New Delhi: If you have investments in the markets, it's time to take guard.
Ram Kolluri, President and CIO of Global Investment Management, says global capital markets are predicting an economic slowdown as global central bankers are wanting to tightly control inflation and raising interest rates.
Commenting on the Asian markets being weak and facing a decline, he said even though the global economic growth and corporate earnings have been looking very good, there has been a complete re-assessment of market valuations happening around the world.
"Without exactly calling it a recession, it is going to be an economic slowdown and, thus, lower corporate earnings," Kolluri says.
"There is a multiple contraction going on in the equity markets, thus valuations are coming down. I've a feeling that we've not completely run through this yet. Probably, we will be looking for 10-15 per cent correction from the top in the equity markets," he observes.
Commenting about the weakness in emerging markets, Kolluri says investors should wait for better buying opportunity as it is still very early.
"At the moment, if I am holding some cash, I'll wait for better buying opportunities here. We have enjoyed three years of spectacular returns in most of the EMs with all of these markets enjoying better than 40-50 per cent annualised compound returns for three years. Thus the valuations at the moment are somewhat rich and if you are an investor hold your cash and wait for better buying opportunities. This is too early," he adds.
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