Inflation the center of Asian mkt concern: Daiwa Institute

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Asian markets were trading firm. China's Shanghai Composite slipped 0.16% or 4.44 points at 2,699.09. Japan's Nikkei was down 0.31% or 40.87 points at 13,224.53. Taiwan's Taiwan Weighted lost 0.46% or 33.81 points at 7,360.29. South Korea's Seoul Composite fell 1.25% or 20.07 points at 1,586.47.

Hirokazu Yuihama, Asian Regional Strategist of Daiwa Institute of Research told CNBC-TV18 that the concern for Asian markets is centered around inflation risk and interest rate hikes going forward.

 

"I currently like Hong Kong and Korea. In Hong Kong, there is high exposure to Chinese market which is benefiting from the high growth," said Yuihama.

  

Excerpts from CNBC-TV18's exclusive interview with Hirokazu Yuihama:

 

Q: Your reading of the Asian markets today, where they headed considering not too good news has come from the US and also from the ECB rate hike?

 

A: The market's concern is centered on the inflation risk going forward and the succeeding interest rate hikes going forward. But the Indices are much too pessimistic about this, although we can't deny the interest rate hikes in Asia too, like Korea and Taiwan. But towards the rest of the year because of the basic fact, inflation growth rate, the rate of increase will gradually moderate that is what I am forecasting now.

 

So if you look at the structural changes in global economy growth, Asia is now in the center and leading the global economy growth but sooner or later the global Indices would start to appreciate the solid fundamentals of Asia.

 

Q: Which markets or which countries do you have the maximum exposure in at this point in time?

 

A: I currently like Hong Kong and Korea. In Hong Kong, there is high exposure to Chinese market which is benefiting from the high growth. Many tourists are coming to Hong Kong and that is pushing up the private consumption. The real interest rate is also negative in Hong Kong.