In an interview with ET Now, Adrian Mowat, the Chief EM & Asian Equity Strategist at JPMorgan, shared his views on emerging markets and investing in India as well as the growing Iraq crisis. In the beginning of the interview, Mowat commented:
Iraq is probably exaggerated in its importance. The areas of the current unrest are not major oil producing areas. So the real impact on the flow of oil is going to prove to be quite modest and I am sure that is why the oil prices move to slightly higher range, but the move looks modest.
Mowat later talked about how global funds are underweight in emerging markets and retail investors had (until recently) been redeeming both ETFs as well as actively-managed mutual funds, but are now slowly returning to open-ended products while the global asset allocates are starting to look at EM once again. However, he then gave this note of caution regarding emerging market fund flow data:
I would also caution people unless India gets a disproportion amount of the flow, remember that there are only a few markets where you get high frequency exchange data on inflows. So those would be places like India, Taiwan, Korea.
We do not get this information for the Hong Kong, China market, we do not get for any of the ASEAN markets and so when I look at that statistic, it is normally misrepresenting what is going on.
Mowat spent the rest of the interview talking about investment opportunities in India, saying:
My bias would probably be to underweight exporters as they are more defensive and be overweight domestic cyclicals. But when I look at this from the perspective of a global investor, I am very bullish on the US economy, which is the key market for the Indian IT companies.
To read the whole article, Global funds still remain underweight on emerging markets: Adrian Mowat, JPMorgan, go to the website of the Economic Times.
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