The US Economy has taken a downturn…there are several views as when the US markets will reach the actual bottom. My prediction is..Capital markets in US will see multiple signals of bottom. I guess the 1st phase is already over, and the bottom was when, Bear Stearns crashed…the bank had liquidity crunch. I believe the next bottom will come by Q2 2008, when most of the big Financial giants will file their final foreclosures.
Asian markets were also hit by the US slowdown, to a big extend because of the inter-linking with the US. For example – Indian Capital markets where the US investors have 23% stake, India’s export has 16% US stake. Therefore, a slowdown in the US will definitely slowdown Indian growth story.
I believe, Indian markets are still over-valued when compared to its Asian peers, so a downside of 5-6% could be a good buying opportunity. There are big financial institutions in the US which are sitting on huge ARM portfolios, and a further slowdown, will show more defaults in coming months.
Bottom line – One has to be very cautious while investing in Capital markets – especially an emerging market like India.
Vivek Misra
[...] Writers-Block-Unblocked.com â?? Need Free Unique Content? Blocked by Writers Block? Let Our Fr… wrote an interesting post today onHere’s a quick excerptThe US Economy has taken a downturn…there are several views as when the US markets will reach the actual bottom. My prediction is..Capital markets in US will see multiple signals of bottom. I guess the 1st phase is already over, and the bottom was when, Bear Stearns crashed…the bank had liquidity crunch. I believe the next bottom will come by Q2 2008, when most of the big Financial giants will file their final foreclosures. [...]
I guess it has already affected the South Asian emerging markets, If you see Hang Seng, Shanghai, Kospi, BSE (Indian), all major indices are down by atleast 15-18% from their recent highs in november – december. I dont track Capital markets for south asia, but I am sure, Serivce Industry, IT Industry will be affected more (on negative side), if dollar is quoted weaker compared to major Asian currencies (Yen, Rupee).
I’m in Egypt and I have been affected by the slow down of the american economy
every one have been affected all over the world