Greece, Germany want to preserve euro, EMU: Crossbridge

Singh: What I would say is what we are seeing now, of course nobody expects a smooth deal, because remember this is a political negotiation. It is less business and economic and more political negotiation. What we really have to remember is that it is not just about Greece, it is also about the whole economic monetary, European Monetary Union (EMU) because Greece really, Germany really wants to preserve the Euro and preserve the EMU because they are the biggest beneficiaries. This just reminds me what happened to Bretton Woods. One country leaves, it just falls apart. So, we have to understand that Germany is willing to keep the EMU together and for that it is a small concession to make. Now, if you look at the Greek angle, the deal that they offered, the last one, they have made a lot of concessions, they have crossed the red line which they said they would never cross.

So, of course, you have to remember, you have to sell this deal to your parliament and to your people. So, you are going to see a lot of negotiation back forth going on. But, I am very confident that there will be a deal and for that we have to listen to the key player. If you see what international Monetary Fund (IMF), there was a report this morning that IMF privately agrees that the Greek proposal is good enough to do a deal on. So, what we are seeing is more negotiations and noise but we have to look at the leaders in terms of Merkel, Tsipras and IMF and of course European Central Bank. ECB continues to extend the emergency liquidity (EL) continues to keep the Greek banks solvent and these are important things to clarify.

Anuj: So, you believe this is more of a speed breaker than a deal breaker and secondly, would you say in that case, these kind of knee jerks would be good buying opportunities?

Singh: I absolutely believe so and I am just talking about the global market and not particularly Indian market because if the deal were to happen and if it were to happen, is it will be a big boost to the confidence in the emerging market and we have also seen that the euros on data actually is improving. Because if you look at the bank lending server which ECB publishes every quarter, there is an improvement from the ground level in terms of credit availability and how the Euro Zone economy is doing, especially Spain and other economies. It will have a positive impact. If you look at US, the fact that we are talking about there is going to be a US rate rise, it is in response to a growth story in US. So, you see the macro picture looks very positive.

With respect to India as I have mentioned before as well, you need a catalyst to drive the Nifty market higher and that catalyst for local markets has to come from India in terms of not just intention but in terms of what quality initiative and extra work that the government is going to do. And we have got a lot of news today from the Finance Minister, but we need the catalyst to come from India because a lot of goodwill, I would not say a lot of goodwill has eroded but a lot of goodwill is being questioned that how much you can put your valuation on that.

Latha: What have you made of the Greek deal falling apart? Is it just an excuse to buy a speed breaker or do you think that we are going to see a long lean patch?

Ziglio: It was kind of expected in the sense that if you look closely at what the creditors, but also the IMF is looking quite critical about the measure that the Greek government had proposed on Monday. There was a lot of scepticism about what these measure were actually going to be. Whether this measure was going to be accepted from the creditors and since from the beginning, they always talked about being an initial step and encouraging step and not sufficient from the creditors stand point. Although it has to be said that the Greeks have done large amount of distance, covered a large amount of distance from where they were coming initially and towards the requirements of the creditors.

Clearly the problem here is that it is difficult to ask the Greeks to do more than effectively on the table at the moment, there is only 7.2 billion of which 6.6 billion will be used to payout the ECB. So, it is not going to be even enough to repay the IMF. So, the amount of money that is on the table for the Greeks, if you exclude the possibility of the structuring or the relief, then there is basically no inducement for the Greeks to accept the deal or to commit more.