Herald Van Der Linde, head-equity strategy, Asia Pacific, HSBC says that it is a good time to invest in global equities with a 12-month view. "After the markets rallied late 2012, the fundamentals are starting to catch up. Earnings prospects across Asia look okay but it will take time for the fundamentals to catch up," he told CNBC-TV18.
Below is the edited transcript of the analysis on CNBC-TV18
Q: What do you make of the latest developments and will the love for risk return on the investor-horizon in the near-term?
A: Over the last month, global markets have been pretty much flattish. They have been up and down on the back of a bit of risk from Europe and the US. However, the markets actually haven’t moved much higher despite the Dow reaching a high. The S&P, which is a better market indicator, is still a bit below level. So I think this flat lining in the markets will continue.
After the markets rallied late 2012, the fundamentals are starting to catch up. Earnings prospects across Asia look okay but it will take time for the fundamentals to catch up.
In addition, the markets are awaiting the end of the reporting season and maybe later in Q2 with the ingredients ready for a further rally, the markets will start to move higher.
Q: What should the investor-orientation be at this point? Is it a good time to invest in global equities or adopt a cautious stance given the sharp run?
A: I think it continues to be a good time to invest in the markets with a 12-month view. I have based my outlook on the assumption that Asian markets would be up 15-20 percent this year. Though that is yet to occur, Asian markets have rallied a couple of percentage points, maybe little bit too much in January. For the remainder of the year, I think the situation looks pretty okay.