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Jul 27, 2012, 08.34 AM IST
Herald van der Linde, Head of Equity Strategy at Asia-Pacific, HSBC said the European banking union will be a step in the right direction for the markets. However, the earnings season in the west is likely to be a mixed bag and it could have a significant impact on the European market.
Herald van der Linde, Head of Equity Strategy at Asia-Pacific, HSBC said the European banking union will be a step in the right direction as it will help to unify key sectors in Europe. However, the earnings season in the west is likely to be a mixed bag and it could have a significant impact on the European market.
In an interview with CNBC-TV18, Linde said the Chinese economy is likely to stabilise in the near future. He is also hopeful of seeing more foreign flows into Asia in the second half of 2012. According to him, the Chinese markets appear more attractive than India at the moment.
Here is the edited transcript of the interview on CNBC-TV18.
Q: What have you made of both these, clutching at straws kind of hopes that maybe the ESM will be treated as a bank and therefore allowed greater leverage? Will that hope not be enough to keep the market agog?
A: I think for the moment maybe it gives the market a bit of a string of hope to hold on to. In the longer run, this question will not go away. Europe needs to decide if it wants to stick together, create a fiscal union which includes for example central and fiscal taxation or not. Any other questions and other issues we deal with in the meantime are temporary issues.
So the bigger questions still need to be answered. What is maybe somewhat incrementally positive to this is that every time we do see proposals coming forward, it does look as if Europe aims to intricate further. This banking license would give a bit more freedom to banks to extend that money.
It would basically unify some of the key sectors in Europe. In that sense, it would be a step forward. But unless we address the bigger issues, all kinds of medium-term issues, bringing the banking sector together, fiscal position in certain countries and all kinds of stress points will continue to prop up in Europe over the next couple of years.
Tags: Herald van der Linde, HSBC, Chinese economy, China, market, Europe, European market, Asia, foreign funds, inflow, Asia
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