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May 16, 2018 12:45 PM | Bonds

Fundamentals of market not looking good especially on macro front, says CLSA

Fundamentals of the market are not looking, especially on the macro side, said Mahesh Nandurkar, India Strategist, CLSA.

"The fundamentals of the market are not looking that great especially on the macro side whether it is the bond yields, inflation outlook, currency outlook etc. So macro front is much weaker today as compared to what it was 12 or 8 months ago,” Nandurkar said.

He said he is willing to take some money off the table as micros have not improve.

Talking about global markets, he said, "The coordinated global growth is playing out in the US. We have seen that happening to a certain extent in Europe as well. With the coordinated global growth improving, possible money supply will reduce a bit as well."

“As we have seen the US treasury yields are now little bit higher than three percent mark and if they move up further from hereon, obviously, the attractiveness of the other emerging market assets like the Indian currency etc. will reduce,” he said.

Nandurkar said the global growth might be improving but we need to be aware of the possible side effects as well, that the global liquidity conditions, the money flow will not remain as attractive as it has been over the last three-four years.

According to him, FY19 equity supply pipeline looking as big as FY18.

"We also need to figure out if there is any headwind coming either by way of the long-term capital gains taxes, which has already started to play out, is there some money moving into physical assets because there are some anecdotal evidence that the property markets are showing signs of bottoming out," he added.
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