Major central banks to cut rates in next 6 mths: Baring AMCPublished on Fri, Oct 03, 2008 at 11:17 | Source : CNBC-TV18 Updated at Tue, Oct 21, 2008 at 15:50
He expects the bailout package to go through, however he does not see the bailout package solving all the problems. Do said that he sees mild redemption activity at Baring. He expect the ECB, US Fed, BoE, RBI and Chinese Central Bank to cut rates significantly in the next six months.
Here is a verbatim transcript of the exclusive interview with Kheim Do on CNBC-TV18. Also see the accompanying video. Q: What do you expect Asian equities to do if this bailout package goes through? A: We think this bailout package will go through and that it will help to some extent, but it won't solve all the problems because obviously it has a lot to do with the housing sector in the Q: What kind of pressures are you still seeing in terms of redemptions from your investors in the West and the Far-Eastern markets? Do they continue to pull money out of Asian emerging markets? A: The data that was released by a number of houses suggests that there has been about USD 60 billion worth redemptions from all investment management houses the world over. As far as Barings is concerned, we are seeing a little bit of redemption activity but not much and we hope that this trend continues. Our funds have been in existence for a long time and we have some very loyal investors who believe in the growth of Q: It's been a tough year for Asia though and some of the bigger markets like A: We think that Q: There were concerns that there was forced liquidation for many funds and they had to actually shut down. Is that something that you are hearing of occurring; is it Asia-specific or BRIC-specific funds? A: In the long-only mutual-fund area, unless a fund manager runs a small-cap portfolio that is difficult to liquidate, they may have issues in terms of meeting those redemptions. As far as our funds are concerned, we have been investing in very liquid large- and mid-cap type of companies. Also, the liquidity problem rests more with the credit side or with portfolios that have a lot of those either unlisted types of business assets or smallcaps. Those are not what we have in our own portfolios. Q: We are nine months into the bear market. How much longer do you see this market across the world or in Asian equities lasting? A: The central banks and governments have started to show a lot of concern about the slowdown in economies and that is a good sign because the leading indicators have already started to deteriorate since last year. In addition to the falling leading economic indicators, we also have the banking problem in the This kind of volatile environment is perhaps likely to last for at least another three-six months and there could still be a bit more downside in some markets. But if we see Asian markets falling by another 10% from these levels, it would present a fabulous bargain for long-term investors.
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