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We see global markets falling quite a bit more and it's just getting warmed up, says Shankar Sharma, vice-chairman and joint managing director, First Global. India will perform well only after the dust settles, he says in an interview with Samie Modak. Edited excerpts:
How serious are the worries surrounding China and global slowdown? The China problem was highlighted by us back in 2012-13 itself, in a report and article published in Business Standard. We had pointed out that China was a highly indebted country, and it was on an unsustainable path. That thesis has played out perfectly today. The China issue is a serious problem for the world because China demand drove growth for many global companies. With that growth now in question, the impact on global corporate earnings will be substantial.
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India has been one of the better performing markets since June, when the whole China trouble began. Will India continue to outperform?
India is a well-balanced market with strong exporters and consumer companies and hence, traditionally, India does well in times of Asian turmoil. That said, in the first part of a bear market, the moves are non-discriminatory and everything gets hit. Only after the dust settles, will people begin to discriminate.
Do you support the view that India is the best among the emerging markets (EMs) and will be a beneficiary of the current situation?
We are the best market in an EM crisis and this has been the case since 1997-98.
Your comments on the commodity price crash and its impact on commodity companies.
This commodity bear market was written large on the wall since 2008. I don't see any hope for commodities, given China slowdown and strong US dollar
How much worse could it get from here?
We see global markets falling quite a bit more. It's just getting warmed up.
