By Yoon Ja-young
Staff Reporter
The Indian Stock Exchange looks a good choice as Indian stocks are likely to post an impressive rebound once global stock markets recover from the U.S. subprime mortgage shock, Samsung Securities said.
It expected global liquidity to head toward countries not directly damaged by the global credit crunch or the ones with rising momentum and strong demand and supply within.
``Newly developed countries in Asia, Korea, Taiwan and Hong Kong, are promising, but the rebound of India is also highly likely,'' said Lee Seok-jin, an analyst at Samsung Securities.
He chose India as the top pick among BRICs countries. Brazil depends too much on the U.S. economy, and the Russian bourse is hampered by falling earnings growth rate caused by rising cost in energy production. The Chinese bourse, which has recorded remarkable growth, seems to have enough momentum to rise for the short term despite overheated situation. As it broke the 5,000 points mark, however, technical correction seems imminent, and liquidity could dwindle once the Chinese government induces expansion to overseas investment. The rising trend seems to be getting hard to go on considering the high evaluation, regardless of the economic fundamentals, Lee said.
The Indian bourse, meanwhile, plunged during the U.S. subprime mortgage shock, which means a rebound is likely.
Among developed countries, Lee selected Japan. The Japanese bourse is likely to be weak in the short term due to global credit crunch and strengthening yen, but the corporate earnings would sustain it when considering the rosy outlook on its economic growth for next year. The return of Japanese investors to the domestic market from yen-carry trade in emerging markets will make the Tokyo bourse rally in the long term, Lee said.