Brexit gives investors a chance to play the markets: JPMorgan

As long as global economy is on track, he does not see any reason for emerging markets to not perform well.Below is the verbatim transcript of James Glassman's interview with Sonia Shenoy & Anuj Singhal on CNBC-TV18.Sonia: The global markets have sold off for the second straight day post the Brexit. Do you see more pain coming?A: It is short-lived because the truth is this event probably is not changing the outlook that much for the global economy; for Britain maybe, more so than for Europe. However, the truth is the market is overreacting and these things present opportunities and if anything, it may very well be that the message of this event is that the leaders need to work harder to try to get their economies moving and we would be having this resolve. Yet the European economy, British economies were doing so much better, so at the end of the day this is probably a good thing for the global prospects even though in the short run there is a lot of volatility, investors are nervous, there is an unchartered territory, we do not know where this is going. It is going to take several years but the truth Britain is not going to cut-off its relationship with Europe. It is going to have to renegotiate trade agreement. So it's not like it dies; it disappears Anuj: The counter argument to that is that right now things could be getting eerily similar to the first phase of the subprime crisis that we had and everyone just ignored that and moved on and after that we saw the kind of market mayhem. The first signs of that are visible in the way European banks reacted for the last two-three days, we have European banks falling 20-50 percent. So that part of the market is getting very nervous. A: Yes, but the big difference with the financial crisis in US was real estate assets were a way overvalued because what has happened in the real estate market and that was something that had to be corrected. This is a shock to the system because we do not know where this is going to go but it's not a permanent shock to the system. So I do not think there is any similarity with the financial crisis in the US. Quite a market froze. I think we are very impressed that the flows are moving, people are able to do what they want to do and the market is adjusting to the new reality. It is not like the market is freezing because the problem in 2008 was market all over the world froze and it took a lot of work to try to reopen it.Sonia: Since you are in the camp that believes that this is a great buying opportunity in equities. What are you preferred markets now to invest into?A: I think short-term you got to be cautious and the folks who have the risk appetite who will see opportunities but we have been here many times before; in August last year, early this year and its always a market that hits the most, emerging markets which turnout to be recovered the quickest. The US stock market is still highly valued even though it has come off by a percent or so. The US stock market is highly valued, so there is not enormous opportunity there. I think it is more the market that has been touched by this event.Anuj: For global asset managers there are other assets to invest, for example gold and some of the other relative safe haven. Do you think during this period of uncertainty the emerging markets will have to go through the pain of foreign fund outflow?A: I don't see why unless the European region slows down. I really think the big challenge for the emerging markets in the last several years was when the European economy stalled; there was a huge problem for India, for many major markets. So as long as the global economy continues on track, which we think it still happens. I do not think that this event has the potential to do as much damage to emerging markets as what we saw back down.Gold, I am not so sure and frankly gold only make sense as a short-term trade to me.