UBS’s head of global macro strategy Bhanu Baweja is unwilling to change his underweight stance on Indian equities after the announcements made by finance minister Nirmala Sitharaman on Friday to withdraw the surcharge on FPIs and taking steps to boost liquidity in the system. In an interview with Sanam Mirchandani, London-based Baweja said fixed income is a better asset class in India than equities from a three-to-six month perspective. Edited excerpts: What is your reading of the underperformance of Indian markets vis-a-vis EMs this year? In addition to the weakness of global trade, weakness of global investment, uncompetitive currency, India now has this additional problem that consumption growth is not picking up aggressively because the savings rate has fallen. This decline in savings isn’t because people are aggressively buying real estate or other durables amidst higher incomes. It is because income generation and job generation itself has been weak. Market correction may have coincided with the budget, but the fundamentals have been poor for some time. Medium-term earnings expectations remain high despite weakening rural incomes. Valuations are still quite high, and that’s why within the global EM context we are actually underweight Indian equities and overweight Indian bonds. Fixed income… Read full this story
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In the short term, fixed income will score over equities in India: Bhanu Baweja, UBS have 289 words, post on economictimes.indiatimes.com at August 26, 2019. This is cached page on Asean Breaking News. If you want remove this page, please contact us.