Jim McCafferty, joint-head of Asia Pacific equity research at Nomura, is advising investors to exit US equities and enter Japan and China. Here's the edited excerpt of his interview with CNBC-TV18.
“I saw some very good results from Walmart which is a real bellwether for the US economy, it signals consumer confidence and at the same time in our markets, in China, Alibaba which is a huge constituent of Morgan Stanley Capital International (MSCI) China had strong results,” McCafferty said on Friday.
On the India markets, McCafferty said, “We feel India is quite expensive because of hefty earnings downgrades for India. I think analysts in India are optimistic of earnings growth prospects, results come through and also posted downgrades forecast.”
“Therefore, India yes, the growth story long-term, as in 5-year story but right now there are much cheaper markets in the region especially Japan,” he said.
About the US markets, he said, “We right now feel that that market has had a very strong run; strongest performer of the developed markets in the first half of the year. We would advise investors to exit the US equities and invest their money into Asian equities especially Japan and China because that’s where we think the real value is right now.”
"We believe Japanese and Chinese companies have strong balance sheets," said McCafferty.