The fourth quarter of 2013 will probably see a recurrence in the pattern that was witnessed in the second half of 2012, with stocks and high-yield bonds in Europe and Emerging Markets surging, as the FED refuses to implement its own scheme of tapering its Quantitative Easing policies this year, said Arjuna Mahendran, the new Chief Investment Officer of Emirates NBD Wealth Management.
Mahendran was speaking at a special dinner hosted by Emirates NBD Wealth Management for its Non Resident clients from the sub-continent. The event, which was recently held at Al Mas Conference Centre, Al Mas Towers, JLT, Dubai, also witnessed presentations by Dubai Gold and Commodities Exchange (DGCX) and Abdulla Hosani, General Manager, Emirates NBD Securities on how Emirates NBD can facilitate trading on the DGCX.
Delivering the keynote address on: “Is the US Economy De-Coupling from Emerging Markets: Implications for Investors,” Mahendran outlined his views on a range of investment issues and trends.
“The long-anticipated rebound in US corporate capex spending could be delayed till 2014. This will keep US stock and bond markets range-bound and we would buy the markets on dips in anticipation of a resumption of ‘normality’ late in 2013/ early 2014,” he added.
Mahendran also discussed his views on recent trends within US economic management and performance in relation to their impact on the outlook for Emerging Markets. This is a topical theme given the recent upgrade by Morgan Stanley Capital International (MSCI) of the UAE’s capital markets to emerging status.
Underlining, that global institutional fund managers will selectively buy back into ‘cheaper’ European and EM stock and bond markets, Mahendran said, “We have already seen most of these markets recover up to 75% of their summer 2013 losses. Investors who wish to continue the ‘rebound trade’ are advised to be very selective in doing so.”
He said investors should use any dips in the global markets, consequent to the failure of the US Congress to raise the US Treasury’s borrowing limit, to buy into strong businesses paying high dividends and good yields, as well as government and quasi-government debt in USD.
Rajesh Khanna, Managing Director and Head of Non-Resident Sub-continent Businesses, Emirates NBD, said, “Non Resident clients from the sub-continent form a significant proportion of Emirates NBD’s overall client base and are an important audience for our views on investment trends and themes. This forum will also provide our key personnel with an opportunity to hear the audience’s views and concerns regarding investment.”
Tuesday, October 29- 2013 @ 13:06 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.