By: FP Staff
Source: http://www.firstpost.com
Category: Investment In India
Noted economist and managing director of Asianomics, Jim Walker said on Tuesday that he expects India’s growth to slow down further. However, he is positive on India as an investment destination.
Admitting that the fundamentals haven’t changed much since 2011, he said the short-term negative outlook is a result of bad earnings, increase in risky assets, depressed sentiment, European recession, and disappointing reform measures by the government.”I am afraid we will get the mother of all recessions in Europe” said Jim Walker, in an exclusive interview to CNBC TV-18.
With the Eurozone debt crisis continuing to drive global markets, Walker said that 2012 would be a worse year for equities as compared to 2011.
According to him, many investors seemed to be focusing on liquidity numbers and have ignored real economy numbers like the seven percent fall in industrial production in Spain, falling retail sales in Germany and the rising unemployment in peripheral countries.
He was skeptic on the recent liquidity injection that the European markets have seen and believes that the European markets are unlikely to hold given the recessionary trend. The recent rally that the European markets have seen is because of the injection of new liquidity. However, this does not solve the problem.
“All we have done in the course of this liquidity rally is given European banks money at 1 percent and those banks are running to buy European government paper at 3-4 percent. So they haven’t recycled any of it into the private economy…real economy, part of the economy that actually grows and makes money”, he said.
Overall, his message was clear. “It’s a very simple source of shorting, which is, short the European market, short the euro, short European equities in particular. If you want to be long it should be on Indian equities and long US equities. That’s the bet to be putting on just now because at the moment people are far too optimistic about Europe”.
Noting that domestic equity and currency markets were oversold in a big way last year, Walker said for foreign inflows to keep coming, the domestic stock market will have to keep rising. “I predict range-bound stock markets with a buy for the Sensex around 16,000 even as 19,000 looks stretched at this moment,” Walker said.
He added that there is a lot of private sector investment waiting to be channelised into the public sector if the government maintains fiscal prudence and brings fiscal deficit down to 4 percent and showcases a roadmap for the direct tax code and improves the corporate tax structure.He also called for increased government spending on infrastructure to give a fillip to the economy.
On China, he said, “No one knows the real China story but it seems to be bad.”
Source: http://www.firstpost.com/investing/india-slow-on-growth-but-a-safe-investment-destination-jim-walker-213236.html
Source: http://www.firstpost.com
Category: Investment In India
Noted economist and managing director of Asianomics, Jim Walker said on Tuesday that he expects India’s growth to slow down further. However, he is positive on India as an investment destination.
Admitting that the fundamentals haven’t changed much since 2011, he said the short-term negative outlook is a result of bad earnings, increase in risky assets, depressed sentiment, European recession, and disappointing reform measures by the government.”I am afraid we will get the mother of all recessions in Europe” said Jim Walker, in an exclusive interview to CNBC TV-18.
With the Eurozone debt crisis continuing to drive global markets, Walker said that 2012 would be a worse year for equities as compared to 2011.
According to him, many investors seemed to be focusing on liquidity numbers and have ignored real economy numbers like the seven percent fall in industrial production in Spain, falling retail sales in Germany and the rising unemployment in peripheral countries.
He was skeptic on the recent liquidity injection that the European markets have seen and believes that the European markets are unlikely to hold given the recessionary trend. The recent rally that the European markets have seen is because of the injection of new liquidity. However, this does not solve the problem.
“All we have done in the course of this liquidity rally is given European banks money at 1 percent and those banks are running to buy European government paper at 3-4 percent. So they haven’t recycled any of it into the private economy…real economy, part of the economy that actually grows and makes money”, he said.
Overall, his message was clear. “It’s a very simple source of shorting, which is, short the European market, short the euro, short European equities in particular. If you want to be long it should be on Indian equities and long US equities. That’s the bet to be putting on just now because at the moment people are far too optimistic about Europe”.
Noting that domestic equity and currency markets were oversold in a big way last year, Walker said for foreign inflows to keep coming, the domestic stock market will have to keep rising. “I predict range-bound stock markets with a buy for the Sensex around 16,000 even as 19,000 looks stretched at this moment,” Walker said.
He added that there is a lot of private sector investment waiting to be channelised into the public sector if the government maintains fiscal prudence and brings fiscal deficit down to 4 percent and showcases a roadmap for the direct tax code and improves the corporate tax structure.He also called for increased government spending on infrastructure to give a fillip to the economy.
On China, he said, “No one knows the real China story but it seems to be bad.”
Source: http://www.firstpost.com/investing/india-slow-on-growth-but-a-safe-investment-destination-jim-walker-213236.html
No comments:
Post a Comment