India our APAC priority and primary market focus'

With markets looking forward to a rate cut by the US Federal Reserve (Fed) this week, BHASKAR LAXMINARAYAN, chief investment officer and head investment management Asia at Julius Baer, shares with Puneet Wadhwa that a 25-basis- point (bp) cut paired with a strong dovish message could be just as effective as a 50-bp cut with minimal commentary. The impact, he observes, will largely depend on the accompanying message and how it is interpreted. Edited excerpts:

Where does India rank on your priority list within the Asia-Pacific (APAC) region? What are your views on Japan and China?

India is our priority in the APAC region, particularly from an equity perspective. It's the primary market we focus on. China is often easier for business operations but more challenging for equity returns.

Japan, on the other hand, is an intriguing market with both positive and negative aspects. It remains at the forefront of technology and business scalability, and recent regulatory changes are encouraging companies to streamline their balance sheets. This, combined with Japan's currently undervalued market, offers the potential for upside. Therefore, Japan is also a preferred market for us, alongside India, in the APAC region.

Aren't valuations a concern regarding Indian equity markets?

Due to regulatory constraints, Indian equity investors have traditionally been more domestically focused. This contrasts with other markets like Malaysia, Singapore, Hong Kong, and Thailand, where investors have long had the freedom to move capital internationally, leading to greater portfolio diversification.