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The world should move away from equities to bonds, says Credit Suisse's Tantia

At this point of time, one really can't fight this tsunami of interest rate hike and tightening policy that are being seen across the board, he said.

September 23, 2022 / 02:36 PM IST

Investors should be investing in bonds instead of equities given the surge in interest rates worldwide, said Suresh Tantia, a senior investment strategist at Credit Suisse.

"I think the world should move away from equities to bonds because now bonds are looking much more attractive," he told CNBC TV18 in an interview. "Even within the Indian equity market, I think bonds are yielding better compared to the equity valuation."

Commenting on India, Tantia said Indian bonds are yielding better compared to the equity markets. He also expects (FII) outflows from India, especially as investors are now getting worried about weakening of the Indian currency; and the widening interest rate differential between India and US could put further pressure on the rupee.

Earlier today, the Indian currency slipped below the 81-mark against the US dollar for the first time in early trade, weighed down by the strong greenback and risk-off sentiment among investors.

"Investors are worried about the currency risk...so that's why I think it would be difficult to continue to attract inflows into the emerging markets, it's most likely that you will see further outflows from emerging markets," he explained.

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In today' s session, Indian benchmark equity indices lost over 1 percent intraday, as the market participants worried that aggressive rate hike by the US Federal Reserve and slowing Chinese economy could weigh on global economic growth.

ALSO READ: Market falls for third straight session: Key factors behind the selloff

"At this point of time, you really can't fight this tsunami of interest rate hike and tightening policy that we are seeing across the board," Tantia explained.

Tantia also expects sectors such as technology and commodity to come under pressure as the global slowdown continues.

"So one can I think, readjust your portfolio within the local equity market, but from an asset allocation perspective, certainly more allocation to bonds right now, compared to equities," he added.
Moneycontrol News
first published: Sep 23, 2022 02:36 pm
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