Emerging Markets Look Very, Very Cheap: Nakisa

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Oct. 21 (Bloomberg) -- Ramin Nakisa of UBS Investment Bank offers his investment strategy on the United States and emerging markets and explains why he is bullish on European banks. He speaks on Bloomberg Television’s “On The Move.”

Have american markets run ahead of themselves?

You look at the united states at the moment.

They are looking top-heavy at the moment.

We just started going over weight on the yen.

We still think that there are structural problems.

The yen has started to turn the corner.

Are you cherry picking?

Are you going with a little basket?

It is a massive dispersion with a em.

You look at the northern european countries and they arm or structurally positive.

The southern countries have more of a debt problem.

The credit bubbles are going to pop.

Where is it going to come first?

Bucks i will tell you where it happens rather than when you're in when it will be when the europe start -- the euro starts to taper.

The debt bubble starts to slowly deflate.

You are calling a january taper.

The size of that taper?

We think it will start with treasuries.

You do not want it to hit the housing market.

It will probably be very small.

She has been vice-chairman for over two years.

The policies will be very similar.

Does taper predicate everything?

Is that the top of the agenda?

Timing, impact?

We saw u.s. equities trop by 15%. is that the dominant issue on the agenda?

We look at the economic surprises.

The developing market is starting to underperform in terms of economic surprises.

That is what made us stand up and take notice about what was going on in em and developing markets.

Em looks very, very, very cheap.

Particularly in some regions.

Russia looks very cheap.

And you buy the basket in russia or do you look for individual names in russia?

Individual names.

The price is around 100. we look at places like technology sectors in korea, which is looking a list.

That is a beautiful play on the global recovery.

People love to buy these phones.

Flavor some of the names in your basket.

Are you prepared to go there yet though the obvious one would be samsung.

Of course.

Talk to me about banking.

We talked about the u.s. tanking.

-- banking.

You have 30% exposure to europe.

You quite like the european banks.

This is quite a bullish core.

It takes three boxes.

It is very cheap.

It is almost impossible to buy europe without buying banks.

It has the mystic recovery, so it is exposed within europe.

It has exposure to the recovery.

Typically in europe, you do not borrow from the credit markets.

You borrow from banks.

That will be a big part of the recovery story in europe.

Not all banks are created equal.

Bbva are your two cores.

That's italian and spanish.

Bad loans are raging ahead in spain.

There are big questions about capitalization in italy.

Why so firm on those two?

You look at the chart on that . it is way beyond where the crash was in 1992. it started to slow down.

We started to see unemployment turnaround in spain.

We saw a large number of structural reforms.

Overall, europe is painting a much more rosy picture.

You have this double discount for things like banks in europe.

Europe has sold off.

We have this double discount, which is very attractive.

Our institutions wanting to add european exposure?

Do you feel that momentum in the market?

We have questions about double discount stocks.

We have this basket that you can buy.

We had a lot of requests about that recently here in that is not just tanks.

What else is in their?

Deutsche has a very high exposure to the domestic story.

The supermarket stores.

These are the kinds of things that we could consider.

You have a very bullish call on china.

What is the call?

Their policy is very simple.

They have lower growth that you can sustain.

You could see the print come out at 7.8%. he reports that they are talking about are very positive.

Things like supporting the train industry.

You have to build tracks for the trains.

D regulating the telecom industry, which would make a lot of sense.

This could be changed.

That is moving along at a pace.

Higher she goes?

That is the forecast.

The interesting thing, if you look at the flows, this is moving up the table in terms of flow.

It is moving the on some of the developed countries.

When there will -- will there be reserve currencies?

Rate to be the with you this

This text has been automatically generated. It may not be 100% accurate.


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