Worry over poor liquidity a negative for EM bonds: Kotak Life

Asian shares slipped on Friday and the dollar nursed losses in a week marked by growing uncertainty about the outcome of the US presidential election.In conversation with CNBC-TV18, Hemant Kanawala, Head-Equity, Kotak Life Insurance discusses the fundamentals of the market.He said in February this year, there was some change in flows from developing markets to emerging markets on the back of recovery expectations in emerging markets. Going forward, emerging markets are expected to grow at a faster pace compared to developed markets. He further said the worry is that easy liquidity in the developed markets is coming to an end. This is negative for emerging market bonds and may also impact Indian bond market. Giving a positive outlook, Kanawala said overall it will benefit equities because an upgrade on the global growth estimates will be seen.Further, Kanawala talks about impact of GST tax rates on auto-mobile companies. He says from near-term point of view, the GST tax rates will be negative but eventually growth will come back with the demand in the auto-mobile sector.Watch video for more............