Ceiling for Event Driven Market: Mehta

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May 6 (Bloomberg) -- Johnny Mehta, Chief Investment Officer at Axis Investment Management, discusses events driving markets and his subsequent investing strategy. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

A lot of them pointing to foreign exchange swings.

What is the one thing that is worrying you the most?

I think the only thing that generally worries us is that we tend to only see amplitude on equities in individual names on an event spaces, whether there is an announcement of activity or and earnings surprise or disappointment.

Moving to a general trend seems to be very event driven.

I'm worried to the extent it may be misleading as to how far equities can go at this point.

You would actually evaluate them to the lower side?

We have quite a good run on earnings, almost ahead of ourselves.

If you look at some lenders, they squeezed margins are down.

The area of danger is where you have the share price activity outstrip earnings expansion.

He had a lot of shares that run up well ahead of any hope or expectation of the earnings.

That disparity is where the vulnerability is.

Those areas are expanding more and more.

You're only getting a little bit of equity uplift on those special circumstances as opposed to more broadly.

As a sense of an equity market that is reaching full valuation, priced to perfection.

We would expect likely to increase and equities to be very selective in where the money flows.

We continue to believe the money coming out of the momentum areas will continue.

That is not a surprise to us.

We think that there are sectors of the market that remain good value that remain unloved and undervalued.

In those areas come i think the money flow will be more positive.

Which ones are they?

You think taking a cautious stance is smart.

You are still stockpicking?

Very much.

This is where i suppose tacticians have denver well.

To look forward, we still think there is value in tmt.

If its fashionable, is going to be a name we will not have.

Simple as that.

It seems that tmt is something that is been flagged.

Then we have been taken by surprise by the pharmaceutical and tech stories.

We actually sold a little bit early relative to how this merger and acquisition activity has taken shape.

We were quite surprised at how highly priced it is now.

It probably isn't our choice pick in the sector, but it seems to be the one that everyone seems to go for.

Glaxo's rate is much lower.

Maybe the drug synergy is not there.

Maybe they like astrazeneca's future in over-the-counter drugs.

We are a little surprised at how high it is gone so far.

Johnny mehta will stay with us.

The u.s. prepares criminal prosecutions for europe's banks.

It could cost credit suisse $1 billion.

Plus, swing and a miss.

Stay with us.

We are "on the move" and we are just getting started.

I am back into.

-- in two.

This text has been automatically generated. It may not be 100% accurate.


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