued to shun emerging-market assets on concern that borrowers in Europe and the Middle East will default on their debt, Northern Pegasus' short-term strategy would be to capitalise on falling prices in a market their analysts have since affirmed is fundamentally sound and to some extent, falling prey to what are being termed the 'debt vigilante' syndrome currently hitting the indices of many emerging economies.
Possibly due to elements critical of the strategy, Northern Pegasus hit on the subject again last week, once again, in their weekly briefing to clients. A senior regional analyst from Northern Pegasus made reference to previous comments, and stated that "Despite the unsettling nature of a downward trajectory, the value is nonetheless borne out in the fundamentals. The underlying parameters of India's economy are still very strong. Their vast domestic market means that they are not dependant on exports."
Asia's third-largest economy may grow 8 percent in the year starting April 1, said Chakravarthy Rangarajan, chairman of the Prime Minister's Economic Advisory Council said on Feb. 9. Gross domestic product will probably expand 7.2 percent in the year ending March 31 from a year earlier, the Central Statistical Organisation said on Feb. 8.
Hinting as to a longer term strategy, the Northern Pegasus analsysts concluded their note with reference to Indian corporate bonds. In the coming fiscal year, Northern Pegasus foresee that bond yields may again rise to attractive levels (in which they previously capitalised through aggressive purchasing of corporate debt when India's overnight money rate rocketed to 19.5 percent in October 2008. Northern Pegasus predict that the benchmark 10-year bond yield may rise as high as 8.40 percent, the most since October 2008, from 7.86 percent now, due to concern over debt sales and inflation.
"We feel the rate of interest will rise in the next three to six months and that will be good for us to invest in bonds next year," a Northern Pegasus spokesperson said.