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Broader picture for Asian mkts still negative: StanChart

Published on Mon, Jun 16, 2008 at 08:39 | Source : CNBC-TV18

Updated at Tue, Jun 17, 2008 at 11:17

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Lim Say Boon, Chief Investment Strategist, Chief Investment Strategist, Standard Chartered Bank

Excerpts from Reporter's Diary on CNBC-TV18 Watch the full show »

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Baring Shanghai most other Asian markets are in the green holding anywhere between half to one percent.

Lim Say Boon , Chief Investment Strategist, Group Wealth Management at Standard Chartered Bank told CNBC-TV18 that though this morning's action in Asia was positive, it was on the back of 1.5% gain on the S&P 500 in the US on Friday night. The dollar-Yen obviously helped by moving to 108 -109 but the broader picture remains fairly negative, said Boon.

He further adds that the Asian markets are looking technically vulnerable. The Sensex is holding up above 15,100, which is a key support level, let's hope that it stays, if it break it is going to be fairly nasty

Excerpts from CNBC-TV18's exclusive interview with Lim Say Boon:

Q: In a scenario like this where do you see value emerging in the entire Asian pack?

A: I really wouldn't make too much of today's action. This morning's action in Asia was obviously positive on the back of 1.5% gain on the S&P 500 in the US on Friday night. The dollar-Yen obviously helped by moving to 108 to 109 but the broader picture remains fairly negative.

Not withstanding crude oil retreating on speculation that Saudi Arabia will increase production, one has got to remember that even if the Saudi Arabians increase production by half a million barrels per day that is still only a part of global consumption. So the crude oil is likely to remain at a prohibitive level, at fairly restrictive levels in terms of the ability of the markets to absorb it.

We are still looking at a fairly bearish picture for the US markets, a possible retest of the March lows. Similarly the Asian markets are looking technically vulnerable. The Sensex is holding up above 15,100, which is a key support level, let's hope that it stays, if it break it is going to be fairly nasty.

Q: And any particular market which appeals to you probably Japan, the Bank of Japan (BOJ) has decided to keep rates steady?

A: No, not really. The Nikkei is to remain tightly correlative to the dollar-Yen, which means that the Nikkei only tends to gain, when the dollar-Yen gains. So it is highly dependent on a weak Yen, so if one is a US dollar invested it doesn't make a lot of sense and the Nikkei remains highly dependent on a weak Yen, which is not a good way to be.