Emerging markets are expected to outperform developed markets over the next 12 months, said Herald Van Der Linde, Head - Asia Equity Strategy, HSBC.
Herald likes India structurally. According to him, the valuation of the Indian market has gone up due to major inflow from retail investors.
“India see some nice numbers coming through tax collection, etc., it’s a little bit better and that gives you a little bit of confidence, particularly, on the domestic side,” he said.
Herald says China is seeing some stimulus working its way into the economy.
“China looks better. People are significantly underweight, they cannot sell that much further. Valuations are rather low, big property stocks are trading at four times earnings and there is some stimulus coming through, confidence is coming back a little bit, sentiment seems to be turning. I think that means that China looks a little bit better over the next 6-12 months or so,” he said.
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On the US, he said high-interest rates will mean a stronger dollar. “In the near term, higher interest rates in the US will probably need a bit of a stronger dollar. So we need to deal with that, but the thing is for emerging markets, although we have a kind of a mixed background, macro, things are shaping up a little bit better across the region,” Herald said.