Prefer APAC and India for investing: Marcella Chow, JPMorgan AMC

In a chat with ET Now, Marcella Chow, Vice President, Global Market Strategist, JPMorgan Asset Management, says , sees India as one of the few emerging economies that have actually gone through a sort of macro adjustment and is actually on the path to recovery. Edited excerpts



ET Now: It seems like a nice, smart global rally is in place but what are you making of equity inflows right now considering there seems to be quite a bit of dichotomy between how the US bond yields are shaping up and what is happening in the currency market. There also seems to be a bit of rush towards safe haven assets like gold.

Marcella Chow: Yesterday we saw the US equity market rallying once again and overall the risk appetite has improved quite rapidly after the post Brexit fears. I guess this might continue until maybe next week because people are still awaiting for potential stimulus or easing from central banks. For example, people will be watching the ECB meeting tonight and also next week, there is the Bank of Japan meeting and also the FOMC meetings. So these will be the key watch points going forward.

ET Now: The market seems to be shrugging off any kind of potential concerns from the problems in Italy or what has happened in Turkey as well. I think the Turkish lira has collapsed after the three-month emergency was declared. No repercussions you think?

Marcella Chow: Right now, there is still an uncertainty to the market and an uncertainty might arise towards the year end during the period of US elections. Also the Italian Bank crisis continues and that worries people and investors.. So these might still be the uncertainties and that is why we still prefer Asia-Pacific because of more resilient fundamentals.

ET Now: Tell us what is it that you are witnessing in terms of equity inflows and what really is happening within the emerging market pack as well as the developed markets? What sort of moves are you seeing when it comes to fund flows?

Marcella Chow: We see actually some decent fund flows into the Indian market and because of better than expected monsoon and also improving growth prospects, we see India as one of the few emerging economies that have actually gone through a sort of macro adjustment and is actually on the path to recovery.

So we believe that there will soon be more improvement in consumption, capital expenditure and also FDI. That is within emerging markets, we see that India has the potential and we also like ASEAN countries because they are more dependent on domestic demand that might be one of the key watching points as well.