Unhedged Portion of ECBs: One More Threat to Corporate Borrowers?

Deputy Chief Economist

Sharmila Whelan

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Macroeconomics

<p>The prospects of an outright recession are very real. Mr Modi’s 21-day lockdown was ill-conceived and has left India’s already enfeebled economy in shambles. We suspect that consumers and businesses will be paying the costs of Mr Modi’s knee-jerk reaction to the coronavirus, even in 2021. We have been underweight Indian equities since 2019. We see no reason to change that call. Our advice to investors - any temporary stock market rally is an opportunity to get out.</p>

The prospects of an outright recession are very real. Mr Modi’s 21-day lockdown was ill-conceived and has left India’s already enfeebled economy in shambles. We suspect that consumers and businesses will be paying the costs of Mr Modi’s knee-jerk reaction to the coronavirus, even in 2021. We have been underweight Indian equities since 2019. We see no reason to change that call. Our advice to investors - any temporary stock market rally is an opportunity to get out.

MSCI AC Asia ex Japan Index (MXASJ INDEX)

DSP BlackRock Liquidity Fund (DSLQYDG IN)

India & Covid-19 – Modi’s Knee Jerk Reaction Costs the Poor and Businesses