Nick Ferres, investment director from Prudential asset management is underweight on emerging markets and India in particular. But in the medium term, he feels that they are very much positive on the Indian growth story. It is just a valuation contention at the moment.
He is of the opinion that India is trading at about 2.5-2.7 times book value, which is very strong on equity or profitability. But when that is seen in the context of global markets (for example German Dax) then Germany looks more attractive from a relative strength point. More price correction is likely to happen ahead.
He further added that for sometime they felt that Europe has a genuine problem which posses a serious threat to both global stability and growth. He considers it as a serious issue.
He is optimistic that European central bank can solve all the global crisis. He quoted that a couple of weeks ago the German constitutional court effectively ruled out a permanent solution such as a euro bond or European stability mechanism. It is under the ECB which can short circuit the problem in the near term. But that might not be a solution for the long term solvency problem of some European countries.
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