Why IT stocks are at all-time high despite growth concerns? Rana Gupta answers
«So, whether the fiscal incentive comes or not, that will determine quite a few things. And of course, if exports were to revive, then it can become a much better trade. But these two has not happened yet and in the absence of these two, China remains more of a tactical trade,» says Rana Gupta, Manulife Investment Management.
All of us in the last 15 days have spent a considerable time in understanding this China comeback and sell India trade. Is that a real trade? Do you think that is a multi-year trade or that trade is already over?
Rana Gupta: Well, it depends on whether the Chinese policymakers go down the path of a large fiscal stimulus or not. In our view, China was export oriented economy, which got its savings and invested in real estate.
The challenges were too much reliance on exports, which is right now getting a bit more problematic and excess savings. Now, export part, which is dependent on international trade, it will take time to repair.
But the excess savings will continue. So, someone needs to dissave. So, whether the fiscal incentive comes or not, that will determine quite a few things. And of course, if exports were to revive, then it can become a much better trade. But these two has not happened yet and in the absence of these two, China remains more of a tactical trade.
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