SHOWS: HONG KONG, CHINA (FEBURARY 13, 2014) (REUTERS - ACCESS ALL)

ANDREW FRERIS, INDEPENDENT STRATEGIST

1. (QUESTION GRAPHIC)

'What do you make of the price actions in global stock markets so far in 2014?'

2. ANDREW FRERIS SAYING:

'Well, let's start with three very basic points. Okay, yes we have the tapering issues, which are affecting primarily the United States. We'll come back to in a minute why I don't think tapering has little or no impact - direct impact - on emerging markets. The second point is that the emerging markets have overall performed, particularly in Asia, much better than the G3 equity markets. So really as far as I am concerned, and that's my second point, this is not an emerging market issue. It is primarily a developed market issue because number one: we have tapering in the United States. Number two: we have the fear of deflation in European Union. And number three: the big question mark, the big doubt over the success of Abenomics in Japan and this is the reason why at its lowest, the Nikkei was down seventeen percent in the last month and a half or so. So I am really not particularly concerned about the emerging markets, but I am concerned about the developed markets. They are contaging us and not the other way around. And as for the crash on emerging market currencies, I do beg your pardon; we had a major crash in the hryvnia in the Ukraine, in the lira, the in rand, but good old rupee managed to stave alive and managed to be flat at about sixty two. The rupiah Indonesian was amazingly stable and the Thai baht in the middle of major political disturbances, would you believe it, is on a mildly appreciating trend. Trend, I am not saying on a day-to-day basis. So I am sorry, include me out when you are saying that emerging market crashes, not in Asia. '

3. (QUESTION GRAPHIC)

'Should investors start approaching emerging markets differently now?'

4. ANDREW FRERIS SAYING:

'Well let's put it again in perspective. China has had the best economy in Asia, possibly in the world for the last five years and the worst equity market. I'll repeat that - worst equity market. So there's nothing new. And there are very good reasons why the Chinese market is likely to stay in the doldrums til March when the National People's Congress is going to reaccelerate their reform procedure. I am very bullish on China long-term. Medium-term, I am staying very cautious to negative. Now good old India, yeah, I mean it carries on receiving blow after blow. Today we had the issues about telecommunication companies, who had the issues about, again, the Indian, sorry, the Delhi government going back into a subsidized mood form. We have elections coming, the outcome of which is likely to be uncertain. And the rupee is just staying there. I must admit, in terms of valuation and in terms of expectation, I am not happy with what I see in India. I really much prefer to see what happens after the election, rather than saying 'well, we are out in the clear.' Because the RBI may very well increase interest rates again given that their outlook for inflation remains very strong with a very big nine in front of it. And remember we are looking down in and out in a band around the six. So we have three hundred basis points to come down.'