Investors should hold more cash: Karl-Thomson Securities

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There are mixed cues coming in from Asian markets. Patrick Shum, Chief Strategist at Karl-Thomson Securities says Asian markets will remain bearish. The contraction in Q2 GDP growth of Europe and Japan means risk of global recession is increasing says Shum.

He told CNBC-TV18 investors should hold more cash and do nothing at this moment.

Excerpts from CNBC-TV18's exclusive interview with Patric Shum:

Q: How are you expecting the Asian markets to pan out considering there is that inflation cue to watch out for, the dollar and of course the commodities front?
 
A: I think the strong performance of the US dollar indicates that money is returning to the US. Before the election, the money is unlikely to return back to the Asian markets. The Asian market will remain bearish. The Q2 GDP growth of the Europe and also Japan, have contracted that means the risk of global recession is increasing.

The demand for this part will decrease and it will hit the Asian economy and also I expect the down trend of the stock markets to continue.
 
Q: What is your sense behind the movement we are witnessing across Japanese markets this morning? Is it purely because they had oversold a fair bit?
 
A: Yes, I think so because the weaker yen is well supported by export. So this morning I can see that Japanese markets has come upside but the downward trend maybe later  this quarter, the market is still looking for the bottom.
 
Q: Sector specifically what is your preference retailers, commodities?
 
A: I think investors should hold more cash and do nothing at this moment.