Strong earnings expectations, economic growth prospects and manageable current accounts make Nomura bullish on India, South Korea and Taiwan stocks ahead of the much expected hike in interest rates by the U.S. Federal Reserve. Here are 6 key points of the report:
1. Consensus expectations are for Fed to lift interest rates in September, while Nomura expects it to happen it in December.
2. Michael Kurtz, global head of equity strategy, says deliberately focused on markets in the direction of commodity importers who have high concentration of listed consumers of commodities.
3. Adds India has enough buffer in context of Fed rate hike and it will be the best turnaround among emerging markets globally.
4. Says exports and operational gearing have worked in favour of South Korea and Taiwan shares.
5. Key overweights in Nomura’s Asia-Pacific ex-Japan equity allocation include higher-beta, lower-yield tech, industrials and consumer discretionary stocks.
6. Nomura Asia-Pacific Stock “focus list” includes HCL Technologies, SK Hynix and Daelim Industrial.