Favour high-beta Asian currencies, bullish on EMs: SocGen

Benoit Anne of Societe Generale (SocGen) explains, on CNBC-TV18, that he favours high-beta Asian currencies in an attempt to cash-in on the rebound in economic growth and healthy risk appetite. Overall, Anne is also bullish on emerging markets for the beginning of 2013.

Below is an edited transcript of the analysis on CNBC-TV18 Q: Did the bond markets of Spain and Italy show some positives after Greece got this minor uptick from rating agencies?
A: The overall environment is indeed quite positive. I don't think the Greece grade per se was a key market driver. It may be a positive signal but nothing of substantial impact, in my view.
Importantly, investors are getting more comfortable about the fiscal cliff issue and recognise that the euro-zone crisis is being taken care of, compliments of the ECB's hard work. Let's not forget that this is really the end of the year and price action might be misleading as liquidity is starting to be a bit weaker. So, the signals are a bit more difficult to decipher, I must say. Q: You are an emerging markets expert. What is your sense of flows particularly for the next year? For 2013, which markets would you prefer given the current move we already had? In that, where does India stand?
A: I like Asian currencies in the context of growth perhaps stabilising or even showing some momentum in that part of the world. I am going to favour high-beta currencies in Asia. I would include the Indian rupee (INR) in that basket. It's a buying level for medium-term investors who want to capture the rebound in economic growth and healthy risk appetite. So, I like Asian currencies.
I like Europe, the Middle East and Africa (EMEA) fixed income because essentially we still have no growth in Europe and easing by central banks. I am going to be bullish on emerging markets overall for the beginning of the year. Q: What would be your top three or four asset classes in the first quarter?
A: On the currency front, I am going to favour a long position on the INR, the ruble in EMEA and continue being long on the Mexican peso in the first quarter. Then after the first quarter, I would like to move away from currencies and into fixed income as a more defensive play. Q: Wouldn't any of the commodities be an area of choice at all? There have seen some decent rallies in some metals and some steep falls in gold incidentally.
A: As an emerging market (EM) strategist I keep an eye on commodities. I don’t have any particular direct strategic view but it would make sense that the commodity sector would be well-supported.