Concerned about liquidity in India: Morgan Stanley
23 April 2007
Malcolm Wood, Asia-Pacific Equity Strategist of Morgan Stanley says that the Asian markets are seeing domestic liquidity, after the resumption of FII interest.
He adds that higher valuation for Asia is justified since there are concerns about pace and all measures of risk appetite is quite high across Asia and they won''t need a bad news to push the Asian markets further down.
On India, Wood says that there are concerns on the liquidity and the RBI will need to tighten the rates more. He feels that the India valuations are extremely high, which is justified by strong growth.
CNBC-TV18 shares with domain-b its exclusive interview with Wood:
What
is behind this optimism in global markets, because it has turned around completely
in the last one month, US is at new highs, most Asian markets are at new highs,
what do you think has changed in the last 30 days?
From a US perspective,
there are a couple of things. One we have had better than expected CPI number
last week. A couple of weeks before that, the employment numbers were better than
expected. So some of the fears, at least in the short term, about the US have
been settled. Besides, more recently, we have had a reasonably constructive reporting
season from US companies.
What
about Asia though, because Asia has been even stronger?
Exactly. The added
feature in Asia is the liquidity that is in our markets; we are certainly seeing
lots of domestic interest in equities as well as ongoing or resumption of foreign
interest in our markets.