From the side-lines of 20th Annual Asian Investment Conference, Helman Sitohang, CEO-Asia Pacific at Credit Suisse talks about the geopolitical risks and how the markets are coping with the uncertainty post events like Brexit and Trump's election.
Investors are getting used to the new populist approach in the politics and are adjusting to it. They will start focusing more on the value than the politics, he said.
Speaking about India, he said, "India for us has been an important country, I am a big believer in the country, it is one of the largest and fastest growth globally and definitely in Asia. We have seen it growing faster than China".
"I am very happy with the progress that we have made in India, we are committed to the market", he further added. He sees a lot of big opportunities in India.
He believes consistency in policies, having a balanced agenda and sustainable growth are important things for any government and India is on the right path.
The kind of growth that we see in India isn't easy to generate. "We are very excited", he mentioned.
Below is the verbatim transcript of the interview.
Q: How markets are coping with the uncertainty post events like Brexit and Trump's election?
A: With all these uncertainties one by one being out and investors are getting used to populist kind of approach in the politics. I think everybody is adjusting to it and then will eventually start focusing more on the value instead of politics but it is going to be part of game going forward.
Q: Every year India has got a fair share of presence as far as the Asia conference is concerned and even this year, I believe, there are more than 20 odd corporate which are attending, a lot of the investors are looking at meeting Indian companies at the conference this year as well. At Credit Suisse, where India stands out in terms of ranking and personally for you, how has been India in the last one year as far as businesses are concerned?
A: India for us has always been an important country. I am a big believer in the country. It has one of the largest and fastest growths globally and definitely in Asia. We have seen it growing faster than China, which hasn't happened in a while. The potential is immense; it's the second largest country in the world in terms of population. We are very active there. Last year we had in the securities and equity securities franchise as well as our investment banking, advising clients and with Credit Suisse positioning as entrepreneur bank and given that 50 percent of listed corporate in India are first family generation owned. It bodes well to our strategy because our strategy is to cover holistically our clients not from the investment banking but also from wealth management and we are very special in that. So I am very happy with the progress that we have made in India. We are committed to the market and I am a big believer that there is a lot of big opportunities, you have a lot of global reaching companies, they are Indian owned and that is great.
Q: We are in the middle of Modi government. What have you made of this new government and what do you expect over the next two years from this government?
A: I do expect the same thing that they expect from pretty much every government. We do see consistencies in policy is always important, having a balanced agenda in terms of balancing growth but also making it more sustainable growth that not only benefit the small group of entrepreneurs or politicians or whatever you call but it is kind of broad based and I do think India is on the right path and we are excited and that is why you see the growth that you see. It is not easy to generate that kind of growth that you have seen in India given the global constellation.
Q: One thing which a lot of the clients are going to ask you as well and your India team - the one big bold move which the Modi government took last November was a demonetisation of higher currencies. Your experience on how things pan out if such a big event happens and was it a right move and will it not hurt the so-called growth in the near term? What is your sense?
A: I wouldn't comment on specific policies. The most important part is that we see the activity is back, so every time you have a new policy then there is always some short-term effect but most important thing is it is looking at long-term effect like you said the M&A activity is high, we see a lot of transactions, which means that policy is behind us and now we can look into the future. I think there is a great opportunity in the market. We are excited about the entrepreneurs and overall market activity.
Q: To your mind what are the key risks for global and emerging market equities in 2017?
A: The geopolitical risk is always going to be there. We have seen the new form of populist approach in the politics. As long as it remains in a good check and balance then it's potentially healthy. It is a new paradigm and it is voicing the voice of general population. The key is making sure that it doesn't create larger shocks which could disturb the overall trade activity, economic activity and capital market activity and as long as it in the right balance then I do think that it will continue to advance maybe in a different form and we are in the new beginning era of that kind of theme of our Credit Suisse Asia Conference and I think we should be fine.
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