We are specialists in emerging market space and we move quite independently of what the short-term flows. Even as the near term trend remained difficult to call, the fund was positive on both emerging markets and India. We think the fundamentals in the emerging markets remain attractive for the long-term. I think timing is a difficult one here, the challenge posed by headwinds for the uncertainty coming from the macroeconomic or the policy driven space remains one that is more difficult to predict and that is the thing that makes it difficult to call.
However, from our perspective, we remain long on emerging markets. If you compare our fund weight against the benchmark, you will find that we are overweight within the emerging market space and within the Asian space as well. So yes, we are firm believers, firm backers in the emerging market story and that includes India of course.
If you have a five year view or eight-ten year view, we know that even existing levels of capacity whether that is in cement or autos is not quite adequate but it is difficult to call when a recovery would come through. We have quite a bit of cement stocks like UltraTech, Grasim, Ambuja Cements in our portfolio. What we try and do is we do not predict exactly when the cycle would recover and how it would stretch out but we try and look at companies that have got good assets, good locations and a network of good distribution that will be efficient & can adequately meet the customers need on a cost effective basis and these.However, whether cement recovers in next week or six months is extremely difficult to call.
I am sure there are many data points that the Governor is referring to that I am not privy to. We do put in a lot weight into what they guide but having said that it is extremely difficult to call a trend with such mixed environment now and we will wait and watch. There are some data points of recovery that indicate that perhaps now we are closer to a recovery than we would be able to say two or three quarters back.
We tend to be conservative on our numbers in the cement space. We are looking at single digit growth levels for our companies but when things fall in place, pricing movements can swing quite hard. So although we expect some volume stabilization and growth, it is the price strengthening that will be able to surprise us on the upside whether that is two quarter phenomenon or three quarters of phenomenon or further out, is difficult to say. We have seen price strengthening in the northern parts of the country over the last quarter but that is not necessarily driven by fundamentals, so we need to look at complete supply and demand picture and get clarity on that front before we can call a sustained recovery for this coming cycle.