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Developed markets to outperform EMs; expect decent returns from India: Standard Chartered Wealth

market | Dec 23, 2021 11:55 AM IST

Developed markets to outperform EMs; expect decent returns from India: Standard Chartered Wealth

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Steve Brice, Chief Investment Officer, Standard Chartered Wealth Management, believes that the developed markets (DMs) will outperform the emerging markets (EMs). According to Brice, both the US and European markets will outperform the rest of the markets in 2022. He is, however, expecting decent returns from the Indian market.

Steve Brice, Chief Investment Officer, Standard Chartered Wealth Management, believes that the developed markets (DMs) will outperform the emerging markets (EMs). According to Brice, both the US and European markets will outperform the rest of the markets in 2022.

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“We still believe that developed markets (DMs) will outperform emerging markets (EMs), at least going into the start of the year. So we have much greater growth transparency when it comes to the outlook at the start of the year in the US in particular. Obviously, Omicron is raising concerns in Europe, but we have got fiscal stimulus coming through and very significant monetary policy stimulus still in the works. So, overall we believe the US and Europe will continue to outperform," he said.
He believes this is a seasonally strong period for equities, even if the current inflation number is higher than what investors would like.
He is, however, expecting decent returns from the Indian market. He is convinced that the macro environment in India continues to be favourable. He mentioned that he isn’t too concerned about the valuations in India.
“We are neutral Asia and within that, we are neutral India. So we have been overweight India, pretty much the whole of 2021, until a couple of weeks ago. We have been riding that wave quite well, but we have downgraded it to neutral, but we are still expecting decent returns for the India market and we think this is going to be a cyclical play as far as the market is concerned. So the three sectors we like in particular are financials, industrials and consumer discretionary," said Brice.
"We do believe that the macro environment is still pretty favourable and so growth is going to be above trend. Yes, the RBI is likely to raise rates in the second half of next year by around 50 basis points. So, it's going to temper some expectations, but we think that's largely priced into the short end of the bond curve. So, overall, still positive returns, but not a favourite market now within Asia,” he said.
For the full interview, watch the accompanying video.
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