Guy Strapp, Head Of Investment Management, Prudential Asset Management said that the Fed move has re-inflated the markets. He added that liquidity will continue to be strong in the near future.
According to Strapp, India is stacking favorably among its Asian peers. He added that Asia is largely insulated from the sub prime issue. Strapp said that Asia has strong company balance sheets and economic growth. He added that Japanese investors looking offshore more aggressively attracted by yield. Strapp said that they are looking for opportunity in emerging parts of Asia.
Strapp said the the US markets are anticipating further Fed action of at least another 50 bps cut over the next 6-9 months. He added that the September non-farm payroll data was very important for the Fed decision in October.
“Asia is likely to be insulated from a US slowdown,” Strapp said adding that they have seen significant decoupling in Asian financial markets from the US slowdown. He added that liquidity flow and strong fundamentals in Asia are likely to attract flows. According to him, Hong Kong will benefit as a surrogate to China. Strapp said that they like Indonesia as a long term EM, Thailand on valuations and Taiwan on medium to long term.
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