The current rally has an implied assumption that interest rates will remain permanently negative and inflation 'pick up, but this is quite unlikely
With the mid-and small-caps outperforming the frontline indices thus far in calendar year 2017 (CY17), JIGAR SHAH, chief executive officer, Maybank Kim Eng Securities tells Puneet Wadhwa that they will now need earnings delivery to sustain at the current levels. Edited excerpts:How do you see the markets playing out over the next one year?Over the next one year, markets could be somewhat corrective and range-bound with a slight downward bias. This is due to the recent economic slowdown coupled with consistently below expectations corporate earnings. The domestic liquidity should be good unless there is an upward trend in the interest rates. Foreign liquidity, too, should be favourable and flow could be positive if there is a healthy correction from the current levels. Do you think the global equity markets are nearing a bubble given that they are rising in tandem and inflated by liquidity? Can this liquidity tap run dry soon?The United States (US), European Union (EU) and other ...